Natural Resource Partners LP (NYSE: NRP) has signed a definitive agreement to acquire non-operated working interests in oil and gas properties located in the Bakken/Three Forks play of the Williston Basin from an affiliate of Kaiser-Francis Oil Co. for $340 million.
The assets, located in the Sanish Field in Mountrail County, North Dakota, are all held by production and operated by Whiting Petroleum Corp. The transaction will have an effective date of Oct. 1 and is expected to close in November.
Evercore Group LLC acted as exclusive financial advisor to NRP; and Tudor, Pickering, Holt & Co. acted as exclusive financial advisor to Kaiser-Francis Oil Co. with respect to the transaction.
In connection with the acquisition agreement, NRP received a firm commitment from Wells Fargo Bank, National Association to underwrite an expansion of the borrowing base in NRP's existing oil and gas credit facility to $150 million. NRP anticipates using borrowings under the credit facility, together with proceeds from equity and debt offerings, to fund the transaction.
Upon closing, the Partnership intends to hedge approximately 80% of the acquired current production volumes through 2016, with a small percentage of that production to be hedged for 2017 and 2018. NRP will opportunistically seek to hedge additional volumes beyond 2016 as the market provides favorable opportunities.