2008-10-21-2008-04-04-2008-04-30

Bought company, gaining 6.7 MMBOE proved, 850 BOE/d in TX Permian.

The MLP Eagle Rock Energy Partners LP, Houston, (NasdaqGS: EROC), a portfolio company of Natural Gas Partners, Irving, Texas, has completed its acquisition of privately held Stanolind Oil and Gas Corp., Midland, Texas, in a drop-down transaction for $79 million in cash. Stanolind operated oil and gas producing properties in the Permian Basin, primarily in Ward, Crane and Pecos counties, Texas. Estimated proved reserves are approximately 6.7 million barrels of oil equivalent (47% proved developed producing; 53% oil). Net production is approximately 850 barrels of oil equivalent per day. The assets include 290 producing wells (99% operated) with a large number of recompletion and low-risk drilling opportunities with 33 proved undeveloped locations, and 65 probable and possible locations. The proved reserves-to-production ratio (R/P) is approximately 23 years, increasing Eagle Rock's total proved reserve base by 29% and its proved R/P ratio to 11.6 years. Eagle Rock chairman and chief executive Joseph A. Mills says, "The Stanolind acquisition represents an extraordinary opportunity for our partnership to enter the prolific, long-lived Permian Basin with high-quality, low-risk assets at a very attractive valuation. These assets will provide an excellent low–risk, organic growth component to our upstream business. "We are particularly excited to make this entry into the Permian Basin because we believe the basin presents excellent opportunities for additional, moderately-sized midstream, upstream and mineral acquisitions with characteristics that fit well in the MLP structure. Our management team has substantial experience in the area, and plans to increase the partnership's presence there in the years ahead." The effective date is Jan. 1.