QR Energy Eyes Ark-La-Tex, Michigan Acreage

To acquire operated assets Ark-La-Tex & MI area featuring 150 producing wells, gaining 1,178 BOE/d, 13 MMBOE proved.

QR Energy LP, Houston, (NYSE: QRE), the upstream MLP operated by Houston-based, privately held Quantum Resources Management LLC, has acquired properties in the Ark-La-Tex area and Michigan from an undisclosed private seller for $230 million in cash.

Approximately 95% of reserves are are in two mature oil fields in the Ark-La-Tex area, an existing core area of QR Energy. The properties feature approximately 150 producing wells and are 100% operated.

Current net production is 1,178 barrels of oil equivalent per day (93% liquids). Total proved reserves as of Jan. 1 were 13 million barrels equivalent (98% proved developed, 95% liquids).

Estimated maintenance capex for these assets will be approximately $2 million per year.

QR Energy chief executive Alan L. Smith says, “These oily, low-decline, long life properties are an ideal fit for our MLP strategy and will enhance our liquids inventory in the Ark-La-Tex area. We expect this bolt-on transaction to be immediately accretive to distributable cash-flow and to supplement cash flow from our existing portfolio over the next several years.”

Barclays Capital and Wells Fargo Securities are financial advisors to QR.

QR Energy was formed in December 2010 by affiliates of Quantum Resource Funds to own and acquire producing oil and natural gas properties.