TSX:FNV 91.26 +0.72 +0.8%
Volume 488,722
April 26, 2017
NYSE:FNV 67.10 +0.35 +0.52%
Volume 989,490
April 26, 2017
Gold 1,265.60 -10.20 -0.8%
Volume 605
April 25, 2017
Contact Share

Location: Oklahoma
Operator: Pioneer Natural Resources and various other operators
Royalty: Effective Royalty Rate: 0.14%

In the first quarter of 2017, Franco-Nevada agreed to acquire a package of royalties in the Midland Basin for a price of $110 million. The Midland Basin comprises the eastern portion of the broader Permian Basin, which is located in west Texas, and which is known to be one of the most active plays in North America. The acreage is extremely diversified, covering a significant portion of the core of the Midland basin and provides exposure to multiple benches in the Wolfcamp and Spraberry formations. The royalties consist of approximately 97% mineral title rights, along with some GORR interests, which apply to approximately 908 acres (net after royalties) that with pooling provides exposure to an estimated gross acreage of 675,000 acres at an estimated average royalty rate of 0.14%.

The acreage is host to numerous operators, however, Pioneer Natural Resources is the operator for the largest portion of royalty acreage. Pioneer is one of the largest companies operating in the basin. Pioneer is focused solely on its Midland Basin acreage and achieves some of the best well results in the area.

Closing of the Midland acquisition is expected in the second quarter of 2017. At the time of this report, Franco-Nevada had not yet begun to receive revenue from the Midland Basin royalties.