Desert Peak Minerals, Falcon Minerals to combine in $1.9 bln deal (updated)

Sitio Royalties

12/01/2022 13:25

(Adds details from release, background)
    Jan 12 (Reuters) - Desert Peak Minerals, an owner of mineral
rights and royalties, said on Wednesday it would merge with
rival Falcon Minerals  FMLN.O  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  LCOc1  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.
    


 (Reporting by Rithika Krishna in Bengaluru; Editing by Aditya
Soni)
 ((Rithika.Krishna@thomsonreuters.com; Twitter: https://twitter.com/rithika_krishna;))