Kimbell Royalty Partners wraps up $455m asset purchase in Permian Basin and Mid-Continent
Kimbell Royalty Partners, LP (NYSE: KRP), a leading player in oil and gas mineral and royalty interests, has successfully closed its $455 million acquisition of assets from a private seller. The acquisition was financed through a $325 million private placement of 6.00% Series A Cumulative Convertible Preferred Units by Apollo-affiliated funds, alongside borrowings from Kimbell Royalty Partners’ $400 million revolving credit facility. Kimbell Royalty Partners is entitled to all cash flows from the Acquired Assets since June 1, 2023. The acquisition’s revenues and other key operational statistics will be officially recorded as of September 13, 2023.
The acquired assets are expected to significantly boost Kimbell Royalty Partners’ production capabilities. As of June 1, 2023, the acquired assets produced approximately 4,840 Boe/d, which consists of 1,619 Bbl/d of oil, 1,227 Bbl/d of NGLs, and 11,964 Mcf/d of natural gas. Kimbell Royalty Partners estimates that these acquired assets will enhance production to around 5,049 Boe/d for the full year 2024. The details indicate that the acquired assets are primarily concentrated in the Permian Basin, accounting for 64% of reserve value, and the Mid-Continent, making up the remaining 36%.
The acquisition marks a strategic move for Kimbell Royalty Partners, solidifying its position in the oil and gas sector. The firm’s $455 million acquisition deal, funded substantially by Apollo’s $325 million private placement and Kimbell Royalty Partners’ $400 million revolving credit facility, is poised to generate substantial returns in both the short and long term.