Sitio Royalties, a pure-play mineral and royalty company, has agreed to acquire US-based oil and gas rights company Brigham Minerals in an all-stock merger with an aggregate enterprise value of $4.8bn.
Founded in 2012, Brigham Minerals is focused on purchasing mineral interests directly from private landowners.
The transaction has an equity value of $1.73bn and is expected to close in the first quarter of 2023.
Upon completion of the transaction, Brigham and Sitio shareholders will own 46% and 54% stakes, respectively, in the combined company.
The two companies have complementary assets in the Permian basin and other active oil basins in the US. It will own 259,510 net royalty acres on a combined basis.
To be led by the current Sitio management team, the combined entity will be operated under the Sitio Royalties brand name. It will be headquartered in Denver, Colorado.
Sitio CEO Chris Conoscenti said: “Our combined company will be the largest publicly traded mineral and royalty company in the US by enterprise value that is focused on consolidation across a diverse set of operators and geographies.
“We will be able to pursue opportunities that few others can because of the size of our business, strength of our balance sheet, optimised cost structure, and access to capital.”
Funds managed by Kimmeridge, Blackstone, and Oaktree, which currently hold stakes of 43.5%, 24.8%, and 15.4% in Sitio respectively, have agreed to vote in favour of the transaction.
Noam Lockshin, the current chairman of Sitio and a partner at Kimmeridge, would serve as the chairman of the new company, upon completion of the deal.
Brigham CEO Robert M Roosa said: “Our merger with Sitio creates the industry leading powerhouse in the minerals space, with over 30% coverage in the Permian basin, approximately 100 rigs running across all of our operating basins, and greater than 50 activity wells to continue to drive production and cash flow growth.”