Tulsa-based Alliance Resource Partners, L.P. is expanding its mineral interests nationally and entering the oil and gas industry with a $176 million acquisition of a Texas company.
The company has entered into an agreement to acquire the general partner interests in AllDale Minerals, LP and AllDale Minerals II, LP based in Dallas, Texas in the amount of $175.96 million. The acquisition is funded with cash on hand and borrowings under Alliance’s credit facility. Alliance is also acquiring all of the limited partner interests in AllDale not currently owned by ARLP’s affiliate, Cavalier Minerals JV, LLC.
The agreements provide for an effective date of November 1, 2018 and the transaction is to be finalized in early January 2019.
“The AllDale Acquisition gives ARLP control of a significant ownership position in the oil and gas minerals sector and lays the foundation for a new growth platform for the future,” said Joseph W. Craft III, President and Chief Executive Officer. “Today’s announcement reflect ARLP’s commitment to continually invest in our business to build and support long-term cash flows.”
Alliance already owns a 96% interest in Cavalier which owns nearly 72% of the limited partner interest in AllDale. Upon closing Alliance will own 100% of the general partner and nearly 97% of the limited partner interests in AllDale. The purchase gives Alliance control of nearly 42,000 net royalty acres positioned in the core of the Anadarko, Permian, Williston and Appalachian basins.
The company said 48% of the acquired acreage is in Oklahoma’s STACK and SCOOP while 19.5% is in the Delaware Basin, 16.2% in the Midland Basin, 9.7% in the Bakken and 6.1% in the Appalachian Basin.
Alliance said the acquired acreage position will provide the firm with diversified exposure to industry-leading operators including Continental Resources, Devon Energy, Anadarko Petroleum, Pioneer Resources and Concho Resources..
“Today’s announcements reflect ARLP’s commitment to continually invest in our business to build and support long-term cash flows,” said Joseph W. Craft III, President and Chief Executive Officer. “The AllDale acquisition gives ARLP control of a significant ownership position in the oil and gas minerals sector and lays the foundation for a new growth platform for the future.
At the same time, Alliance announced the start of development of the Excel Mine No.5 which is an extension of its MC Mining operation in Pike County, Kentucky. The mine contains what Alliance called a “highly-valued low sulfur high BTU product.”