ACQUISITIONS

9 Months Ended

Sep. 30, 2020

Business Combinations [Abstract]

ACQUISITIONS

ACQUISITIONS

2020 Activity

During the nine months ended September 30, 2020, the Partnership acquired, from unrelated third-party sellers, mineral and royalty interests representing 4,948 gross (410 net royalty) acres in the Permian Basin for an aggregate purchase price of approximately $63.4 million, subject to post-closing adjustments. The Partnership funded these acquisitions with cash on hand and borrowings under the Operating Company’s revolving credit facility.

2019 Activity

Drop-Down Acquisition

On October 1, 2019, we completed the acquisition of certain mineral and royalty interests from subsidiaries of Diamondback for approximately 18.3 million of its newly-issued Class B units, approximately 18.3 million newly-issued units of the Operating Company with a fair value of $497.2 million and $190.2 million in cash, after giving effect to closing adjustments for net title benefits (the ‘‘Drop-Down Acquisition’’). The mineral and royalty interests acquired in the Drop-Down Acquisition represent approximately 5,490 net royalty acres across the Midland and Delaware Basins, of which over 95% are operated by Diamondback, and have an average net royalty interest of approximately 3.2% (the ‘‘Drop-Down Assets’’). The Partnership completed the acquisition on October 1, 2019 and funded the cash portion of the purchase price for the Drop-Down Assets through a combination of cash on hand and borrowings under the Operating Company’s revolving credit facility.

Santa Elena Acquisition

On October 31, 2019, the Partnership completed the acquisition of certain mineral and royalty interests from Santa Elena (the ‘‘Santa Elena Acquisition’’), which assets were immediately contributed by the Partnership to the Operating Company. The assets acquired in the Santa Elena Acquisition represent approximately 1,366 net royalty acres across the Midland Basin with an average net royalty interest of approximately 5.6% and are primarily operated by Diamondback in Glasscock and Martin counties (the ‘‘Santa Elena Assets’’).

At closing, the Partnership issued to Santa Elena approximately 5.2 million common units representing limited partner interests in the Partnership as consideration for the Santa Elena Assets, and the Operating Company issued to the Partnership approximately 5.2 million new units of the Operating Company with a fair value of $124.0 million.

Other Recent Acquisitions

In addition, during the year ended December 31, 2019, the Partnership acquired, from unrelated third-party sellers, mineral and royalty interests representing 136,012 gross (2,607 net royalty) acres for an aggregate of approximately $343.7 million. The Partnership funded these acquisitions with cash on hand, a portion of the net proceeds from its first quarter 2019 offering of common units and borrowings under the Operating Company’s revolving credit facility.