Kimbell Royalty Partners, LP Announces $231 Million Midland Basin Acquisition in Cash and Unit Transaction(1)
Kimbell Royalty Partners (KRP) has agreed to acquire mineral and royalty interests in the Midland Basin for approximately $231 million. The acquisition includes assets under the Mabee Ranch, spanning over 68,000 gross acres with approximately 875 gross producing wells operated by major companies including ConocoPhillips, Diamondback Energy, and ExxonMobil.
The transaction can be funded through either all cash or a combination of $207 million in cash and 1.4 million KRP common units valued at $24 million. The acquired assets are expected to produce approximately 1,842 Boe per day (60% oil, 17% natural gas, 23% NGL) in 2025, generating an estimated $30.9 million in cash flow. The deal is expected to increase daily production by 8% and decrease cash G&A per Boe by 7%.
The acquisition is expected to close in Q1 2025, with an effective date of October 1, 2024. Post-acquisition, KRP will have over 17 million gross acres, 130,000 gross wells, and 92 active rigs, representing approximately 16% of total active land rigs in the continental United States.
Kimbell Royalty Partners (KRP) ha accettato di acquisire interessi minerari e di royalties nel bacino di Midland per circa 231 milioni di dollari. L'acquisizione include beni situati presso il Mabee Ranch, che si estende su oltre 68.000 acri lordi con circa 875 pozzi produttivi operati da grandi aziende tra cui ConocoPhillips, Diamondback Energy ed ExxonMobil.
La transazione può essere finanziata tramite un pagamento interamente in contanti oppure mediante una combinazione di 207 milioni di dollari in contante e 1,4 milioni di unità comuni KRP valutate 24 milioni di dollari. Si prevede che i beni acquisiti produrranno circa 1.842 Boe al giorno (60% petrolio, 17% gas naturale, 23% NGL) nel 2025, generando un flusso di cassa stimato di 30,9 milioni di dollari. Si prevede che l'accordo aumenterà la produzione giornaliera dell'8% e ridurrà le spese generali e amministrative per Boe del 7%.
L'acquisizione dovrebbe chiudere nel primo trimestre del 2025, con una data di efficacia dal 1 ottobre 2024. Dopo l'acquisizione, KRP avrà oltre 17 milioni di acri lordi, 130.000 pozzi lordi e 92 piattaforme attive, rappresentando circa il 16% del totale delle piattaforme attive sulla terraferma negli Stati Uniti continentali.
Kimbell Royalty Partners (KRP) ha acordado adquirir intereses minerales y de regalías en la Cuenca de Midland por aproximadamente 231 millones de dólares. La adquisición incluye activos bajo el Mabee Ranch, que abarca más de 68,000 acres brutos con aproximadamente 875 pozos productores operados por grandes empresas, incluyendo ConocoPhillips, Diamondback Energy y ExxonMobil.
La transacción puede financiarse ya sea completamente en efectivo o mediante una combinación de 207 millones de dólares en efectivo y 1.4 millones de unidades comunes de KRP valoradas en 24 millones de dólares. Se espera que los activos adquiridos produzcan aproximadamente 1,842 Boe por día (60% petróleo, 17% gas natural, 23% NGL) en 2025, generando un flujo de efectivo estimado de 30.9 millones de dólares. Se espera que el acuerdo aumente la producción diaria en un 8% y reduzca los gastos generales y administrativos por Boe en un 7%.
Se espera que la adquisición se cierre en el primer trimestre de 2025, con una fecha efectiva del 1 de octubre de 2024. Tras la adquisición, KRP tendrá más de 17 millones de acres brutos, 130,000 pozos brutos y 92 plataformas activas, lo que representa aproximadamente el 16% de las plataformas activas en tierra en los Estados Unidos continentales.
킨벨 로열티 파트너스(KRP)가 Midland 분지에서 약 2억 3,100만 달러에 광물 및 로열티 이권을 인수하기로 합의했습니다. 이 인수는 ConocoPhillips, Diamondback Energy 및 ExxonMobil과 같은 주요 회사가 운영하는 약 875개의 생산 중인 우물과 함께 68,000 에이커 이상의 총 면적을 포괄하는 Mabee Ranch의 자산을 포함합니다.
거래는 전액 현금으로 또는 2억 1,700만 달러의 현금과 2400만 달러로 평가되는 140만 개의 KRP 보통 주식을 조합하여 자금을 조달할 수 있습니다. 인수한 자산은 2025년에는 약 1,842 Boe/일 (60% 원유, 17% 천연가스, 23% NGL)을 생산할 것으로 예상되며, 이는 3,090만 달러의 현금 흐름을 생성할 것입니다. 이 거래는 일일 생산량을 8% 증가시키고 Boe당 현금 G&A를 7% 감소시킬 것으로 예상됩니다.
인수는 2025년 1분기에 마감될 것으로 예상되며, 효력 발생일은 2024년 10월 1일입니다. 인수 후 KRP는 총 1,700만 에이커 이상의 부동산, 130,000개의 총 우물 및 92개의 활동 중인 굴착기를 보유하게 되어, 미국 본토에서 활동 중인 육상 굴착기의 총 16%를 차지하게 됩니다.
Kimbell Royalty Partners (KRP) a convenu d'acquérir des intérêts miniers et de redevances dans le bassin de Midland pour environ 231 millions de dollars. L'acquisition comprend des actifs situés sous le Mabee Ranch, s'étendant sur plus de 68 000 acres bruts avec environ 875 puits en production opérés par de grandes entreprises, dont ConocoPhillips, Diamondback Energy et ExxonMobil.
La transaction peut être financée soit entièrement en espèces, soit par un mélange de 207 millions de dollars en espèces et de 1,4 million d'unités ordinaires KRP évaluées à 24 millions de dollars. Les actifs acquis devraient produire environ 1 842 Boe par jour (60 % de pétrole, 17 % de gaz naturel, 23 % de NGL) en 2025, générant un flux de trésorerie estimé à 30,9 millions de dollars. On s'attend à ce que l'accord augmente la production quotidienne de 8 % et diminue les frais généraux en espèces par Boe de 7 %.
L'acquisition devrait se conclure au premier trimestre 2025, avec une date d'effet au 1er octobre 2024. Après l'acquisition, KRP possédera plus de 17 millions d'acres bruts, 130 000 puits bruts et 92 plateformes actives, représentant environ 16 % des plateformes actives terrestres aux États-Unis continentaux.
Kimbell Royalty Partners (KRP) hat zugestimmt, mineralische und Lizenzrechte im Midland-Becken für rund 231 Millionen Dollar zu erwerben. Die Übernahme umfasst Vermögenswerte der Mabee Ranch, die über 68.000 Hektar umfasst und etwa 875 fördernde Bohrlöcher umfasst, die von großen Unternehmen wie ConocoPhillips, Diamondback Energy und ExxonMobil betrieben werden.
Die Transaktion kann entweder vollständig in bar oder aus einer Kombination von 207 Millionen Dollar in bar und 1,4 Millionen KRP-Stammaktien, die auf 24 Millionen Dollar geschätzt werden, finanziert werden. Die erworbenen Vermögenswerte sollen voraussichtlich im Jahr 2025 etwa 1.842 Boe pro Tag (60 % Öl, 17 % Erdgas, 23 % NGL) produzieren und einen geschätzten Cashflow von 30,9 Millionen Dollar generieren. Es wird erwartet, dass der Deal die tägliche Produktion um 8 % erhöht und die Betriebskosten pro Boe um 7 % senkt.
Die Übernahme soll im ersten Quartal 2025 abgeschlossen sein, mit einem Stichtag vom 1. Oktober 2024. Nach der Übernahme wird KRP über 17 Millionen Hektar, 130.000 Bohrlöcher und 92 aktive Bohranlagen verfügen, was etwa 16 % der aktiven Landbohranlagen in den kontinentalen Vereinigten Staaten entspricht.
- Immediately accretive to distributable cash flow per unit
- 8% increase in daily production
- 7% decrease in cash G&A per Boe
- 16% increase in net well inventory
- Expected $30.9 million cash flow generation in 2025
- Conservative 1.0x pro forma net leverage post-transaction
- 19% increase in Permian Basin net undrilled inventory
- Significant capital outlay of $231 million
- Potential dilution if unit payment option is exercised
Insights
This
The immediate
The addition of 1.22 net DUCs and permitted locations, expanding inventory by
The Mabee Ranch acquisition significantly enhances KRP's Permian Basin footprint in premium areas of Martin and Andrews counties. The asset quality is exceptional, with up to six economic reservoirs from Middle Spraberry to Barnett, enabling multi-zone development. The 1.2% average DSU Net Revenue Interest indicates meaningful participation in future production.
The active rig count on the acreage (2 rigs) and substantial DUC inventory signal near-term production catalysts. The transaction increases KRP's exposure to the Permian Basin, its highest-performing region, while the projected
Post-closing, KRP will hold mineral interests in areas covering
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 - Expected to increase daily production by approximately
8% and expected to decrease cash G&A per Boe by approximately7% 3 - 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 close4
Kimbell estimates that, as of October 1, 2024, the acquired assets produce approximately 1,842 Boe/d (1,125 Bbl/d of oil, 410 Bbl/d of NGLs, and 1,842 Mcf/d of natural gas) (6:1).5 For the full year 2025, Kimbell estimates that the acquired assets will produce approximately 1,842 Boe/d (1,104 Bbl/d of oil, 424 Bbl/d of NGLs, and 1,881 Mcf/d of natural gas) (6:1). The acquired acreage is located under the historic Mabee Ranch in the Midland Basin, with oil and gas minerals and royalty interests concentrated in
Bob Ravnaas, Chairman and Chief Executive Officer of Kimbell's general partner, said, "the acquired assets are located on one of the largest family-owned tracts in the heart of the Midland Basin, and enhance Kimbell's Permian footprint with excellent reservoir quality, near-term cash flow and long-term production growth. Headlined by PDP production from approximately 875 gross producing wells, excellent rig activity and line of sight wells, premier E&P operators, and substantial undeveloped drilling inventory, the Acquisition is expected to be immediately accretive to distributable cash flow per unit, with accelerated accretion anticipated in future years. Thanks to the Kimbell team, and our advisors, for working diligently to consummate this mutually beneficial transaction."
Asset Highlights: Acquisition offers Kimbell unitholders world-class exposure to the Midland Basin
- Oil and gas mineral and royalty interests located under the prolific Mabee Ranch, with approximately 869 Net Royalty Acres6 spanning 68,049 gross acres
- High interest position with
1.2% average DSU Net Revenue Interest - Management estimates 11.5 MMBoe in total proved reserves, reflecting a purchase price of approximately
$20.13 - Expected to strengthen Kimbell's liquids weighting from
48% of daily production mix as of Q3 2024 to51% of combined daily production mix - Following the transaction, Kimbell expects to maintain peer-leading five-year PDP decline rate of approximately
14%
- High interest position with
- Clear line of sight on development and production growth in future years supported by 76 gross / 0.95 net DUCs, 21 gross / 0.27 net permitted locations, and compelling undrilled inventory
- Expected to increase Kimbell's total net DUC / net permitted location inventory by
16% to 9.06 net wells - Expected to increase Kimbell's Permian Basin net DUC / net permitted location inventory by
28% to 5.55 net wells - Estimated 513 gross / 6.06 net upside locations expected to increase Kimbell's total major net drilling inventory by
8% , and to increase Kimbell's major net drilling inventory in the Permian Basin by19%
- Expected to increase Kimbell's total net DUC / net permitted location inventory by
- Attractive growth profile in future years supported by superior rock quality and robust oil in place, consistent rig activity and premier E&P operators
- 875 gross producing wells operated by Tier 1 E&P operators including ConocoPhillips, Diamondback and ExxonMobil
- ConocoPhillips has continuous drilling clause ensuring development
- Top tier Midland Basin rock quality with stacked pay development in up to six economic reservoirs spanning from Middle Spraberry to Barnett
- 2 rigs actively drilling on Seller acreage as of September 30, 2024
Kimbell Continues Its Role as a Leading Consolidator in the
Assuming the Acquisition is consummated as described in this news release, Kimbell is expected to have over 17 million gross acres, over 130,000 gross wells and a total of 92 active rigs on its properties, which represents approximately
Advisors
Citigroup served as exclusive financial advisor and White & Case LLP acted as legal counsel to Kimbell. TPH&Co., the energy business of Perella Weinberg Partners, served as exclusive financial advisor and MLT Aikins LLP and Vinson & Elkins LP served as legal advisor to Seller.
About Kimbell Royalty Partners
Kimbell (NYSE: KRP) is a leading oil and gas mineral and royalty company based in
Forward-Looking Statements
This news release includes forward-looking statements. These forward-looking statements, which include statements regarding the anticipated benefits of the Acquisition, the expected timing of the closing of the Acquisition, and reserves, production and other operational data with respect to the Acquisition, involve risks and uncertainties, including risks that the anticipated benefits of the Acquisition are not realized; risks relating to Kimbell's integration of the Acquisition assets; risks relating to the possibility that the Acquisition does not close when expected or at all because any conditions to the closing are not satisfied on a timely basis or at all; and risks relating to Kimbell's business and prospects for growth and acquisitions. Except as required by law, Kimbell undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this news release. When considering these forward-looking statements, you should keep in mind the risk factors and other cautionary statements in Kimbell's filings with the Securities and Exchange Commission ("SEC"). These include risks inherent in oil and natural gas drilling and production activities, including risks with respect to low or declining prices for oil and natural gas that could result in downward revisions to the value of proved reserves or otherwise cause operators to delay or suspend planned drilling and completion operations or reduce production levels, which would adversely impact cash flow; risks relating to the impairment of oil and natural gas properties; risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in oil and natural gas prices; risks relating to Kimbell's ability to meet financial covenants under its credit agreement or its ability to obtain amendments or waivers to effect such compliance; risks relating to Kimbell's hedging activities; risks of fire, explosion, blowouts, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operations; risks relating to delays in receipt of drilling permits; risks relating to unexpected adverse developments in the status of properties; risks relating to borrowing base redeterminations by Kimbell's lenders; risks relating to the absence or delay in receipt of government approvals or third-party consents; risks relating to acquisitions, dispositions and drop downs of assets; risks relating to Kimbell's ability to realize the anticipated benefits from and to integrate acquired assets, including the assets acquired in the Acquisition; and other risks described in Kimbell's Annual Report on Form 10-K and other filings with the SEC, available at the SEC's website at www.sec.gov. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release.
Contact:
Rick Black
Dennard Lascar Investor Relations
krp@dennardlascar.com
(713) 529-6600
1 Purchase price and related valuation metrics reflect Kimbell's
2 Illustrative cash flow multiple based on expected Q1'25 through Q4'25 production and average realized cash margin of
3 Based on Q4 2024 run-rate daily production of Seller of 1,842 Boe/d (6:1), Kimbell's Q3 2024 run-rate average daily production of 23,846 Boe/d (6:1), and Kimbell's Q3 2024 cash G&A of
4 Net leverage defined as net debt / TTM consolidated Adjusted EBITDA.
5 Shown on 6:1 basis. Based on estimated Q4 2024 run-rate average daily production for the acquired assets as of October 1, 2024, the effective date of the transaction.
6 6,953 Net Royalty Acres normalized to 1/8th.
7 Based on Kimbell rig count of 90 and Seller rig count of 2 as of 9/30/2024, and Baker Hughes
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SOURCE Kimbell Royalty Partners, LP
FAQ
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