With the acquisition, ARLP now directly owns approximately 51,000 net royalty acres concentrated in the Permian Basin (47%), SCOOP/STACK (40%), Bakken (8%) and Appalachian Basin (5%)
Image: The newly acquired acreage includes 827 gross horizontal wells. Photo: Courtesy of IndypendenZ at FreeDigitalPhotos.net.
US-based diversified coal producer and marketer Alliance Resource Partners (ARLP) has completed the previously announced acquisition of oil and gas mineral interests from Wing Resources, and Wing Resources II, for a cash purchase price of $145m (£119m).
The transaction, which is effective from 1 May 2019, adds approximately 9,000 net royalty acres in the Midland Basin with exposure to more than 400,000 gross acres.
The acquisition of assets from Wing increases ARLP’s presence in the Permian Basin
The newly acquired acreage includes 827 gross horizontal wells currently producing estimated net production of over 500 BOE per day, with 71% oil and 14% NGLs.
In addition, the assets include an additional 405 drilled but uncompleted wells and 298 permits, which are under active development by well-capitalised operators bringing visible and near-term growth to current production.
ARLP said that the acquisition makes it directly own approximately 51,000 net royalty acres concentrated in the Permian Basin (47%), SCOOP/STACK (40%), Bakken (8%) and Appalachian Basin (5%).
Besides, it indirectly owns approximately 4,000 net royalty acres through its limited partner interest in AllDale Minerals III.
ARLP chairman, president and chief executive officer Joseph W Craft III said: “Today’s announcement reflects ARLP’s commitment to build its oil and gas minerals segment as a strategic growth platform. The Wing acquisition enhances our already significant ownership position in the prolific, liquids-rich Permian Basin.
“Combined with our other minerals assets, we expect the organic growth of our minerals segment to provide meaningful EBITDA and cash flow contributions within the next two years. Continued disciplined acquisitions will further enhance the long-term cash flow growth for ARLP and create value for our unitholders.”
For the acquisition, Evercore served as exclusive financial advisor to ARLP, and TenOaks Energy Advisors acted as exclusive financial advisor to Wing.
As a diversified natural resource company, ARLP is that generates income from coal production and oil and gas mineral interests located in strategic producing regions across the US