Elk Range Royalties has acquired mineral and royalty position of approximately 250,000 net royalty acres in the Denver-Julesburg (DJ) Basin, US, from Occidental affiliates.
This transaction, worth $905m, is part of Elk Range’s strategy to acquire royalty assets in key basins.
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The newly acquired assets are being developed by operators such as Chevron and Civitas, which together account for more than half of the wells spud last year, stated Elk Range Royalties.
The DJ Basin is a large geological region in north-eastern Colorado and south-eastern Wyoming, stretching into parts of Nebraska, South Dakota and Kansas.
This deal features a combination of current production, near-term activity via drilled but uncompleted wells and long-term growth potential from undeveloped reserves, stated Elk Range.
Elk Range Royalties CEO Charlie Shufeldt said: “This deal marks a milestone achievement for our team demonstrating our ability to underwrite and close on large assets. We remain committed to expanding our portfolio with high-quality royalty assets in proven basins.
“The DJ Basin presents some of the best operator economics in the US, and this acquisition positions us to capitalise on both near-term cash flow and long-term development potential.”
Through this transaction, Elk Range maintains its acquisition momentum, having invested more than $1.2bn in capital since its launch in 2020. The company also stated that it continues to focus on further minerals and royalty acquisition opportunities.
Legal counsel for Elk Range was provided by Gibson, Dunn & Crutcher, Kirkland & Ellis, and Holland & Knight.
JPMorgan Bank served as lead arranger on the new credit facilities, and Texas Capital was lead arranger on the upsize of the Elk Range Royalties II credit facility.
Wells Fargo and CIBC Capital Markets acted as financial advisors, while White & Case provided legal counsel to Occidental.
Last month, NGP and the Elk Range team set up Elk Range Royalties III.
In January, Elk Range Royalties announced it had acquired Newton Financial, Concord Oil Company and Mission Oil Company, which together held large mineral and royalty interests in the Permian and Eagle Ford basins.
The deal covered roughly 13,500 net royalty acres in top oil and gas-producing areas of Texas.
The acquisition included around 4,500 net royalty acres in the prolific Permian Basin, 3,000 acres in the Eagle Ford and other assets across Texas.
This deal includes approximately 13,500 net royalty acres in Texas, with 4,500 in the Permian Basin and 3,000 in the Eagle Ford.
