Viper Vitality Companions LP, a subsidiary of Diamondback Vitality Inc., is buying mineral and royalty pursuits from associates of Warwick Capital Companions LLP and GRP Vitality Capital LLC in change for about 9.02 million Viper widespread models and $750 million in money, topic to customary changes.
The acquisition contains roughly 4,600 web royalty acres within the Permian Basin, plus a further 2,700 web royalty acres in different main basins, totaling roughly 7,300 web royalty acres, Viper stated in a information launch. The acquisition has an efficient date of October 1, with closing anticipated in the course of the fourth quarter, topic to customary closing situations.
The belongings have a present manufacturing of roughly 4,000 barrels per day (bpd) of oil or 7,000 barrels of oil equal (boepd), which is predicted to extend to round 4,750 bpd of oil or 8,500 boepd in full-year 2024 based mostly on current manufacturing and timing assumptions on present work-in-progress places “which can be extra conservative than Viper’s typical base assumptions”, the corporate stated.
Round 2,800 web royalty acres of the acquisition are within the Midland Basin, with 1,800 web royalty acres within the Delaware Basin. There are a mixed 21 gross rigs at the moment working on acreage place, in keeping with the discharge.
The money portion of the transaction is predicted to be funded by way of a mixture of money available, borrowings underneath Viper’s credit score facility, and as much as $200 million of dedicated fairness from Diamondback, in addition to proceeds from a number of capital markets transactions, together with a possible bond providing, topic to market situations and different components, in keeping with the discharge.
Viper has been granted the fitting to make Diamondback buy as much as 7.22 million widespread models for as much as an combination of $200 million to partially finance the transaction, the discharge stated. Viper can train the fitting till the cut-off date of the acquisition.
“This acquisition of high-quality mineral and royalty belongings is a very differentiated alternative that represents a major worth proposition for Viper and its unitholders”, Viper Normal Accomplice CEO Travis Stice stated. “The excessive confidence near-term manufacturing outlook leads to significant and rapid accretion to all related monetary metrics, together with an estimated enhance of [seven to eight percent] to our anticipated 2024 return of capital program. Equally as vital, and what actually differentiates this chance, nonetheless, is each the amount and high quality of the undeveloped acreage place. Credit score is as a result of GRP Vitality Capital crew for constructing an asset of this dimension, scale, and total high quality that can’t be replicated within the non-public minerals market immediately”.
“Along with the rapid monetary accretion, this deal units Viper up with an unparalleled progress runway as extremely concentrated undeveloped models are turned to manufacturing over the approaching years. Professional forma for this transaction, Viper will personal roughly 32,000 web royalty acres within the Permian Basin, and we imagine the high-quality nature of our belongings will place us to seize an growing quantity of exercise, notably inside the Northern Midland Basin, going ahead. As we glance forward, the mineral market stays extremely fragmented and Viper plans to play a significant position in consolidating this market as high-value proposition alternatives current themselves”, Stice added.
Warwick Capital Companions Co-Founder and Managing Accomplice Alfredo Mattera stated, “This transaction underpins Warwick’s partnership-led strategy to sourcing compelling funding alternatives alongside best-in-class sector specialists corresponding to GRP Vitality Capital. The high-quality portfolio GRP has constructed signifies that the transaction has not solely offered a optimistic final result for our buyers, however a incredible asset for Viper to tackle into the years to return”.
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