LandBridge Expands: Acquiring 46,000 Surface Acres in the Southern Delaware Basin
Tuesday, Nov 19, 2024 8:17 am ET
3min read LandBridge Company LLC (NYSE: LB) has announced an agreement to acquire the Wolf Bone Ranch, comprising 46,000 surface acres in the Southern Delaware Basin, for $245 million in cash from VTX Energy Partners. The acquisition includes land with existing produced water operations processing 300 MBbls/d and features a $25 million minimum annual revenue commitment from VTX Energy for five years. The transaction will be partially funded through a private placement of 5,830,419 Class A shares at $60.03 per share. The acquisition and private placement are expected to close in Q4 2024, increasing LandBridge's total holdings to approximately 272,000 surface acres.
This strategic acquisition aligns with LandBridge's mission to actively manage its land and resources to support and encourage oil and natural gas development and other land uses that generate long-term revenue and Free Cash Flow. The existing produced water operations can be integrated into LandBridge's infrastructure development plans, potentially generating additional revenue streams and enhancing the company's value. The $25 million annual revenue commitment from VTX Energy for five years ensures a steady cash flow, reducing the risk associated with the acquisition and contributing to LandBridge's financial stability and growth.
The 46,000 surface acres in the Southern Delaware Basin, including seven miles of Highway 285 frontage, present significant commercial development opportunities. This strategic location, along the state border, offers access to a high concentration of hydrocarbons and growing drilling and completion activity. With the increasing demand for infrastructure to support energy development, data centers, and non-hazardous oilfield reclamation facilities, the acquired land could generate additional revenues for LandBridge. The company's collaborative commercial approach with a diversified customer base, along with its reciprocal crossing rights and produced water royalty agreements with Texas Pacific Land Company, further enhances its potential to capture and monetize commercial activity on and near its land.
In conclusion, LandBridge's acquisition of the Wolf Bone Ranch is a strategic move that supports the company's mission to actively manage its land and resources for long-term revenue and Free Cash Flow. The existing produced water operations, the $25 million annual revenue commitment, and the commercial development opportunities along the Highway 285 frontage all contribute to LandBridge's growth and financial stability. As the company continues to expand its land position in the heart of the Delaware Basin, investors can expect LandBridge to remain a strong player in the oil and gas industry, driving innovation and economic success.
This strategic acquisition aligns with LandBridge's mission to actively manage its land and resources to support and encourage oil and natural gas development and other land uses that generate long-term revenue and Free Cash Flow. The existing produced water operations can be integrated into LandBridge's infrastructure development plans, potentially generating additional revenue streams and enhancing the company's value. The $25 million annual revenue commitment from VTX Energy for five years ensures a steady cash flow, reducing the risk associated with the acquisition and contributing to LandBridge's financial stability and growth.
The 46,000 surface acres in the Southern Delaware Basin, including seven miles of Highway 285 frontage, present significant commercial development opportunities. This strategic location, along the state border, offers access to a high concentration of hydrocarbons and growing drilling and completion activity. With the increasing demand for infrastructure to support energy development, data centers, and non-hazardous oilfield reclamation facilities, the acquired land could generate additional revenues for LandBridge. The company's collaborative commercial approach with a diversified customer base, along with its reciprocal crossing rights and produced water royalty agreements with Texas Pacific Land Company, further enhances its potential to capture and monetize commercial activity on and near its land.
In conclusion, LandBridge's acquisition of the Wolf Bone Ranch is a strategic move that supports the company's mission to actively manage its land and resources for long-term revenue and Free Cash Flow. The existing produced water operations, the $25 million annual revenue commitment, and the commercial development opportunities along the Highway 285 frontage all contribute to LandBridge's growth and financial stability. As the company continues to expand its land position in the heart of the Delaware Basin, investors can expect LandBridge to remain a strong player in the oil and gas industry, driving innovation and economic success.
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