On December 15, 2015, Cornerstone Acquisition & Management Company LLC acquired a mineral, royalty and overriding royalty portfolio for $29 million dollars from Shell . The portfolio holds interests in several hundred producing oil and gas wells spanning forty counties throughout eight states and multiple prolific basins. The assets possess attractive diversity in terms of commodities produced as well as conventional vs. unconventional production. The majority of production-related cash flow is generated from wells operated by financially strong, experienced E&P’s in long-lived, low (production) decline locations. Additionally, the portfolio contains nearly 25,000 net mineral acres, providing upside potential in the years ahead.
Cornerstone’s recent acquisition comes at a time when the price for crude has reached multi-year lows. We are very optimistic that we are at/near the trough of the cycle, whereby prudent investments in the space should provide for the potential of outsized returns looking ahead.