Kimbell Royalty Partners, LP Announces $231 Million Midland Basin Acquisition in Cash and Unit Transaction(1)

Core Viewpoint - Kimbell Royalty Partners, LP has announced an acquisition of mineral and royalty interests valued at approximately $231 million, enhancing its position in the Midland Basin and expected to be immediately accretive to cash flow per unit [2][4][6]. Acquisition Details - The acquisition involves a cash and unit transaction, with Kimbell having the option to pay$207 million in cash and approximately 1.4 million common units valued at $24 million [2]. - The acquired assets are expected to produce approximately 1,842 Boe/d as of October 1, 2024, with a production mix of 60$30.9 million of cash flow at strip pricing as of January 3, 2025, reflecting a transaction multiple of approximately 7.5x [6]. - Kimbell expects to increase daily production by approximately 8% and decrease cash G&A per Boe by approximately 7% following the acquisition [6]. - The acquisition is expected to add 1.22 net DUCs and net permitted locations, increasing Kimbell's current major net well inventory by approximately 16% [6]. Strategic Positioning - The acquired assets are located under the Mabee Ranch in the Midland Basin, with a high interest position and significant production potential from approximately 875 gross producing wells [4][7]. - Kimbell's total acreage will exceed 17 million gross acres, with over 130,000 gross wells and 92 active rigs post-acquisition, representing approximately 16% of the total active land rigs in the continental U.S. [8]. - The acquisition is expected to strengthen Kimbell's liquids weighting from 48% to 51% of the daily production mix [12]. Operational Highlights - The acquired assets are operated by premier E&P operators, including ConocoPhillips, Diamondback Energy, and ExxonMobil, ensuring high-quality reservoir development [4][12]. - Kimbell maintains a conservative balance sheet with expected pro forma net leverage of approximately 1.0x following the transaction [6].