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A Tulsa coal company recently disclosed it has been buying minerals interests in the Permian Basin in the third and fourth quarters as it expands on earlier acquisitions made in 2019.
Alliance Resource Partners LP reported in November it had closed two transactions totaling $94.5 million to acquire an additional 4,322 net oil and gas royalty acres in the Permian Basin, according to Securities and Exchange Commission (SEC) regulatory filings.
On Oct. 26, Alliance Resource acquired approximately 3,928 oil and gas net royalty acres in the Midland and Delaware basins from Jase Minerals LP for $81.2 million. The transaction was funded with cash on hand.
Alliance Resource said that it accounted for the transaction as a business combination because the acquisition included developed and undeveloped properties.
And on Sept. 2, subsidiary Alliance Royalty LLC acquired approximately 394 net oil and gas royalty acres in the Delaware Basin from Belvedere Operating LLC for $11.4 million cash, which was funded with cash on hand. The transaction was also accounted for as a business combination.
Alliance Resource said the acquisition gives the company exposure to a prolific area of the Delaware Basin that is close to reserves it already owns.
Belvedere Acquisition Highlights
|
Interest type |
Value ($MM) |
|
Mineral interests in proved properties |
$7.72 |
|
Mineral interests in unproved properties |
$3.67 |
|
Total |
$11.39 |
Alliance Resource previously closed two deals in 2019, including a $175.96 deal to acquire interests in the Bakken, SCOOP/ STACK, Delaware, Midland and Appalachian basins. In a separate deal, Alliance Resource purchases assets in the Permian from private-equity backed Wing Resources LLC for $145 million.
Despite being the largest coal producer in the eastern U.S., the company has diversified into several areas including minerals and royalty ownership.
In October, Alliance chairman, president and CEO Joseph W. Craft III said the company owned interests in approximately 57,000 net royalty acres in a portfolio that includes the Permian, Anadarko and Williston basins.
“We market our oil & gas mineral interests for lease to operators in those regions and generate royalty income from the leasing and development of those mineral interests,” Craft said.
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