Jan 12 (Reuters) – Desert Peak Minerals, an owner of mineral rights and royalties, said on Wednesday it would merge with rival Falcon Minerals to go public in a deal valuing the combined company at $1.9 billion.
The merger comes at a time when oil prices have climbed to multi-year highs, spurred by a rebound in fuel demand and supply disruptions. Brent crude was trading at around $84 a barrel on Wednesday.
Desert Peak, set up by energy-focused hedge fund Kimmeridge Energy Partners, buys and manages oil and gas minerals and royalty interests in the Permian basin of Texas and New Mexico.
Holders of mineral rights, like Desert Peak and Falcon, generally lease the properties to oil and gas producers for drilling and daily activities, in turn receiving a share of the income, or royalty, generated from the sale of the resources.
Desert Peak and Falcon will together own more than 139,000 net royalty acres in the Permian basin with expected production of around 13,500 to 14,500 barrels of oil equivalent per day in the first half of this year.
Desert Peak, which had filed for an initial public offering last year but reportedly postponed the plan in November, will own 73% of the combined company and Falcon will own the rest.
The deal is expected to add to Falcon's cash flow on a per share basis in 2022.
Our Standards: The Thomson Reuters Trust Principles.
Subscribe to our newsletter to get all the news you need to start your day.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2022 Reuters. All rights reserved