Kimbell Royalty Partners, LP Announces $143.1 Million Acquisition of Sabalo Holdings, LLC Subsidiary
FORT WORTH, Texas, -- Kimbell Royalty Partners, LP (NYSE: KRP) ("Kimbell" or the "Company"), a leading owner of oil and gas mineral and royalty interests in approximately 16 million gross acres in 28 states, today announced that it has agreed to acquire mineral and royalty interests ("acquired assets") from MB Minerals, L.P., a subsidiary of Sabalo Holdings, LLC (a portfolio company of EnCap Investments), in a cash and unit transaction valued at approximately $143.1 million5, subject to purchase price adjustments and other customary closing adjustments (the "Acquisition"). The purchase price for the Acquisition is comprised of $48.8 million in cash (approximately 34% of the total consideration), approximately 5.4 million newly issued common units of Kimbell Royalty Operating, LLC valued at $85.4 million, and approximately 0.6 million newly issued common units of Kimbell Royalty Partners, LP valued at $8.9 million.
For the next twelve months, Kimbell estimates that, as of April 1, 2023, the acquired assets will produce approximately 1,901 Boe/d (1,459 Bbl/d of oil, 219 Bbl/d of NGLs, and 1,338 Mcf/d of natural gas) (6:1). The acquired assets are concentrated in northern Howard County and southern Borden County. The Acquisition is expected to close in the second quarter of 2023, subject to customary closing conditions, and the effective date is expected to be April 1, 2023.
Asset Highlights: Significant development activity across acreage provides line of sight to substantial near-term production
- Approximately 806 Net Royalty Acres (6,445 NRA normalized to 1/8th) on approximately 60,000 gross unit acres located in Northern Midland Basin
- High-interest contiguous footprint with 1.55% average unit Net Revenue Interest
- High confidence in established operator spacing and well performance in de-risked zones in the Spraberryand Wolfcamp
- Management estimates 5.3 MMBoe in total proved reserves, reflecting a purchase price of approximately $26.97 per total proved Boe
- 97% of estimated first year cash flow from PDP and PDNP wells
- 3 active rigs on the acreage as of March 31, 2023
- Mineral and Overriding Royalty ownership in over 100 horizontal DSUs, 100% Held-By-Production
- Over 300 total producing wells
- Liquids-focused asset base expected to strengthen Kimbell's oil weighting from 29% to 34% of daily production mix