Viper Energy will purchase the assets from Santa Elena Minerals for approximately 5.2 million common units
Image: Viper Energy Partners intends to strengthen its business with new acquisition. Photo: courtesy of Dani Simmonds/Freeimages.com.
Viper Energy Partners, a subsidiary of US-based oil and gas producer Diamondback Energy, has signed an agreement to acquire certain mineral and royalty interests from Santa Elena Minerals.
Under the terms of the deal, Viper Energy will purchase the assets for approximately 5.2 million common units representing limited partner interests in Viper. The transaction is valued at $150m (£120m).
The sale includes 1,358 net royalty acres in Glasscock and Martin counties
The assets considered for acquisition include 1,358 net royalty acres across two ranches primarily in Glasscock and Martin counties, with more than 65% of the acreage operated by Diamondback.
The Q2 2019 production of the assets totalled approximately 1,400 boe/day, with multiple years of active development ahead on current Diamondback drilling and completion schedules
Viper general partner CEO Travis Stice said: “Viper’s announced acquisition of primarily Diamondback-operated properties, which will be immediately accretive upon closing, further distinguishes Viper’s business model in the minerals market due to the clear visibility into future development of this acreage.
“This acquisition is another step in Viper’s strategy to continue to consolidate the fragmented private minerals market in the Permian Basin, both through our normal ground game of smaller deals, as well as larger acquisitions such as this deal announced today.
“Viper continues to use its size, scale and expertise to accumulate Tier 1 acreage, and we believe there remain significant opportunities ahead for us to continue this consolidation, which will supplement the robust production growth of our existing asset base.”
Planned to be completed in the fourth quarter of 2019, the deal is subject to continued diligence and closing conditions.
Santa Elena co-CEO Austen Campbell said: “Santa Elena is excited about this transaction and our continuing relationship with Viper. With Diamondback’s significant operatorship in these properties, Viper is the right strategic partner for these assets.”
Last year, Diamondback Energy acquired Energen in an all-stock deal valued at approximately $9.2bn, including debt.
The deal is part of Diamondback’s efforts to increase its acreage in the Permian’s Midland and Delaware basins by about 85%, up from 211,000 net acres to 390,000 net acres.