Elk Range Royalties LP recently acquired roughly 2,600 core net royalty acres evenly split between the Delaware and Midland basins, marking its largest acquisition to date in the Permian Basin.

“We are excited to acquire a core Permian Basin royalty package in a very active market environment,” Elk Range President Charlie Shufeldt commented in a company release on Oct. 6.

Shufeldt co-founded Elk Range Royalties in early 2020 alongside Vice President Clinton Koerth “to fill a need they saw in the market for producing minerals and royalties,” according to the Dallas-based company’s website.

Prior to forming Elk Range, Shufeldt was a co-founder and managing director of IOG Capital LP and president of IOG Resources LLC. During his time with IOG, the company was a pioneer in structuring DrillCo transactions, deploying over $800 million in capital across more than 500 wells since 2015.

Elk Range is backed by NGP Royalty Partners LP, the energy-royalty fund of private equity firm NGP. According to a report by the Wall Street Journal in August, the Dallas-based firm has deployed around half of the $320 million it raised for NGP Royalty Partners, which closed below a $500 million target in May.

On Oct. 6, Elk Range said it had acquired certain Permian Basin royalty interests from an undisclosed seller primarily located in New Mexico’s Lea County and Loving, Reeves, Upton and Midland counties, Texas.

The last 12-month cash flow on the acquired assets was $10.8 million. Additionally, the acquisition includes approximately 250 producing horizontal wells and over 650 remaining undeveloped locations plus top operator exposure to Devon Energy, Pioneer Natural Resources and Endeavor Energy Resources.

“The blend of existing cash flow and line of sight to near-term development make this position ideal for Elk Range and the NGP Royalty Partners,” Shufeldt added in the release.

Elk Range currently manages a portfolio consisting of more than 30,000 net royalty acres with an interest in over 5,000 horizontal wells across the Permian, Anadarko, Haynesville and Denver-Julesburg basins.

The terms of the transaction on Oct. 6 were not disclosed, however, Elk Range said in the release it funded the acquisition through a combination of its equity commitment from NGP Royalty Partners and its credit facility with Texas Capital Bank.

Kirkland & Ellis served as legal counsel for Elk Range on the transaction.

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