Canada-based Freehold Royalties has signed agreements to acquire ‘high-quality’ mineral title and royalty assets in the US from two undisclosed ‘private sellers’ for C$155m ($119.5m).
Under the deals, Freehold Royalties will acquire C$123m worth of assets located in the Midland basin, predominantly in Howard County, Texas, as well as C$32m worth of assets located in the Eagle Ford basin in Texas.
In a separate transaction, Freehold recently acquired mineral title and royalty assets in the Midland basin, from an undisclosed firm, for $19m.
With the acquisitions in the US, Freehold anticipates its land holdings in the North American country to increase by approximately 147,000 gross acres and 8,000 net royalty acres, and add production volumes of nearly 1,100 barrels of oil equivalent per day (boepd).
In a press statement, Freehold said: “The US acquisitions enhance the quality of Freehold’s North American royalty portfolio through further strengthening of our peer leading realised commodity pricing, building on the production growth platform we have established in the Permian basin, and continuing to position our portfolio in the highest quality oil and gas development areas across North America.”
The Howard County Midland assets covered under the transaction include concentrated mineral title and royalty land position in the core of the Midland basin, predominantly in Howard County, across 51,000 gross acres.
In Q4 2022, these assets are expected to have an average production rate of 550boepd, and 750boepd in 2023.
This transaction is subject to customary confirmatory due diligence and potential adjustments for any title defects, and is scheduled to close next month.
Freehold will purchase the Eagle Ford assets, which comprise concentrated mineral title and royalty land positions in the core of the Eagle Ford, across 41,000 gross acres.
As per the estimates, the assets will have an average production rate of 210boepd (78% liquids) in Q4 2022 and 250boepd (76% liquids) in 2023.
Subject to customary confirmatory due diligence and potential adjustments for any title defects, the deal is scheduled for completion in mid-September 2022.