FORT WORTH, Texas, April 20, 2020 /PRNewswire/ -- Kimbell Royalty
Partners, LP (NYSE: KRP) ("Kimbell") today announced that it
has closed the previously announced purchase of the mineral and
royalty interests held by Dallas-based Springbok Energy Partners, LLC
("SEP I") and Springbok Energy Partners II, LLC ("SEP II" and,
together with SEP I, "Springbok") for a purchase price of
approximately $123.1 million (the
"Acquisition") funded by a combination of approximately
$95 million in cash and approximately
2.2 million common units of Kimbell and approximately 2.5 million
common units of Kimbell Royalty Operating, LLC. Kimbell is
entitled to the cash flow from production attributable to the
Acquisition beginning on and after October
1, 2019. Revenues and certain other operating
statistics under generally accepted accounting principles ("GAAP")
will be recorded for the Acquisition beginning on the closing date
of April 17, 2020. As of
March 31, 2020, the acreage acquired
in the Acquisition had over 90 operators on 2,160 net royalty acres
across core areas of the Delaware
Basin, DJ Basin, Haynesville, STACK, Eagle Ford and other leading
basins. In addition, for Q1 2020, Kimbell estimates that the
Springbok assets produced 2,586 Boe/d (56% natural gas, 34% oil and
10% natural gas liquids) (6:1), an organic production growth
increase of 2% from October 1,
2019.
"Our thoughts and prayers go out to those affected by the
COVID-19 crisis. We will continue to do what we can to
support the recovery of our community from this crisis. We
are especially grateful for all of the hard work being performed by
first responders and healthcare workers. They are truly an
inspiration to us all," commented Robert
Ravnaas, Chairman and Chief Executive Officer of Kimbell's
general partner.
"The company entered this crisis in a strong position with
significant momentum and we believe that this is an excellent
strategic acquisition with highly complementary acreage that we
expect will add significant cash flow and the opportunity for
growth. These assets complement our broad and diversified
mineral and royalty portfolio and we are excited to significantly
increase our position in the Delaware Basin, which has one of the lowest
break-even costs across any basin in the U.S. Specifically,
in the Delaware Basin, we believe
we have acquired the right balance of existing producing wells and
future drilling locations as well as high quality operators.
We believe that Kimbell offers a unique investment opportunity with
growth opportunities and a robust distribution yield, which we
expect to be substantially tax-free through 2023 and instead to be
considered a return of capital to the extent of a unitholder's
basis in its common units. We remain focused on executing our
business plan and creating long-term value for our unitholders,"
concluded Robert Ravnaas.
Forward-Looking Statements
This news release includes forward-looking statements, in
particular statements relating to the benefits of the Acquisition,
Kimbell's future operating and production results and prospects for
growth, the tax treatment of Kimbell's distributions and the recent
COVID-19 outbreak. These and other forward-looking statements
involve risks and uncertainties, including risks that the
anticipated benefits of the Acquisition are not realized, risks
relating to Kimbell's integration of the Acquisition assets and
uncertainties relating to Kimbell's business, prospects for growth
and acquisitions and the securities markets generally, as well as
risks inherent in oil and natural gas drilling and production
activities, including risks with respect to low or declining prices
for oil and natural gas that could result in downward revisions to
the value of proved reserves or otherwise cause operators to delay
or suspend planned drilling and completion operations or reduce
production levels, which would adversely impact cash flow, risks
related to the impact of COVID-19 on the global economy and
Kimbell's business, risks relating to the impairment of oil and
natural gas properties, risks relating to the availability of
capital to fund drilling operations that can be adversely affected
by adverse drilling results, production declines and declines in
oil and natural gas prices, risks relating to Kimbell's
ability to meet financial covenants under its credit agreement or
its ability to obtain amendments or waivers to effect such
compliance, risks relating to Kimbell's hedging activities,
risks of fire, explosion, blowouts, pipe failure, casing
collapse, unusual or unexpected formation pressures, environmental
hazards, and other operating and production risks, which may
temporarily or permanently reduce production or cause initial
production or test results to not be indicative of future well
performance or delay the timing of sales or completion of drilling
operations, risks relating to delays in receipt of drilling
permits, risks relating to unexpected adverse developments in the
status of properties, risks relating to borrowing base
redeterminations by Kimbell's lenders, risks relating to the
absence or delay in receipt of government approvals or third-party
consents, risks relating to acquisitions, dispositions and drop
downs of assets, risks relating to Kimbell's ability to realize the
anticipated benefits from and to integrate acquired assets,
including the assets acquired in the Acquisition, risks relating to
tax matters, and other risks described in Kimbell's Annual Report
on Form 10-K and other filings with the Securities and Exchange
Commission (the "SEC"), available at the SEC's website at
www.sec.gov. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
news release. Except as required by law, Kimbell undertakes no
obligation and does not intend to update these forward-looking
statements to reflect events or circumstances occurring after this
news release. When considering these forward-looking statements,
you should keep in mind the risk factors and other cautionary
statements in Kimbell's filings with the SEC.
About Kimbell Royalty Partners
Kimbell (NYSE: KRP) is a leading oil and gas mineral and royalty
company based in Fort Worth,
Texas. Kimbell owns mineral and royalty interests in over 13
million gross acres in 28 states and in every major onshore basin
in the continental United States,
including ownership in more than 96,000 gross producing wells with
over 40,000 wells in the Permian Basin. To learn more, visit
kimbellrp.com.
Contact:
Rick Black
Dennard Lascar Investor
Relations
krp@dennardlascar.com
(713) 529-6600
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SOURCE Kimbell Royalty Partners, LP