Kimbell Royalty Partners Announces $151.3 Million Mineral and Royalty Acquisition from EnCap Investments L.P. in an All-Equity Transaction

 

News

Kimbell Royalty Partners Announces $151.3 Million Mineral and Royalty Acquisition from EnCap Investments L.P. in an All-Equity Transaction

Kimbell Royalty Partners, LP
February 7, 2019

FORT WORTH, Texas, Feb. 7, 2019 /PRNewswire/ -- Kimbell Royalty Partners, LP (NYSE: KRP) ("Kimbell Royalty Partners" or "Kimbell"), a leading owner of oil and natural gas mineral and royalty interests across 28 states, today announced that it has agreed to acquire certain oil and gas royalty assets from EnCap Investments L.P. ("EnCap") for approximately $151.3 million(the "Acquisition") in a 100% equity transaction.

Transaction Highlights

  • Includes oil and natural gas mineral and royalty interests controlled by EnCap through Phillips Energy Partners, Phillips Energy Partners II and Phillips Energy Partners III 
  • Expected to close in late March 2019 and be immediately accretive to distributable cash flow per unit 
  • Includes diversified package of royalty interests with over 64% of production (6:1) from the Eagle Ford Shale, Permian Basin, Haynesville Shale and Powder River Basin 
  • Purchase price is composed of 9.4 million newly issued units in Kimbell Royalty Operating, LLC; further reduces Kimbell's leverage ratio due to 100% equity used to fund the purchase price 
  • Adds approximately 1,600 Boe/d of production (6:1) 
  • Seventeen rigs actively drilling on the acreage 
  • Liquids-focused asset base with approximately 77% of revenue from oil and natural gas liquids 
  • Production mix on a 6:1 basis of approximately 38% oil, 48% natural gas and 14% natural gas liquids 
  • Adds approximately 12,200 net royalty acres, increasing Kimbell's total net royalty acre position by 9% to approximately 144,100 net royalty acres across the continental U.S. 
  • Maintains Kimbell's five-year PDP decline rate – pro forma approximately 12% 
  • Provides support for a further increase in the borrowing base under Kimbell's revolving credit facility, adding to already strong liquidity position 
  • Effective date of January 1, 2019, with Kimbell entitled to revenues from production on and after such date