Elk Range Royalties, LP (“Elk Range”) is pleased to announce it has closed an acquisition of Permian Basin mineral and royalty interests pursuant to a purchase and sale agreement (“PSA”) with Tower Rock Oil & Gas and its affiliates.
The PSA covers ~2,300 core net royalty acres (“NRAs”), over 2,600 gross producing horizontal wells and more than 6,000 remaining gross undeveloped locations distributed across the Delaware and Midland Basins. LTM cash flow on the acquired assets was ~$3.7mm and includes top operator exposure to Pioneer, Endeavor and Permian Resources. Elk Range funded the acquisition through a combination of its equity commitment from NGP Royalty Partners, L.P. and its credit facility with Texas Capital Bank.
Charlie Shufeldt, CEO of Elk Range, commented, “We are excited to acquire a core Permian Basin mineral and royalty package in a competitive market environment. This acquisition allows us to close out the Elk Range Royalties, LP commitment with an attractive acquisition that has a mix existing cash flow and future development.”
"We enjoyed working with the Elk Range team; they are consummate professionals. Our excitement about this divestiture is multi-faceted as we worked hard to put together a portfolio of first-rate assets. This partial exit provides generous distributions to our fund investors and fresh capital to deploy into high quality mineral investments in our new 4th fund,” commented Oscar Torres, CEO and co-founder of Tower Rock, in a statement.
With the closing of this transaction with Tower Rock, Elk Range has fully invested the capital committed to Elk Range Royalties, LP. The team has secured a new commitment from NGP Royalty Partners II, L.P. to Elk Range Royalties II, LP and will begin investing out of that partnership immediately.
Stubbeman, McRae, Sealy, Laughlin & Browder, Inc. served as legal counsel for Elk Range on the transaction. Rachel Reese and Associates served as legal counsel for Tower Rock on the transaction.