Kimbell funded the purchase price through a $325m private placement of its 6% Series A Cumulative Convertible Preferred Units to funds managed by affiliates of Apollo, and used borrowings under its $400m revolving credit facility
Kimbell acquires Permian and Mid-Continent assets. (Credit: WORKSITE Ltd. on Unsplash)
Kimbell Royalty Partners has completed its previously announced acquisition of certain mineral and royalty interests in Permian and Mid-Continent basins, for a total of $455m in cash.
The US-based oil and gas mineral and royalty company acquired the assets, with 64% reserve value in the Permian Basin and 36% reserve value in the Mid-Continent, from a private seller.
Earlier this month, Kimbell Royalty Partners signed an acquisition agreement with the seller.
Kimbell general partner, chairman and chief executive officer Bob Ravnaas then said: “The acquisition represents the largest transaction in company history and is expected to significantly enhance Kimbell’s positions in the best-performing, highest-growth oil and gas basins in the Lower 48.
“The targeted portfolio of mineral and royalty interests complements our disciplined approach to M&A, combining excellent reservoir quality, near-term cash flow and long-term production growth.
“We expect the Acquisition to be immediately accretive to distributable cash flow per unit, with accelerated accretion anticipated in future years, and look forward to continuing our role as a major consolidator in the oil and natural gas royalty sector.”
It has funded the purchase price through a $325m private placement of its 6% Series A Cumulative Convertible Preferred Units to funds managed by affiliates of Apollo.
In addition, the royalty company also used borrowings under its $400m revolving credit facility.
With the completion of the transaction, Kimbell will now have more than 17 million gross acres, 129,000 gross wells and a total of 100 active rigs on its properties.
The company is entitled to all cash flow from production from the acquired assets since the effective date of 1 June 2023.
Revenues and certain other operating statistics under generally accepted accounting principles will be recorded from the closing date of 13 September 2023.
Kimbell estimates that the acquired assets produced around 4,840Boe/d, including 1,619Bbl/d of oil, 1,227Bbl/d of natural gas liquids (NGLs), and 11,964Mcf/d of natural gas, as of 1 June 2023.
The company estimates a total production of around 5,049Boe/d, including 1,682Bbl/d of oil, 1,312Bbl/d of NGLs, and 12,327Mcf/d of natural gas, for the full year 2024.