PRNewswire – Natural Resource Partners L.P. today reported that it has signed a definitive agreement to acquire non-operated working interests in oil and gas properties located in the Bakken/Three Forks play of the WillistonBasin from an affiliate of Kaiser-Francis Oil Company for $340 million, subject to customary purchase price adjustments. The assets, located in the Sanish Field in Mountrail County, North Dakota, are all held by production and operated by Whiting Petroleum Corporation. The transaction, which is subject to customary closing conditions, will have an effective date of October 1, 2014 and is expected to close in November 2014. The acquisition is expected to be immediately accretive to NRP’s distributable cash flow and is expected to generate $58 million to $60 million of EBITDA in 2015.
In connection with the acquisition agreement, NRP received a firm commitment from Wells Fargo Bank, National Association to underwrite an expansion of the borrowing base in NRP’s existing oil and gas credit facility to $150 million. NRP anticipates using borrowings under the credit facility, together with proceeds from equity and debt offerings, to fund the transaction. Upon closing, the Partnership intends to hedge approximately 80% of the acquired current production volumes through 2016, with a small percentage of that production to be hedged for 2017 and 2018. NRP will opportunistically seek to hedge additional volumes beyond 2016 as the market provides favorable opportunities.
“Together with our existing interests in the Williston Basin, these assets give NRP extensive exposure to one of the premier oil plays in the United States,” said Wyatt Hogan, President of Natural Resource Partners. “This acquisition represents another significant step in our efforts to diversify NRP, and we anticipate that we will derive approximately 25% of our 2015 EBITDA from oil and gas. Further, we believe that the combination of our oil and gas interests, soda ash business, our recently acquired VantaCore aggregates operations and our other non-coal assets will contribute approximately 50% of our EBITDA in 2015 and position NRP as a truly diversified natural resource company.”
Below are a few details regarding the assets to be acquired:
- Estimated average current production of approximately 3,100 Boe/d
- Includes 186 producing wells and 10 wells in various stages of development
- Approximately 5,700 net acres, all held by production
- Average working interest of approximately 15%
- 100% operated by Whiting Petroleum
Evercore Group L.L.C. acted as exclusive financial advisor to NRP and Tudor, Pickering, Holt & Co. acted as exclusive financial advisor to Kaiser-Francis Oil Company with respect to the transaction.
Updated 2014 Guidance Including the Acquisitions
As a result of this transaction and the acquisition of VantaCore Partners, NRP updates its guidance for 2014 to $370 million to $390 million in total revenues and distributable cash flow of $205 million to $230 million. These amounts reflect a full quarter of ownership of VantaCore and ownership of the Kaiser-Francis assets following the expected closing date in mid-November.
Company Profile
Natural Resource Partners L.P. (“NRP”) is a master limited partnership headquartered inHouston, TX. NRP is a diversified natural resource company that owns interests in oil and gas, coal, aggregates and industrial minerals across the United States. A large percentage of NRP’s revenues are generated from royalties and other passive income. In addition, NRP owns an equity investment in OCI Wyoming, a trona/soda ash operation, owns non-operated working interests in oil and gas properties and owns VantaCore, making NRP ranked as one of the top 25 aggregates producers in the United States.
For additional information, please contact Kathy H. Roberts at 713-751-7555 orkroberts@nrplp.com. Further information about NRP is available on the partnership’s website at http://www.nrplp.com.
