LandBridge Acquires 46,000 Surface Acres in Southern Delaware Basin

LandBridge Co. LLC has agreed to acquire approximately 46,000 largely contiguous surface acres in the Southern Delaware Basin from VTX Energy Partners LLC. The acquisition of the acreage, known as the Wolf Bone Ranch, is valued at $245 million in cash, subject to customary purchase price adjustments and closing conditions, LandBridge said in a media release.

The ranch is located adjacent to LandBridge’s existing acreage in Reeves County, Texas. The Wolf Bone Ranch is strategically located at a crucial crossroad for oil and natural gas exploration and transportation, providing access to the Waha Gas market hub, LandBridge said.

The land is also suitable for produced water operations, currently handling around 300,000 barrels per day (MBbls/d), supported by infrastructure owned and operated by VTX Energy, alongside assets owned and managed by WaterBridge Operating LLC, which is affiliated with LandBridge.

According to the agreement, VTX Energy has committed to a minimum annual revenue of $25 million to LandBridge for the next five years.

“This acquisition demonstrates our continued commitment to our active land management strategy across the Delaware Basin, and we see significant opportunities for a broad range of industrial development and revenue growth on the Wolf Bone Ranch”, Jason Long, Chief Executive Officer of LandBridge, said. “These opportunities include commercial real estate opportunities along the over seven miles of Highway 285 frontage and potential digital infrastructure and renewable energy projects”.

LandBridge plans to fund the acquisition with net proceeds from a private placement and loans. The company will issue 5,830,419 Class A shares representing limited liability company interests for $60.03 per share, in a private placement to select institutional and accredited investors constituting a group of both new and existing shareholders.

The company said that a portion of up to $200 million of the net proceeds from the shares sale will be used to fund the acquisition.

The completion of the private placement depends on the successful closing of the acquisition. However, the acquisition's closing is not dependent on the completion of the private placement, LandBridge said. Both the acquisition and the private placement are anticipated to conclude in the fourth quarter of 2024.

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