ALLIANCE RESOURCE PARTNERS LP 8-K

What Happened
Alliance Resource Partners, L.P. (ARLP) announced that on July 1, 2026 it closed an acquisition of all remaining general and limited partner interests in AllDale Minerals III, LP and AllDale Minerals IV, LP (AllDale III & IV) for approximately $206.2 million (subject to customary post‑closing adjustments). ARLP funded the purchase with cash on hand, borrowings under its revolver and a new $150 million Term Loan arranged by Truist Bank. Related parties tied to Joseph W. Craft III also acquired $100.0 million of limited partner interests in AllDale III in separate agreements.

Key Details

• Acquisition date: July 1, 2026; purchase price: ~$206.2 million (subject to adjustments).
• Post‑closing ownership: ARLP holds 100% of the non‑economic general partner interests, 46.92% limited partner interest in AllDale III and 78.57% limited partner interest in AllDale IV. Net royalty acres now ~115,680, including ~44,770 in the Permian Basin.
• Term Loan: $150.0 million principal, maturity January 1, 2028; quarterly interest and principal amortization with $18.75 million principal due quarterly beginning Sept. 30, 2026.
• Pricing: interest choice of SOFR‑based or Base Rate plus margin that steps by outstanding balance (e.g., SOFR margin 2.25% if ≥ $99M outstanding; down to 1.75% if < $49.5M). Loan is guaranteed by ARLP and several subsidiaries and secured by equity and personal property of the borrower and guarantors.
• Covenants and limits: secured debt/EBITDA ≤ 2.0x and total debt/cash flow ≤ 2.5x (on a trailing four‑quarter basis); aggregate Notes Indebtedness limit of $575.0M at Alliance Resource Operating Partners, L.P. Transactions with Craft‑related parties were reviewed and approved by the independent Conflicts Committee.

Why It Matters
The deal expands ARLP’s oil & gas royalties footprint—notably adding substantial Permian Basin acreage—while increasing near‑term leverage and scheduled debt amortization. Investors should note the material near‑term principal payments (quarterly $18.75M starting Sept. 30, 2026) and the loan covenants that could restrict flexibility if operating cash flow or EBITDA weakens. The involvement of Craft‑related parties was overseen by an independent Conflicts Committee, which concluded the transactions were fair and reasonable. A press release about the closing was furnished as Exhibit 99.1.