Canadian company Freehold Royalties has signed deals to acquire “high quality” mining titles and royalty assets in the United States from two undisclosed “private sellers” for C$155 million ($119.5 million ).
Under these agreements, Freehold Royalties will acquire C$123 million of assets located in the Midland Basin, primarily in Howard County, Texas, as well as C$32 million of assets located in the Midland Basin. ‘Eagle Ford in Texas.
In a separate transaction, Freehold recently acquired mining claims and royalty assets in the Midland Basin from an undisclosed company for $19 million.
With the acquisitions in the United States, Freehold expects its landholdings in the North American country to increase by approximately 147,000 gross acres and 8,000 net royalty acres, and add production volumes of nearly 1,100 barrels of oil equivalent per day (boepd).
In a press release, Freehold said, “The U.S. acquisitions enhance the quality of Freehold’s North American royalty portfolio by further strengthening our price base realized by our peers, building on the growth platform of the production we have established in the Permian Basin and continuing to position our portfolio in the highest quality oil and gas development plays in North America.
The Howard County Midland assets covered by the transaction include a concentrated mining title and royalty land position in the heart of the Midland Basin, primarily in Howard County, on 51,000 gross acres.
In the fourth quarter of 2022, these assets should have an average production rate of 550boepd, and 750boepd in 2023.
This transaction is subject to customary confirmatory due diligence and potential adjustments for any defects in title, and is expected to close next month.
Freehold will purchase Eagle Ford’s assets, which include concentrated mining titles and royalty land positions in the heart of Eagle Ford, on 41,000 gross acres.
The assets are estimated to have an average production rate of 210boepd (78% liquids) in Q4 2022 and 250boepd (76% liquids) in 2023.
Subject to customary confirmatory due diligence and potential adjustments for any title defects, the deal is expected to close in mid-September 2022.