2008-09-02-2007-12-21-2008-01-31

Acquired TX & NM Permian Basin assets, gaining 4.4 MMBOE proved, 810 BOE/d.

Vanguard Natural Resources LLC, Houston, (NYSE Arca: VNR) has closed its acquisition of producing properties in the Permian Basin in Texas and New Mexico from Apache Corp., Houston, (NYSE: APA) for $78.3 million. The properties have total estimated proved reserves of 4.4 million barrels of oil equivalent (83% oil, 90% proved developed) and includes operated and nonoperated wells. Net daily production is approximately 810 barrels of oil equivalent. The reserve-to-production ratio is approximately 15 years. Vanguard chief executive Scott W. Smith says, "We are excited to get this first major acquisition closed and are looking forward to building upon this asset base by expanding our interests in the Permian Basin." Vanguard has assumed oil hedges covering approximately 90% of the estimated proved developed producing oil reserves through 2011 at a weighted average price of $87.29 per barrel. The acquisition was funded with borrowings under Vanguard's existing credit facility of $100.5 million. Vanguard entered interest-rate swaps that effectively fix the Libor rate at 3.0% on $30 million of borrowings. It entered into an interest rate swap in December that fixed the Libor at 3.875% on $20 million of its borrowings, resulting in a weighted average Libor rate of 3.35% on $50 million of borrowings. The effective date is Oct. 1, 2007.