LandBridge has announced a purchase and sale agreement to acquire approximately 46,000 surface acres in the Southern Delaware Basin, known as Wolf Bone Ranch, from a subsidiary of VTX Energy Partners, a Vitol investment.
The acquisition, valued at $245m in cash, is subject to customary purchase price adjustments and closing conditions.
Wolf Bone Ranch is strategically located adjacent to LandBridge’s existing acreage in Reeves County, Texas. It is positioned at a key intersection for oil and natural gas exploration and transportation, with access to the Waha Gas market hub.
The land supports produced water operations, with current volumes of approximately 300,000 barrels per day serviced by VTX Energy's infrastructure.
Additionally, assets owned and managed by WaterBridge Operating, an affiliate of LandBridge, contribute to these operations. VTX Energy has committed to a minimum annual revenue of $25m to LandBridge for the next five years as part of the agreement.
LandBridge CEO Jason Long said: “This acquisition demonstrates our continued commitment to our active land management strategy across the Delaware Basin, and we see significant opportunities for a broad range of industrial development and revenue growth on the Wolf Bone Ranch.
“These opportunities include commercial real estate opportunities along the over seven miles of Highway 285 frontage and potential digital infrastructure and renewable energy projects.”
LandBridge plans to fund the acquisition with proceeds from a private placement and borrowings under its debt facilities.
The company has entered into agreements to issue 5,830,419 Class A shares at $60.03 per share in a private placement to select institutional and accredited investors.
Approximately $200m generated from the private placement proceeds will fund the acquisition, while the remainder will be used to redeem or repurchase units in DBR Land Holdings. These securities are not registered under the Securities Act of 1933 and may not be offered or sold in the US without registration or an exemption.
The closing of the private placement is contingent upon the acquisition's closing, expected in the fourth quarter of 2024.
However, the acquisition is not dependent on the private placement's closing. Goldman Sachs is the lead placement agent, with Barclays Capital also acting as a placement agent.
Goldman Sachs and Barclays Capital have agreed to waive lock-up restrictions to facilitate the private placement and the redemption process.
