Breaking News: Kimbell Royalty Partners LP Acquires $231 Million in Midland Basin Assets in Cash and Unit Deal!
Description:
Oil and natural gas royalty interests located under the prolific Mabee Ranch in the Core of the Midland Basin on over 68,000 gross acres
HIGHLIGHTS
Expected to be immediately accretive to distributable cash flow per unit, with estimated acceleration of accretion over the next 5 years. Targeted oil and natural gas mineral and royalty interests located under the prolific Mabee Ranch in the core of the Midland Basin, with approximately 875 gross producing wells on over 68,000 gross acres. World-class E&P operators, including ConocoPhillips, Diamondback Energy and ExxonMobil Anticipated 2025 average production of approximately 1,842 Boe per day (60% oil, 17% natural gas, 23% NGL), generating an estimated $30.9 million of cash flow at strip pricing as of January 3, 2025 (reflects transaction multiple of approximately 7.5x). Expected to increase daily production by approximately 8% and expected to decrease cash G&A per Boe by approximately 7%. Expected to add 1.22 net DUCs and net permitted locations (“net wells”), an approximate 16% increase in Kimbell’s current major net well line of site inventory. Following the transaction, Kimbell expects net wells needed to maintain flat production to modestly increase from 5.8 net wells to 6.5 net wells. In addition to net wells, the Seller portfolio is expected to add an estimated 6.06 net upside locations, increasing Kimbell’s major net undrilled Permian inventory by approximately 19%. Builds upon existing Permian Basin position, which remains Kimbell’s leading basin in terms of production, active rig count, DUCs, permits and undrilled inventory. Maintains conservative balance sheet metrics with expected pro forma net leverage of approximately 1.0x following transaction close.
FORT WORTH, Texas, Jan. 7, 2025 /PRNewswire/ — Kimbell Royalty Partners, LP (NYSE: KRP) (“Kimbell” or the “Company”), a leading owner of oil and gas mineral and royalty interests in approximately 17 million gross acres in 28 states, today announced that it has agreed to acquire mineral and royalty interests (the “acquired assets”) held by a private seller (“Seller”) in a cash and unit transaction valued at approximately $231 million, subject to purchase price adjustments and other customary closing adjustments (the “Acquisition”). Under the purchase agreement, Kimbell has the option to pay the consideration entirely in cash or through a combination of $207 million in cash (approximately 90% of the total consideration) and approximately 1.4 million common units of Kimbell Royalty Partners, LP, which are valued at $24 million (approximately 10% of the total consideration).
Effect on Me:
As an individual, this acquisition in the Midland Basin by Kimbell Royalty Partners LP may not have a direct impact on you. However, it could indirectly affect you through potential changes in the energy market, which may impact gasoline prices, energy investments, and overall economic conditions.
Effect on the World:
The acquisition of $231 million in Midland Basin assets by Kimbell Royalty Partners LP could have a significant impact on the world. It may contribute to the overall oil and gas production, which can influence global energy markets, geopolitical dynamics, and environmental considerations related to fossil fuel extraction.
Conclusion:
In conclusion, the acquisition of mineral and royalty interests in the Midland Basin by Kimbell Royalty Partners LP represents a significant strategic move that is expected to positively impact the company’s cash flow and production capabilities in the long run. This deal highlights the company’s commitment to growth and expansion in the energy sector, which may have broader implications for the industry and the global market.
