Alliance Resource Partners said it will expand its oil and gas royalties platform with a $206.2 million acquisition of interests in Alldale Minerals III and IV, a deal that implies a $410.0 million gross valuation for the two partnerships.
The partnership said the interests being sold by third-party holders are valued at $306.2 million, with ARLP buying $206.2 million of that total and related parties of Chairman, President and CEO Joseph W. Craft III buying $100.0 million. ARLP said the difference between the $410.0 million gross valuation and the $306.2 million in interests being sold reflects stakes already owned by ARLP and Craft-related parties.
At closing, ARLP’s economic interest in Alldale III & IV is expected to rise sharply, from about 5% to 61%. ARLP also expects to own 100% of the general partner interests through a wholly owned subsidiary, with those GP interests becoming non-economic after closing.
The transaction has an effective date of April 1, 2026, and is expected to close in July 2026.
The acquired portfolio includes about 48,500 net royalty acres across the Permian, Anadarko, Bakken and Haynesville. ARLP said the Permian accounts for about 7,300 of those acres and 52% of first-quarter 2026 total royalty revenue. Oil represented about 67% of first-quarter royalty revenue.
Production across Alldale III & IV averaged about 5,940 barrels of oil equivalent per day in the first quarter of 2026, with 3,665 boe per day net to ARLP’s economic interests. That mix was 27% oil, 18% natural gas liquids and 55% natural gas.
ARLP said the deal will lift its royalty footprint in several basins. Trailing-twelve-month new wells placed on production are expected to increase by 59% in the Northern Delaware, 78% in Anadarko and 91% in Bakken.
On a combined basis, ARLP said the acquisition will give it control of about 115,680 net royalty acres, including more than 44,770 acres in the Permian. Pro forma first-quarter 2026 production is expected to total about 17,295 boe per day, with 14,285 boe per day net to ARLP’s economic interests. The combined portfolio is expected to have exposure to 59 gross active rigs, including 47 on Permian acreage.
ARLP said the acquisition is priced at about 5.0 times projected next-twelve-month adjusted EBITDA, based on June 5, 2026 commodity strip pricing and including hedges to be assumed at closing. It said the deal is expected to be immediately accretive to free cash flow per unit and that pro forma total leverage should stay below 1.0x after closing.
Funding is expected to come from cash on hand, borrowings under ARLP’s revolving credit facility and a new debt facility at Alliance Minerals, a wholly owned subsidiary. The market has reacted to these announcements by moving the company's shares 0.2% to a price of $25.67. If you want to know more, read the company's complete 8-K report here.
