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Viper Energy to buy mineral, royalty interests in $150M all-equity deal

Viper Energy Partners LP agreed to purchase certain mineral and royalty interests in Texas from private equity-backed Santa Elena Minerals LP in an all-equity transaction valued at $150 million.

The deal involves 1,358 net royalty acres across two ranches primarily in Glasscock and Martin counties in Texas. More than 65% of acreage involved is operated by Permian Basin pure-play producer Diamondback Energy Inc., Viper's parent. The assets have a combined second-quarter production of about 1,400 barrels of oil equivalent per day, according to a Sept. 13 news release.

Viper will issue about 5.2 million common units, worth $150 million based on the units' volume-weighted average sales price of $29.02 for the five-trading-day period ended Sept. 5. The transaction is expected to close in the fourth quarter and has an effective date of Oct. 1.

"This acquisition is another step in Viper's strategy to continue to consolidate the fragmented private minerals market in the Permian Basin, both through our normal ground game of smaller deals, as well as larger acquisitions such as this deal announced today," Travis Stice, CEO of Viper's general partner, said in the release.

Viper was formed by Diamondback to own and acquire oil and natural gas producing properties in North America, with a main focus on the Permian. Santa Elena is a private portfolio company of EnCap Investments LLC focused on acquiring mineral and royalty interests in the production area.

Credit Suisse served as financial adviser to Viper. Tudor Pickering Holt & Co. was financial adviser to Santa Elena.