Kimbell Royalty Partners, LP Announces $231 Million Midland Basin Acquisition in Cash and Unit Transaction(1)

In This Article:

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)2

  • Expected to increase daily production by approximately 8% and expected to decrease cash G&A per Boe by approximately 7%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

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).  The final mix of funding will be determined at closing.