Osprey Energy Acquisition has agreed to acquire the assets of Royal Resources from asset management firm Blackstone, in a move to create a new oil and gas minerals company with a total enterprise value of about $894m.
Image: Osprey Energy to acquire assets of Royal Resources from Blackstone. Photo: courtesy of suwatpo/Freedigitalphotos.net.
The combined company following the Osprey Energy and Royal Resources merger will be named as Falcon Minerals, which will have Eagle Ford and Austin Chalk asset positions spread across 251,000 gross unit mineral acres. Net production from the assets is expected to reach nearly 6,352 boe per day in 2018.
The assets of Royal Resources represent 100% of the mineral interests of Blackstone in the Eagle Ford Shale in Texas. As of now, there are more than 1,789 producing wells on the properties with expected liquids production for this year to be in excess of 73%, with more than 80% of revenue to come from oil.
Currently, Royal Resources is owned by funds managed by Blackstone Energy Partners and Blackstone Capital Partners.
Osprey Energy Acquisition CEO Jonathan Z. Cohen said: “We will have a unique opportunity to benefit from some of the highest quality acreage in the United States, driven by the best operators in the play dedicated to significantly growing their production across our position.
“There is a tremendous opportunity to build on this excellent business by utilizing our organic growth and acquisition skills in a highly fragmented oil and gas minerals industry, and we are thrilled to partner with Blackstone and benefit from their vast experience in the sector.”
Post-merger, Osprey, which will be renamed Falcon Minerals, will be reorganized with its operating assets to be grouped into a separate limited partnership. This partnership will be named as Falcon Minerals Operating Partnership.
Blackstone will offer the Royal Resources assets to Falcon Minerals Operating Partnership for a sum of $400m along with 40 million of common units of Falcon Minerals Operating Partnership.