Natural Resource Partners L.P.
) announced that it has an inked an agreement to buy a
non-operated stake in oil and gas assets located in the
Bakken/Three Forks formation from
Abraxas Petroleum Corp
The partnership will shell out $35.3 million in cash for this
acquisition. The agreement will be concluded in the third quarter
2013 and is subject to customary closing conditions as well as
purchase price adjustments.
The Bakken play is placed in the Williston Basin located in
the states of North Dakota and Montana. The asset purchase will
have an effective date of Mar 1, 2013. With this strategic deal,
the partnership will gain entrance into the resource-rich Bakken
Per the agreement, Natural Resource will purchase roughly
13,500 acres of productive area which translates to an estimated
11% working interest in the play. This consists of around 120
producing wells and also interests from a supplementary 22 wells,
currently in various phases of development.
The partnership intends to make additional investment of $8.1
million for the development of these wells in 2013, a part of
which will be paid during the close of the agreement. Natural
Resource expects the deal to be immediately accretive to its unit
The latest acquisition by Natural Resource Partners will
diversify the partnership's revenue stream and lend constancy to
growth. Of late, the partnership has been venturing into
unconventional resource plays to broaden its resource portfolio.
In early 2013, it procured a 48.51% interest in OCI Wyoming
L.P.'s Trona ore mining and soda ash units which will prove
profitable for the partnership given the rising demand in
Royalties from oil and gas properties steadily increased to 3%
in 2012 from 2% in 2005. The current interest purchase in
the Bakken play will further support Natural Resource to achieve
its revenue target range of $330 million to $375 million in
2013.The partnership also stands to benefit significantly from
the shale gas boom in the U.S. market.
However, transportation cost pressure might act as a deterrent
to the partnership's opportunities. Currently, Natural Resource
retains a Zacks Rank #3 (Hold).
Other industry players presently positioned well are Zacks
Ranked #2 (Buy)
Alliance Holdings GP, LP
Alliance Resource Partners LP
Headquartered in Houston, Texas, Natural Resource along with
its subsidiaries engages in the ownership, management, and
leasing of mineral properties in the United States.
ALLIANCE HLDGS (AHGP): Free Stock Analysis
ALLIANCE RES (ARLP): Free Stock Analysis
ABRAXAS PETE/NV (AXAS): Free Stock Analysis
NATURAL RSRC LP (NRP): Free Stock Analysis
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