With steam coal prices continuing to be weak due to the inroads made by natural gas, Natural Resource Partners (NYSE:NRP) has decided if you can't beat 'em, join 'em. It announced Monday it is buying producing oil and gas properties located in the Williston Basin of North Dakota and Montana from Abraxas Petroleum (NASDAQ:AXAS) for $35.3 million in cash.

Natural Resource Partners has entered into a definitive agreement to purchase non-operated working interests in approximately 120 producing wells as well as interests in 22 wells that are in various stages of development.

Noting the acquisition adds diversity to NRP's revenue stream, Natural Resource Partners President and COO Nick Carter said, "This acquisition marks NRP's strategic entry into the Bakken play and into owning non-operated working interests in oil and gas assets."

The acquisition consists of approximately 13,500 net acres "that are held by production with an estimated average working interest of 11% in the Bakken/Three Forks play." The deal will have an effective date of March 1, but is expected to close in the third quarter and will be immediately accretive to NRP's unitholders.

Natural Resource Partners anticipates funding $8.1 million in additional capital expenditures associated with the new wells this year, which will partially be paid for at closing. NRP is primarily in the business of owning and managing coal, aggregate, and oil and gas reserves across the United States that generate royalty income for the partnership.

Abraxas said it will use the proceeds from the sale to pay off debt and to "accelerate growth in the company’s core areas." inclusive of the non-operated Bakken sale, Abraxas says it has divested approximately 502 boepd for gross proceeds of $47.3 million since the beginning of 2013.


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