
Kimbell Royalty Partners is acquiring oil and natural gas mineral and royalty interests in the Midland Basin in a cash-and-equity acquisition worth $231 million. (Source: Shutterstock.com)
Kimbell Royalty Partners will acquire oil and natural gas mineral and royalty interests in the Midland Basin in a cash-and-equity deal valued at $231 million, the company said Jan. 7.
Kimbell will pay $207 million in cash and 1.4 million common units valued at $24 million for interests held by Boren Minerals.
The interests are located in the Mabee Ranch and concentrated in Martin and Andrews counties, Texas. They hold more than 875 gross producing wells across 68,000 gross acres. Operators on the acreage include ConocoPhillips, Diamondback Energy and Exxon Mobil Corp.
The assets’ average anticipated production for 2025 is approximately 1,842 boe/d (60% oil, 17% natural gas, 23% NGL), generating $30.9 million cash flow, Kimbell said. The company expects new net wells needed to maintain production will grow to 6.5 net wells from 5.8 wells.
The deal is expected to build on Kimbell’s Permian Basin portfolio and grow Kimbell’s undrilled inventory in the play by about 19%. The Permian is Kimbell’s leading basin in terms of production, active rig count, DUCs, permits and undrilled inventory, the company said.
The assets “enhance Kimbell's Permian footprint with excellent reservoir quality, near-term cash flow and long-term production growth,” said Bob Ravnaas, chairman and CEO of Kimbell’s general partner. “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."
The transaction is expected to close in first-quarter 2025. Kimbell’s board of directors and Boren’s governing body have both approved the transaction.
On Jan. 7, Kimbell also announced an underwritten public offering of 9 million common units, with the option to purchase an additional 1.35 million common units. Proceeds from the offering will be used to repay its revolving credit facility, which will be used to fund the cash portion of the Boren acquisition.
Citigroup served as exclusive financial adviser and White & Case LLP acted as legal counsel to Kimbell. TPH&Co. served as exclusive financial adviser and MLT Aikins LLP and Vinson & Elkins LP served as legal adviser to Boren.
The White & Case team was led by Capital Markets Partner Jason Rocha and M&A Partner Charlie Ofner, both in Houston.
Recommended Reading
EIA: NatGas Storage Withdrawal Misses Forecasts by 20 Nearly Bcf
2025-01-23 - Natural gas prices fell following the release of the U.S. Energy Information Administration’s weekly storage report showing a near-20 Bcf miss on analysts’ expectations.
NatGas Storage Drops Ahead of Predictions
2024-11-21 - U.S. Energy Information Administration's weekly report shows the first withdrawal of the fall, a week before the consensus forecast.
EIA: NatGas Storage Withdrawal Eclipses 300 Bcf
2025-01-30 - The U.S. Energy Information Administration’s storage report failed to lift natural gas prices, which have spent the week on a downturn.
US NatGas Prices Hit 23-Month High on Increased LNG Feedgas, Heating Demand
2024-12-24 - U.S. natural gas futures hit a 23-month high on Dec. 24 in thin pre-holiday trading.
Bernstein Expects $5/Mcf Through 2026 in ‘Coming US Gas Super-Cycle’
2025-01-16 - Bernstein Research’s team expects U.S. gas demand will grow from some 120 Bcf/d currently to 150 Bcf/d into 2030 as new AI data centers and LNG export trains come online.
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.