Alliance Resource Partners, L.P., the big coal company based in Tulsa, Oklahoma announced it’s finalized its $176 million acquisition of partnership interests in AllDale Minerals LP and AllDale Minerals II LP. It’s part of Alliance’s move into the oil and gas industry and one that gives the company control of nearly 42,000 net royalty acres in oil and gas resource plays.
“Closing of the AllDale transaction provides ARLP with significant ownership of attractive oil and gas mineral interests,” said Joseph W. Craft III, President and Chief Executive Officer. “This transaction lays the foundation for a new growth platform for ARLP. The royalty income generated by these mineral interests is expected to be immediately accretive to ARLP’s cash flow in 2019 and we anticipate a growing royalty stream that will provide long-term future value to ARLP unitholders.”
ARLP acquired the AllDale general partner interests and all of the limited partner interests in AllDale not currently owned by ARLP’s affiliate, Cavalier Minerals JV, LLC (collectively the “Partnership Interests”). Based on the purchase price paid for the Partnership Interests, ARLP will record in the 2019 first quarter a non-cash gain in a range of $145.0 million to $155.0 million to reflect the fair value of its previous investments in the AllDale partnerships.
The AllDale acreage now controlled by ARLP is strategically positioned in the core of the Anadarko, Permian, Williston and Appalachian basins and is concentrated in the SCOOP/STACK, Delaware Basin, Midland Basin, Bakken and Marcellus/Utica.
ARLP’s acreage is being actively developed by industry-leading operators, including Continental Resources, Devon Energy, Anadarko Petroleum, Pioneer Natural Resources and Concho Resources. There are currently 3,821 gross producing wells generating production net to ARLP’s interest of approximately 2,611 barrels of oil equivalent per day. In addition, there are 495 wells currently being drilled on ARLP’s acreage and another 860 permitted well locations.
ARLP also owns approximately 4,000 net royalty acres through its limited partner interest in AllDale Minerals III, L.P.