Kimbell Royalty Partners, LP, a major player in mining and oil royalty interests in the United States, has announced a strategic $231 million acquisition in the Midland Basin, Texas. The transaction, involving mining interests under the Mabee Ranch, includes assets concentrated in Martin County (63%) and Andrews County (37%), covering more than 68,000 gross acres.
The transaction, partially financed through cash and participation units, is expected to increase Kimbell’s daily production by 8%, with an average forecast of 1,842 barrels of oil equivalent per day (Boe/d) in 2025. This growth is accompanied by a 7% reduction in administrative costs per barrel.
Enhanced production and inventory
The acquired assets include approximately 875 producing wells operated by leading companies such as ConocoPhillips, Diamondback Energy, and ExxonMobil. With an estimated daily production of 1,842 Boe/d, these wells offer sustained development potential supported by superior rock quality and strong drilling activity.
Kimbell also adds 1.22 net drilled but uncompleted wells (DUCs) and 6.06 net undrilled locations, increasing its strategic inventory in the Permian Basin by 19%. Proven reserves are estimated at 11.5 million barrels of oil equivalent, with an acquisition cost of approximately $20.13 per proven barrel.
Economic and operational outlook
The transaction aligns with Kimbell’s strategy to consolidate its position as a leader in oil and gas royalties. With an estimated financial leverage of 1.0x after the transaction, the company maintains a prudent approach to its balance sheet while strengthening its distributable cash flows per unit.
The addition of these assets will also support long-term stable production through contractual clauses ensuring continuous development. Two drilling rigs are already active on the acquired properties, providing visibility into future development.
Consolidating the sector
Through this acquisition, Kimbell enhances its presence in the Permian Basin, which remains the primary contributor to its production and inventory. The acquired assets represent approximately 16% of the active land rigs in the United States, consolidating the company’s position in a transforming sector.
