Elk Range Royalties LP closed its acquisition of Permian Basin mineral and royalty interests from Tower Rock Oil and Gas and affiliates. The purchase price wasn’t disclosed in a Feb. 1 press release.
Elk Range’s newly acquired acquisition includes over 2,300 net royalty acres and 2,600 gross producing horizontal wells, as well as 6,000 gross undeveloped locations across the Delaware and Midland basins. Cash flow in the past twelve months was approximately $3.7 million, and the operators of the area are Pioneer Natural Resources, Endeavor Energy Resources and Permian Resources.
Elk Range funded the acquisition through its equity commitment from NGP Royalty Partners LP, the energy-royalty fund of private equity firm NGP. The company also used a credit facility from Texas Capital Bank. NGP Royalty Partners II LP has made a new equity commitment to to Elk Range Royalties II LP, and the company plans to begin investing immediately.
The acquisition allows Elk Range to close out the Elk Range Royalties LP commitment with an acquisition that has existing cash flow and future development opportunities, said Elk Range CEO Charlie Shufeldt. .
Tower Rock is in the early stages of raising and investing its fourth fund.
"Our excitement about this divestiture is multi-faceted as we worked hard to put together a portfolio of first-rate assets,” said Oscar Torres, CEO and co-founder of Tower Rock, in the press release. “This partial exit provides generous distributions to our fund investors and fresh capital to deploy into high quality mineral investments in our new fourth fund.”
The acquisition adds to Elk Range’s portfolio of net royalty acres with an interest in over 8,000 horizontal wells in the Permian, Uinta, Anadarko, Eagle Ford, Haynesville and DJ basins.
Tower Rock is a ten-year-old private oil and gas mineral and royalty acquisition company in Austin, Texas.
NGP is a private equity firm that backs energy companies involved in natural resources and energy transition.