The Wolf Bone Ranch is strategically located adjacent to LandBridge's existing surface acreage in Reeves County, Texas. (Source: Shutterstock)
LandBridge Co. is expanding its operations in the Southern Delaware Basin by acquiring approximately 46,000 largely contiguous surface acres in the Wolf Bone Ranch for $245 million in cash, according to a Nov. 19 press release.
The seller is a subsidiary of VTX Energy Partners, which is backed by Vitol. Under the deal, VTX has agreed to a minimum annual revenue commitment to LandBridge of $25 million for the next five years.
The Wolf Bone Ranch is strategically located adjacent to LandBridge's existing surface acreage in Reeves County, Texas, providing LandBridge access to the Waha Gas market hub, Houston-based LandBridge said.
The acquired land also supports produced water operations with current water volumes on the property of approximately 300,000 bbl/d. The produced water operations are serviced by infrastructure owned and operated by VTX Energy, as well as assets owned and managed by WaterBridge Operating.
The deal follows LandBridge closing its acquisition of East Stateline Ranch, Speed Ranch and Lea County Ranches in August after raising $367 million to IPO in June.
LandBridge expects to fund the Wolf Bone Ranch transaction with a portion of the net proceeds from its private placement, also announced Nov. 19, and borrowings under its debt facilities.
Under the private placement, LandBridge plans to issue 5,830,419 Class A shares at $60.03 per share. The company expects to use approximately $200 million of the net proceeds from the private placement to partially fund the acquisition.
The remaining proceeds will be used for a redemption of units representing membership interests in DBR Land Holdings LLC, held by LandBridge Holdings LLC, an affiliate of Five Point Energy.
This redemption will also involve cancelling a corresponding number of LandBridge's Class B shares.
The acquisition and the private placement are expected to close in fourth- quarter 2024.
Goldman Sachs & Co. is acting as the lead placement agent, and Barclays Capital Inc. is acting as a placement agent, in connection with the private placement.
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