ARLP to acquire oil and gas royalty interests for $206 million
Alliance Resource Partners, L.P. (NASDAQ: ARLP) announced it has entered into agreements to acquire interests in AllDale Minerals III, LP and AllDale Minerals IV, LP for approximately $206.2 million, according to a company statement.
The transaction values AllDale III & IV at approximately $410.0 million in aggregate. ARLP will acquire $206.2 million of interests, while related parties of Joseph W. Craft III, the company's Chairman, President and Chief Executive Officer, will acquire $100.0 million of interests.
Upon closing, ARLP's economic interest across AllDale III & IV is expected to increase from approximately 5% to 61%. The company will own 100% of the general partner interests through a wholly owned subsidiary.
AllDale III & IV hold approximately 48,500 net royalty acres across the Permian, Anadarko, Bakken, and Haynesville basins. The Permian represents approximately 7,300 net royalty acres and 52% of first quarter 2026 total royalty revenue.
The properties are expected to produce an average of approximately 5,940 barrels of oil equivalent per day in total during the first quarter of 2026, with 3,665 barrels per day net to ARLP's economic interests. The production mix consists of 27% oil, 18% natural gas liquids, and 55% natural gas.
The transaction has an effective date of April 1, 2026, and is expected to close during July 2026, subject to customary closing conditions. Given the participation of related parties of Craft, the terms were approved by the conflicts committee of the Board of Directors, comprised entirely of independent directors.
ARLP expects to fund the acquisition through cash on hand, borrowings under its revolving credit facility, and a new debt facility at Alliance Minerals, LLC. Pro forma total leverage is expected to remain below 1.0x following the transaction closing.
Upon completion, ARLP is expected to control approximately 115,680 net royalty acres, with over 44,770 net royalty acres in the Permian. The company describes itself as the second largest coal producer in the eastern United States.