Last week, Natural Resource Partners LP (NYSE: NRP) annouced a transaction in which it paid $15 million for an overriding frac sand royalty interest on 561 acres near Wyeville, Wisconsin.
The property is estimated to have a 30-year resource life and is in production.
According to the company, the reserves, with an estimated reserve life exceeding 30 years, and the production facility are capable of serving all major US oil and natural gas producing basins, particularly the Bakken.
The transaction was funded through NRP's credit facility and is expected to generate a minimum annual royalty of $2.1 million.
“The property is in production and should generate income for NRP immediately. We see this as an attractive transaction, but it is too small to change our estimates ($20.71; Accumulate; $24.00 PT),” noted Global Hunter Securities analysts following the announcement.
Natural Resource Partners is a master limited partnership that is principally engaged in the business of owning and managing mineral reserve properties. NRP primarily owns coal, aggregate and oil and gas reserves across the United States that generate royalty income for the partnership.
The partnership does not actively engage in the mining of any of its minerals or natural resources, but rather leases its properties to various operators in exchange for royalty payments.
Natural Resource Partners is headquartered in Houston, TX with its operational headquarters in Huntington, WV.