Kimbell Royalty Acquires $231M Mineral Interests

By Bobby Samwell • Wednesday, January 08 07:09 • Permanent Link

Fort Worth, Texas, January 7, 2025 – Kimbell Royalty Partners, LP (NYSE: KRP) ("Kimbell" or the company) has announced the acquisition of mineral and royalty interests held by a private seller in a cash and unit transaction valued at approximately $231 million. This acquisition is expected to be immediately accretive to distributable cash flow per unit and is anticipated to have an estimated acceleration of accretion over the next 5 years.

The acquisition is targeted towards oil and natural gas mineral and royalty interests located under the prolific Mabee Ranch in the core of the Midland Basin, covering over 68,000 gross acres and featuring approximately 875 gross producing wells. The transaction is expected to increase daily production by approximately 8% and decrease cash G&A per boe by approximately 7%. Following the transaction, Kimbell expects net wells needed to maintain flat production to modestly increase from 5.8 net wells to 6.5 net wells.

As of October 1, 2024, the acquired assets were estimated to produce approximately 1,842 boe/d (60% oil, 17% natural gas, 23% NGL). The acquisition is expected to strengthen Kimbell’s liquids weighting from 48% of daily production mix as of Q3 2024 to 51% of the combined daily production mix. Additionally, management estimates 11.5 mmboe in total proved reserves, reflecting a purchase price of approximately $20.13 per total proved boe.

The acquisition is expected to add 1.22 net ducs and net permitted locations ("net wells"), an approximate 16% increase in Kimbell’s current major net well line of site inventory. Furthermore, the seller portfolio is expected to add an estimated 6.06 net upside locations, increasing Kimbell’s major net undrilled Permian inventory by approximately 19%.

Following the acquisition, Kimbell expects to have over 17 million gross acres, over 130,000 gross wells, and a total of 92 active rigs on its properties, representing approximately 16% of the total active land rigs drilling in the continental United States. Additionally, over 97% of all rigs in the continental United States are expected to be located in counties where Kimbell is set to hold mineral interest positions following the acquisition.

Following these announcements, the company's shares moved 0.4%, and are now trading at a price of $16.27. Check out the company's full 8-K submission here.

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