Kimbell Royalty Partners LP (NYSE: KRP) said April 24 it closed the acquisition of 1.1 million gross (6,700 net) royalty acres of overriding royalty interests (ORRI) in the Anadarko Basin from Maxus Energy Corp. for $15.9 million.
The acquisition primarily consists of assets located in the Texas Panhandle and Northwest portion of Oklahoma and is substantially all HBP, the company said. Kimbell also said it funded the transaction through its credit facility.
Maxus Energy is a U.S.-based subsidiary of Argentina’s state-owned YPF SA. The company filed for bankruptcy protection in June 2016.
"The completion of this acquisition from a seller in a bankruptcy for acreage in the active Anadarko Basin demonstrates our opportunistic and disciplined approach to growth," Bob Ravnaas, chairman and CEO of Kimbell, said in a statement. "One of our primary objectives has been to acquire high quality, producing acreage with significant amounts of recoverable oil and gas, a complementary geographic footprint and long-life and shallow decline expectations."
The diversified package includes production from multiple stacked pay zones in more than 2,600 producing wells located across 32 counties in five states throughout the Midcontinent, consisting of Texas, Oklahoma, Louisiana, Wyoming and New Mexico.
A total of 145 wells have been drilled on the acquired interest since 2014, according to the company release.
Ravnaas said he believes the acreage is well positioned for continued growth.
"In addition, current production rates in the Anadarko Basin are expected to rise through increased rig activity due to an expanding infrastructure and technological advancements," he said. "Furthermore, from a valuation and operational standpoint, the transaction is expected to be accretive to KRP on enterprise value/net production, enterprise value/net acreage and cash flow per unit basis."
Management has estimated the average daily production of the acquired interest is about 272 net barrels of oil equivalents per day (boe/d) for first-quarter 2017. Total proved reserves are 1.873 million boe as of April 1, which consists of 74% natural gas, 16% NGL and 10% oil.
Kimbell Royalty Partners is an MLP based in Fort Worth, Texas, with oil and natural gas mineral and royalty interests across 20 states, the release said. The company is managed by its general partner Kimbell Royalty GP LLC.
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