Kimbell Royalty Partners acquires Midland basin assets for $231 million

Kimbell Royalty Partners, LP an 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 held by a private seller in a cash and unit transaction valued at approximately $231 million.

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.

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 Martin County (63%) and Andrews County (37%).  The acquisition is expected to close in the first quarter of 2025, subject to customary closing conditions.

“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,” 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.  Thanks to the Kimbell team, and our advisors, for working diligently to consummate this mutually beneficial transaction."

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 16%7 of the total active land rigs drilling in the continental United States.  In addition, over 97% of all rigs in the continental United States are located in counties where Kimbell is expected to hold mineral interest positions following the completion of the acquisition.