- Acreage offers existing cash flows and significant future revenue growth opportunities
- Increases LandBridge holdings to ~272,000 surface acres including previously announced transactions
- Concurrent private placement to partially fund transaction
LandBridge has entered into a purchase and sale agreement to acquire approx. 46,000 largely contiguous surface acres in the Southern Delaware Basin known as the Wolf Bone Ranch for total consideration of $245 million in cash from a subsidiary of VTX Energy Partners, a Vitol investment, subject to customary purchase price adjustments and closing conditions.
Located adjacent to LandBridge’s existing surface acreage in Reeves County, Texas, the Wolf Bone Ranch is well-positioned at a strategic intersection of oil and natural gas exploration and transportation, with access to the Waha Gas market hub. The land also supports produced water operations, with current volumes of approximately 300 MBbls/d serviced by infrastructure owned and operated by VTX Energy, as well as assets owned and managed by WaterBridge Operating LLC, an affiliate of LandBridge and a leading water midstream platform. Pursuant to the Agreement, VTX Energy has agreed to a minimum annual revenue commitment to LandBridge of $25 million for the next five years.
'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,' said Jason Long, Chief Executive Officer of LandBridge.
LandBridge expects to fund the purchase price of the Acquisition with a portion of the net proceeds from a the Private Placement (as defined below) and borrowings under its debt facilities.
LandBridge also today announced that it has entered into agreements to issue 5,830,419 Class A shares representing limited liability company interests, at a price of $60.03 per Class A share, in a private placement to select institutional and accredited investors constituting a group of both new and existing shareholders (the 'Private Placement'). LandBridge expects to use approximately $200 million of the net proceeds from the Private Placement to partially fund the Acquisition, with the balance of such net proceeds being used to redeem or repurchase (the 'Redemption') units representing membership interests in DBR Land Holdings LLC (along with the cancellation of a corresponding number of Class B shares representing limited liability company interests of LandBridge) that are held by LandBridge Holdings LLC, an affiliate of Five Point Energy. The securities offered in the Private Placement have not been registered under the Securities Act of 1933, as amended (the 'Securities Act'), or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from, or a transaction not subject to, the registration requirements of the Securities Act and applicable state laws.
The closing of the Private Placement is conditioned upon, and subject to, the closing of the Acquisition; however, the Acquisition is not conditioned upon, or subject to, the closing of the Private Placement. The closing of both the Acquisition and the Private Placement is expected to take place in the fourth quarter of 2024.
Goldman Sachs is acting as the lead placement agent, and Barclays Capital is acting as a placement agent, in connection with the Private Placement.
In order to facilitate the Private Placement, Goldman Sachs and Barclays Capital in their capacities as representatives of the several underwriters of LandBridge’s recent initial public offering, have agreed to waive the lock-up restrictions with respect to the securities offered by LandBridge pursuant to the Private Placement and the securities to be redeemed or repurchased pursuant to the Redemption.
Additional information regarding the details of the Acquisition can be found on the Investors section of LandBridge’s website at https://ir.landbridgeco.com/overview/default.aspx.
Source: Landbridge
