TSX:FNV 87.30 -0.19 -0.21%
Volume 234,556
August 21, 2018
NYSE:FNV 67.02 -0.04 -0.06%
Volume 196,392
August 21, 2018
Gold 1,194.63 +2.00 +0.17%
Volume
August 21, 2018
Contact Share

Location: TEXAS AND NEW MEXICO
Operator: ANADARKO, OCCIDENTAL PETROLEUM, CIMAREX AND VARIOUS OTHER OPERATORS
Royalty: VARIOUS ROYALTY RATES

In the third quarter of 2017, Franco-Nevada agreed to acquire a package of royalties in the Delaware Basin for approximately $101 million. The Delaware Basin comprises the western portion of the broader Permian Basin, which is located in West Texas and southeast New Mexico. Sitting to the west of the Midland Basin, the Delaware Basin shares many similarities geologically, but the Delaware Basin has been increasing in focus for operators to drill horizontal wells, due to the stacked pay potential and premier economics.

The acquired acreage is mainly within the West Texas portion of the basin and provides exposure to multiple benches in the Wolfcamp and Bone Spring formations. The royalties consist of approximately 94% mineral title rights, along with some GORR interests, which apply to approximately 703 acres (net after royalties), that with pooling provides exposure to an estimated gross acreage of 138,240 acres.

There are various operators across the acreage, and companies continue to direct capital toward the Delaware Basin which is expected to result in increased production levels going forward.

The transaction closed in February 2018. Franco-Nevada expects to begin to generate revenue in 2018 from these assets.

ASSET HIGHLIGHTS:

  • Royalty acreage provides exposure to the core of the Delaware Basin
  • Delaware Basin represents one of most actively developing and economic plays in North America
  • Revenues expected to ramp-up as royalty acreage is developed