An affiliate of Haymaker Minerals & Royalties III has closed a deal to acquire mineral and royalty interests in “thousands of wells” across 30 counties and parishes in Louisiana, Montana, North Dakota and Texas.

haymaker map

“This acquisition fits perfectly within the Haymaker strategy of acquiring diversified mineral portfolios valued at greater than $100 million,” said Haymaker’s Karl Brensike, managing partner. “With almost 20 years of experience in acquiring and managing complex and diversified mineral portfolios, Haymaker management prides itself on working with sellers to provide flexible options for their assets.”

Haymaker partnered with private equity firm Denham Capital on the transaction, which was completed with an undisclosed party.

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Haymaker continues “to have a strong appetite for additional diversified mineral portfolios of scale,” Brensike said.

Since its founding in 2013, Haymaker has acquired mineral and royalty interests in more than 35,000 oil and gas wells in every major basin across the Lower 48. The company manages mineral and royalty portfolios valued between $100 million and $1 billion.

Accelerating Lower 48 Activity

Merger and acquisition (M&A) activity in the Lower 48 mineral and royalty segment has accelerated amid the strong commodity price environment.

“Like other parts of M&A, the rise in commodity prices this year is incentivizing sellers, particularly private equity, to bring their assets to market,” Enverus director Andrew Dittmar told NGI’s Shale Daily. “There is generally a healthy appetite for royalty assets in the M&A market from both public and private buyers, so these types of interests readily transact. 

“Since as a royalty owner you are at the mercy of your operators for organic volume growth, M&A is the lever you have control over if you want to grow cash flow and available distributions to you owners.”

In addition, Dittmar said, “a firming up of post-Covid rig plans makes it easier to predict drilling schedules and buy ahead of the drill bit.”

Recent deals for royalty and mineral interests include a pair of Permian Basin acquisitions by Sitio Royalties Corp. for a combined $547 million.“We believe that the mineral and royalty sector is ripe for consolidation,” said Sitio Chairman Noam Lockshin upon announcing the deals. Sitio itself was formed when Desert Peak Minerals and Falcon Minerals Corp. completed a $1.9 billion merger earlier this year.

Ring Energy Inc.’s $465 million acquisition of Stronghold Energy II Operating LLC and Stronghold Energy II Royalties LP, meanwhile, included 6,000 mineral acres in addition to 31,000 leasehold acres.

“There has been a substantial uptick in royalty and mineral M&A this year with $3.2 billion transacted year-to-date,” Dittmar said. He noted, however, that the merger creating Sitio and its subsequent Permian acquisitions account for a large chunk of the total.