Alliance Resource Partners (NASDAQ: ARLP) closes $206M minerals acquisition
Rhea-AI Filing Summary
Alliance Resource Partners, L.P. completed a roughly $206.2 million acquisition of additional general and limited partner interests in AllDale Minerals III & IV. The deal was funded with cash on hand, borrowings under its revolving credit facility, and a new $150 million Term Loan at subsidiary Alliance Minerals, LLC.
Following the transaction, the partnership holds 100% of the non‑economic general partner interests, a 46.92% limited partner interest in AllDale III, and a 78.57% limited partner interest in AllDale IV. It now controls about 115,680 net royalty acres in its Oil & Gas Royalties segment, including over 44,770 net royalty acres in the Permian Basin.
The Term Loan matures on January 1, 2028, with quarterly principal payments of $18.75 million beginning in the quarter ending September 30, 2026, and bears interest at SOFR or a Base Rate plus a margin tied to outstanding principal. Related‑party contribution and exchange transactions with entities linked to CEO Joseph W. Craft III were reviewed and approved by an independent conflicts committee.
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Insights
ARLP expands oil & gas royalties using new term debt.
Alliance Resource Partners is deepening its oil & gas royalties footprint by buying more interests in AllDale III & IV for about $206.2 million. This increases control to 100% of non‑economic GP interests plus majority LP stakes, and consolidates roughly 115,680 net royalty acres.
The acquisition is partly financed by a new $150 million Term Loan at Alliance Minerals. The loan amortizes $18.75 million quarterly starting with the quarter ending September 30, 2026 and matures on January 1, 2028, adding a clear schedule of required cash outflows. Covenants cap secured leverage and total debt‑to‑cash‑flow ratios and limit additional Notes Indebtedness at $575.0 million.
Governance-wise, multiple related‑party steps were consolidated into Contribution and Exchange Agreements with Craft‑related entities. An independent conflicts committee reviewed terms and deemed them fair and reasonable. Future periodic filings and earnings calls may clarify how the added royalty acreage and higher debt load affect cash generation and capital allocation.
8-K Event Classification
Key Figures
Key Terms
Term Loan financial
consolidated EBITDA financial
Change of Control financial
net royalty acres market
forward-looking statements regulatory
conflicts committee financial
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On July 1, 2026, Alliance Minerals acquired all of the general partner and limited partner interests in AllDale Minerals III, LP ("AllDale III") and AllDale Minerals IV, LP ("AllDale IV", and collectively with AllDale III, "AllDale III & IV") that are not already owned by Alliance Minerals through its existing investment in AllDale III or by related parties of Mr. Joseph W. Craft III for approximately $206.2 million, subject to customary post-closing adjustments (the “Acquisition”). We funded the Acquisition using a combination of cash on hand, borrowing under our revolving credit facility and the Term Loan discussed below. In connection with the Acquisition, certain entities related to Joseph W. Craft III acquired, pursuant to separate definitive agreements, an aggregate of $100.0 million of limited partner interests in AllDale III. In connection with the Acquisition, we entered into the following material definitive agreements:
Term Loan
On July 1, 2026, Alliance Minerals, LLC ("Alliance Minerals"), as borrower, entered into a Term Loan (the "Term Loan") with Truist Bank who is acting as administrative agent (the "Administrative Agent"). Alliance Minerals is a wholly owned subsidiary of Alliance Resource Partners, L.P. (the "Partnership"). The Term Loan provides for an aggregate principal amount of $150 million. The Term Loan matures on January 1, 2028, at which time the aggregate outstanding principal amount of the Term Loan is required to be repaid in full. Interest is payable no less frequently than quarterly, with principal payments of $18.75 million due quarterly beginning with the quarter ending September 30, 2026.
The Term Loan is guaranteed by the Partnership, Alliance Resource Operating Partners, L.P. ("AROP"), Alliance Minerals’ direct and indirect subsidiaries, Alliance Royalty, LLC and AR Midland, LP, and AllRoy GP, LLC and its subsidiary CavMM, LLC (the "Subsidiary Guarantors"). The Term Loan is also secured by the equity interests in and personal property of Alliance Minerals and the Subsidiary Guarantors, and by the equity interests of Alliance Minerals and the Subsidiary Guarantors in the Partnership's other oil & gas minerals entities.
Borrowings under the Term Loan bear interest, at our option, at either (i) an adjusted one-month, three-month or six-month term rate based on the secured overnight financing rate published by the Federal Reserve Bank of New York ("SOFR") plus the applicable margin or (ii) the Base Rate ("Base Rate") plus the applicable margin. The Base Rate is the highest of (i) the rate of interest which the Administrative Agent announces from time to time as its prime lending rate, as in effect from time to time (the "Prime Rate"), (ii) the Federal Funds Rate, as in effect from time to time, plus 0.50%, (iii) Term SOFR for an Interest Period of one (1) month, plus 1.00% and (iv) zero percent (0%). The applicable margin for borrowings under the Term Loan is determined by reference to the principal amount of the loan outstanding as set forth below:
Pricing Level | Principal Amount of Loan Outstanding | Applicable Margin for SOFR Loans | Applicable Margin for Base Rate Loans |
I | Greater than or equal to $99,000,000 | 2.25% per annum | 1.25% per annum |
II | Less than $99,000,000, but greater than or equal to $49,500,000 | 2.00% per annum | 1.00% per annum |
III | Less than $49,500,000 | 1.75% per annum | 0.75% per annum |
The Term Loan contains various restrictive covenants applicable to Alliance Minerals and its subsidiaries, including limitations on indebtedness, liens, asset sales, investments, mergers and consolidations, and affiliate transactions, in each case subject to customary exceptions. In addition, the restrictions provide an aggregate limit of $575.0 million Notes Indebtedness (as such term is defined in the Term Loan) at AROP. The Term Loan requires us to maintain (a) total consolidated secured debt of Alliance Minerals to consolidated EBITDA of Alliance Minerals ratio of not more than 2.0 to 1.0, and (b) a total consolidated debt of Alliance Minerals to consolidated Alliance Minerals cash flow ratio of not more than 2.5 to 1.0, during the four most recently ended fiscal quarters.
The Term Loan contains customary provisions regarding events of default which, if not cured within any applicable grace periods, would permit the lenders to declare all amounts outstanding immediately due and payable, including failure to make timely payments of principal of or interest on the outstanding balance, the failure to comply with covenants or representations in the Term Loan, cross-defaults with certain other indebtedness, upon a "Change of Control" (as defined in the Term Loan), certain bankruptcy and insolvency related events, certain monetary judgment defaults, and certain claims arising under environmental laws that if, adversely determined, would be material.
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Contribution and Exchange Agreements
On July 1, 2026, we entered into Contribution and Exchange Agreements with the related parties who held general and limited partner interests in AllDale III & IV prior to the Acquisition and the related parties who acquired limited partner interests in AllDale III through the Acquisition (collectively, the "Craft Related Parties"), with respect to AllDale III & IV (the "Contribution and Exchange Agreements"). Pursuant to the Agreements, the parties effected a series of coordinated transactions (collectively, the "Transactions") involving the restructuring of the ownership and governance of AllDale III & IV. The Transactions had the effect of exchanging the existing general partner interests held by Alliance Minerals and certain Craft Related Parties for limited partner interests in AllDale III & IV, removing pre-existing profits interests attributable to such general partner interests, and assigning a non-economic general partner interest to AllRoy GP, LLC, a wholly owned subsidiary of the Partnership.
Following the closing, we hold 100% of the non-economic general partner interests in AllDale III & IV, a 46.92% limited partner interest in AllDale III, and a 78.57% limited partner interest in AllDale IV. We now control approximately 115,680 net royalty acres within our Oil & Gas Royalties segment, including over 44,770 net royalty acres in the Permian Basin.
Copies of Agreements
The foregoing description of the Term Loan and Contribution and Exchange Agreements are summaries only and are qualified in their entirety by reference to the complete text of the respective agreements, which will be filed as exhibits to the Partnership’s periodic report for the period in which such agreements are required to be filed.
Related Party Transactions
The Craft Related Parties include entities related to Joseph W. Craft III, who owns Alliance Resource Management GP, LLC, the managing general partner of ARLP (the "MGP"), beneficially owns approximately 14.6% of the common units, representing limited partner interests in ARLP, and is the President and Chief Executive Officer, and Chairman of the Board of Directors of MGP (the "Board"). The terms of the Contribution and Exchange Agreements were reviewed and approved by the conflicts committee of the Board (the "Conflicts Committee"), which is composed entirely of independent directors. The Conflicts Committee determined that the transactions with the Craft Related Parties were fair and reasonable to the Partnership and its unitholders.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION.
The information with respect to the Term Loan included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03 of this Current Report on Form 8-K.
ITEM 7.01. | REGULATION FD DISCLOSURE. |
On July 2, 2026, the Partnership issued a press release announcing the closing of the Acquisition. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information furnished in this Item 7.01, including Exhibit 99.1 hereto, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section nor shall such information be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except to the extent specifically referenced in any such filings.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) Exhibits
Exhibit |
| Description | |
99.1 | Alliance Resource Partners, L.P. press release dated July 2, 2026. | ||
104 | Cover Page Interactive Data File (formatted as inline XBRL). | ||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Alliance Resource Partners, L.P. | ||
By: | Alliance Resource Management GP, LLC, | |
its general partner | ||
By: | /s/ Cary P. Marshall | |
Cary P. Marshall | ||
Senior Vice President and Chief Financial Officer | ||
Date: July 2, 2026
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Exhibit 99.1
PRESS RELEASE
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Alliance Resource Partners, L.P. Completes $206 Million Acquisition of Oil & Gas Mineral Interests
TULSA, OKLAHOMA, July 2, 2026 — Alliance Resource Partners, L.P. (NASDAQ: ARLP) ("ARLP") today announced that it has completed its previously announced acquisition of certain general partner and limited partner interests in AllDale Minerals III, LP and AllDale Minerals IV, LP for approximately $206.2 million, subject to customary post-closing adjustments.
ARLP funded the acquisition using a combination of cash on hand, borrowings under its revolving credit facility, and a new $150.0 million term loan at its wholly owned subsidiary Alliance Minerals, LLC.
Following the acquisition, ARLP now controls approximately 115,680 net royalty acres within its Oil & Gas Royalties segment, including over 44,770 net royalty acres in the Permian Basin. ARLP expects to provide additional commentary regarding the acquisition during its next quarterly earnings conference call.
About Alliance Resource Partners, L.P.
ARLP is a diversified natural resource company that is currently the second largest coal producer in the eastern United States, supplying reliable, affordable energy domestically and internationally to major utilities, metallurgical and industrial users. ARLP also generates operating and royalty income from mineral interests it owns in strategic coal and oil & gas producing regions in the United States. In addition, ARLP is positioning itself as a reliable energy partner for the future by pursuing opportunities that support the growth and development of energy-related technologies and infrastructure.
News, unit prices and additional information about ARLP, including filings with the Securities and Exchange Commission (“SEC”), are available at www.arlp.com. For more information, contact the investor relations department of ARLP at (918) 295-7673 or via email at investorrelations@arlp.com.
Investor Relations Contact
Cary P. Marshall
Senior Vice President and Chief Financial Officer
918-295-7673
investorrelations@arlp.com
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The statements and projections used throughout this release are based on current expectations. These statements and projections are forward-looking, and actual results may differ materially. These projections do not include the potential impact of any mergers, acquisitions or other business combinations that may occur after the date of this release. We have included more information below regarding business risks that could affect our results.
FORWARD-LOOKING STATEMENTS: With the exception of historical matters, any matters discussed in this press release are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from projected results. Those forward-looking statements include expectations with respect to our future financial and operational performance, coal and oil & gas consumption and expected future prices, our ability to increase or maintain unitholder distributions in future quarters, business plans and potential growth with respect to our energy and infrastructure investments, optimizing cash flows, reducing operating and capital expenditures, infrastructure projects at our existing properties, growth in domestic electricity demand, preserving liquidity and maintaining financial flexibility, and our future repurchases of units. These risks to our ability to achieve these outcomes include, but are not limited to, the following: decline in the coal industry’s share of electricity generation, including as a result of environmental concerns related to coal mining and combustion, the cost and perceived benefits of other sources of electricity and fuels, such as oil & gas, nuclear energy, and renewable fuels and the retirement of coal-fired power plants in the U.S.; our ability to provide fuel for growth in domestic energy demand, should it materialize; changes in macroeconomic and market conditions and market volatility, and the impact of such changes and volatility on our financial position; changes in global economic and geo-political conditions or changes in industries in which our customers operate; changes in commodity prices, demand and availability which could affect our operating results and cash flows; impacts of geopolitical events, including the conflicts in Ukraine and in the Middle East; actions of the major oil-producing countries with respect to oil production volumes and prices and the direct and indirect impacts over the near and long term on oil & gas exploration and production operations at the properties in which we hold mineral interests; changes in competition in domestic and international coal markets and our ability to respond to such changes; potential shut-ins of production by the operators of the properties in which we hold oil & gas mineral interests due to low commodity prices or the lack of downstream demand or storage capacity; risks associated with the expansion of and investments into the infrastructure of our operations and properties, including the timing of such investments coming online; our ability to identify and complete acquisitions and to successfully integrate such acquisitions into our business and achieve the anticipated benefits therefrom; our ability to identify and invest in new energy and infrastructure ventures; the success of our development and growth plans for our wholly owned subsidiary, Matrix Design Group, LLC, and our investments in emerging and other infrastructure and technology companies; dependence on significant customer contracts, and failure of customers to renew existing contracts upon expiration; adjustments made in price, volume, or terms to existing coal supply agreements; the effects of and changes in trade, monetary and fiscal policies and laws, and the results of central bank policy actions including interest rates, bank failures, and associated liquidity risks; the effects of and changes in taxes or tariffs and other trade measures adopted or threatened by the United States and foreign governments, including the imposition of or increase in tariffs on steel and/or other raw materials; legislation, regulations, and court decisions and interpretations thereof, both domestic and foreign, including those relating to the environment and the release of greenhouse gases, such as state legislation
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seeking to impose liability on a wide range of energy companies under greenhouse gas “superfund” laws, mining, miner health and safety, hydraulic fracturing, and health care; deregulation of the electric utility industry or the effects of any adverse change in the coal industry, electric utility industry, or general economic conditions; investors’ and other stakeholders’ attention to sustainability matters; liquidity constraints, including those resulting from any future unavailability of financing; customer bankruptcies, cancellations or breaches to existing contracts, or other failures to perform; customer delays, failure to take coal under contracts or defaults in making payments; our productivity levels and margins earned on our coal sales; disruptions to oil & gas exploration and production operations at the properties in which we hold mineral interests; changes in equipment, raw material, service or labor costs or availability, including due to inflationary pressures or tariffs; changes in our ability to recruit, hire and maintain labor; our ability to maintain satisfactory relations with our employees; increases in labor costs, including increases in the costs of health insurance, adverse changes in work rules, or cash payments or projections associated with workers’ compensation claims; increases in transportation costs and risk of transportation delays or interruptions; operational interruptions due to geologic, permitting, labor, weather, supply chain shortage of equipment or mine supplies, or other factors; risks associated with major mine-related accidents, mine fires, mine floods or other interruptions; results of litigation, including claims not yet asserted; foreign currency fluctuations that could adversely affect the competitiveness of our coal abroad; difficulty maintaining our surety bonds for mine reclamation as well as workers’ compensation and black lung benefits; difficulty in making accurate assumptions and projections regarding post-mine reclamation as well as pension, black lung benefits, and other post-retirement benefit liabilities; uncertainties in estimating and replacing our coal mineral reserves and resources; uncertainties in estimating and replacing our oil & gas reserves; uncertainties in the amount of oil & gas production due to the level of drilling and completion activity by the operators of our oil & gas properties; the impact of current and potential changes to federal or state tax rules and regulations, including a loss or reduction of benefits from certain tax deductions and credits; difficulty obtaining commercial property insurance, and risks associated with our participation in the commercial insurance property program; evolving cybersecurity risks, such as those involving unauthorized access, denial-of-service attacks, malicious software, data privacy breaches by employees, insiders or others with authorized access, cyber or phishing attacks, ransomware, malware, social engineering, physical breaches, or other actions; and difficulty in making accurate assumptions and projections regarding future revenues and costs associated with equity investments in companies we do not control.
Additional information concerning these, and other factors can be found in ARLP’s public periodic filings with the SEC, including ARLP’s Annual Report on Form 10-K for the year ended December 31, 2025, filed on February 26, 2026, and ARLP’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, filed on May 8, 2026. Except as required by applicable securities laws, ARLP does not intend to update its forward-looking statements.
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