US-based Alliance Resource Partners (ARLP) has completed the $145m acquisition of oil and gas mineral interests from Wing Resources and Wing Resources II.
The transaction will allow ARLP to expand its position in the Permian Basin. It will add over 9,000 net royalty acres in the Midland Basin with exposure to more than 400,000 gross acres.
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At present, 827 gross horizontal wells on the newly acquired acreage are delivering an estimated net production of more than 500boe/d with 71% of oil and 14% of natural gas liquids (NGLs).
With an additional 405 drilled but uncompleted wells and 298 permits, these assets are under active development by operators.
ARLP is currently the direct owner of nearly 51,000 net royalty acres concentrated in the Permian Basin (47%), SCOOP/STACK (40%), Bakken (8%) and Appalachian Basin (5%). It indirectly owns approximately 4,000 net royalty acres through its limited interest in AllDale Minerals.
ARLP chairman, president and CEO Joseph W Craft III said: “The Wing acquisition enhances our already significant ownership position in the prolific, liquids-rich Permian Basin. Combined with our other minerals assets, we expect the organic growth of our minerals segment to provide meaningful EBITDA and cash flow contributions within the next two years.
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By GlobalData“Continued disciplined acquisitions will further enhance the long-term cash flow growth for ARLP and create value for our unit holders.”
With the acquisition of mineral interests from Wing, ARLP anticipates 2019 Segment Adjusted EBITDA contribution of between $48m and $54m with production net to ARLP between 4,500boe/d and 4,700boe/d.
ARLP appointed Evercore as the financial adviser while TenOaks Energy Advisors acted as the financial adviser to Wing for the transaction.
In January, ARLP closed $175.96m transaction to purchase certain partnership interests in AllDale Minerals and AllDale Minerals II (collectively AllDale) to gain oil and gas mineral interests in US resource plays.
