Bankruptcy Forces 37,000 Acre Texas Ranch Sale; Worth $52 Million
A ranch totaling more than 37,000 acres in West Texas is going on the auction block with sealed bids after a federal bankruptcy court ordered the ranch sale.
The KC7 Ranch near Balmorhea located amongst the Davis Mountain range is being sold with all of its assets by Icon Global Group, the same Texas realtor that sold the Waggoner Ranch for $725 million. Offers are being accepted until Nov. 30 at 5 pm CDT.
The ranch was previously listed for sale at $52 million and is owned by Thomas Darden, a former petroleum executive, who according to the Fort Worth Star-Telegram filed for Chapter 11 bankruptcy. KC7 Ranch filed for bankruptcy on Dec. 28, 2017, and the rest of Darden’s companies filed on Jan. 1, 2018.
The stocking rate for the 37,759 acre property is listed at one animal unit per 50 acres. A reasonable stocking rate of approximately 500 cows with calves could graze the KC7 Ranch.
There are water systems in place on the ranch along with working pens to continue operating it as a cow-calf ranch. Water sources for cattle include three springs fed into pastures with poly pipe, five solar wells, one electric house well and two lakes covering 40 acres when full. There are seven additional mountain springs that are utilized by wildlife.
KC7 Ranch is described as being “mid-elevation grassland” with a number of forages including sideoats grama, blue grama, plains bristlegrass, and black grama. The primary growing season is from June to September. The ranch has diverse terrain with approximately 3,000 feet in elevation change ranging from 3,450 feet to 6,000 feet. The entire ranch is fenced off and cross fencing has created 11 pastures.
Hunting on the ranch includes mule deer, aoudad rams, javelinas, feral hogs and three species of quail.
Included in the sale are the ranch’s water, mineral and surface fee simple rights.
“The inclusion of the previously unavailable but immensely valuable owned water rights in this property is a game changer and makes for an extremely unique and potentially revenue-rich investment opportunity with predicted income streams potentially worth many multiples beyond any surface value acquisition price,” says Icon Global’s founder Bernie Uechtritz.
The property sits on the Capitan Reef Complex Aquifer and is capable of producing approximately 400,000 barrels of frac water per day. The ranch currently has a water lease with a developer that offers a 20% royalty for all water produced and sold from the ranch, the lease can be continued if desired.
There are 10,650 mineral acres, with 4,500 acres currently in a lease that expires in November 2018, but can be renewed. The leased acreage by Apache Corp. is currently for $800 per acre and there are still 6,150 open unleased mineral acres.
A number of houses are found on the KC7 Ranch including a 10,000 square feet main house made from native stone with six bedrooms and six bathrooms and two half baths. The main house features a library, full basement and 2,300 square feet of front and rear porches.
Two guest houses are near the main house and have six beds each, along with showers and full bathrooms. A hunter’s cabin has three bedrooms while the ranch foreman’s house has three bedrooms, too.
Additional improvement at the KC7 Ranch include a 12 stall horse barn which has storage space and a shop, along with a rock barn and corrals near the headquarters.
According to Uechtritz, realistic offers for the ranch will have to start around $35-40 million and will likely go up from there.
A video of the property can be seen above and an interactive map of the KC7 Ranch can be found online.
