Published: October 23, 2024 |

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Spicewood Mineral Partners released an update on its new acquisitions in the Delaware Basin. In recent months, the company has been acquiring a selection of tier 1 mineral assets in the Permian Basin. Spicewood’s acquisitions reflect a strategic blend of early-life and more mature assets, each offering varied cash flow profiles and operator diversity.

These recent investments showcase the company’s commitment to acquiring premium quality assets through a top-down basin analysis and bottom-up investment approach, which enables Spicewood to capitalize on market inefficiencies, strong seller relationships and the team’s deep basin expertise.

“These uncorrelated, low-volatility assets offer a senior secured status for cash flow, tax advantages, and inflation protection, representing an emerging institutional asset class,” said John Golden, Spicewood co-founder and partner.

“Additionally, we expect these assets to provide meaningful quarterly distributions to our partners, underscoring our commitment to delivering consistent risk-adjusted returns,” added Golden.

DEAL HIGHLIGHTS

Deal 1: Strategic acquisition of early-life, 90 percent undeveloped mineral tract in the Delaware Basin, offering the potential for significant upside through resource development and timing advantages. Recent activity includes Oxy filing a lease in the neighboring section and several operators (CP, BTA, Rio, Point Energy) farming-in nearby to accelerate timing and reserves.

Deal 2: Higher-yielding asset with mineral interests in the Delaware and Midland Basins, operated by Oxy and High Peak. The deal includes both production-ready assets and significant future development opportunities. Approximately 60 percent of the inventory remains, featuring a mix of sub-$40/Bbl opportunities and longer-term potential.

Deal 3: Mineral interests in Ward County, considered to have strong production potential, supported by proximity to key operators like COP and Oxy.

Deal 4: Mineral interests in Northern Reeves County, associated with BP. This unit is one of BP’s last remaining long-lateral developments in the core of the basin, indicating significant near-term development focus.

Deal 5: Mineral interests across the Delaware Basin with strong near-term cash flow and future development potential. Only 18 percent of the asset is in PDP, with the majority of inventory having break-evens below $35/Bbl.

These assets fit the company’s existing portfolio of lowest break-even costs along with a “highest depth of resource” profile as compared to U.S. basins, which Spicewood believes will ensure future development from our operators.

Spicewood’s recent acquisitions include a mix of undeveloped tracts and mature assets, providing both immediate cash flow and long-term growth potential.

The mineral tracts acquired have best-in-class operators such as ConocoPhillips, Oxy, and BP, each focused on low break-even and highest return potential resource opportunities. This diversity ensures resilience and optimal management across the company’s assets.

Spicewood Mineral Partners is a Dallas-based U.S. mineral and energy investment firm. They are an investment and technology-driven firm focused on the acquisition, aggregation, and management of mineral & royalty assets within the top-tier U.S. basins, where they have downside protection from low break-even drilling economics, deep inventory potential and highest quality resource potential. Spicewood utilizes its investment process, in-house technical expertise, and industry relationships in an effort to provide attractive risk-adjusted returns to its investment partners. Spicewood’s mineral strategy is designed to provide current income for yield-focused investors. The Spicewood team is currently supported by 13 investment and technical professionals with 100+ years of combined experience in the oil and gas industry.

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