Kimbell Royalty Partners, LP has acquired approximately 875 gross producing wells on over 68,000 gross acres under the Mabee Ranch in the Midland Basin.
According to a news release, the acquisition, valued at $231 million, covers 17 million gross acres across 28 states and aligns with Kimbell's targeted oil and natural gas mineral and royalty interests. The company has the option to pay entirely in cash or through a combination of $207 million in cash and approximately 1.4 million common units of Kimbell Royalty Partners, LP, valued at $24 million. The seller is described as "private."
Under the purchase agreement, Kimbell has flexibility in its payment method, either fully in cash or through a blend of cash and common units. This combination will be finalized upon closing the deal.
Bob Ravnaas, chairman and CEO of Kimbell's general partner, said that they are striving to complete the transaction by the first quarter of this year for mutual benefit. "The acquired assets are located on one of the largest family-owned tracts in the heart of the Midland basin," he said. Ravnaas noted that these assets enhance Kimbell's Permian footprint with excellent reservoir quality, near-term cash flow, and long-term production growth. He added that nearly 875 gross producing wells involved in this deal will immediately contribute positively to distributable cash flow per unit.
The oil and natural gas assets set for acquisition were producing 1,842 barrels per day at the beginning of October. The company anticipates maintaining this production level throughout the year, with 63 percent of oil and gas minerals and royalty interests situated in Martin County and 37 percent in Andrews County.