Vanguard Buys
Purchase of mature, non-operated Bakken assets producing 1,100 BOE.
Vanguard Natural Resources LLC (NYSE: VNR) plans to buy non-operated oil and gas assets in Montana for $131 million from an undisclosed seller.
The properties are located in the Bakken trend and are characterized by mature oil production with some associated natural gas production. The properties will be immediately accretive to cash flow and have current net production of approximately 1,100 barrels of oil equivalent (BOE) per day. The effective date of the acquisition is Aug. 1, and the company anticipates closing this acquisition on or before Dec. 31.
Vanguard plans to fund this acquisition with borrowings under its existing reserve-based credit facility. The properties described in the agreement with the seller are subject to a third party’s preferential right to purchase, which expires 30 days after notice.
The announcement of the planned purchase comes two weeks after Vanguard announced it hopes to buy about 254,000 net producing acres in Colorado and Wyoming from Bill Barret Corp. (NYSE: BBG) for $335 million in cash.
The assets in the deal with Denver, Colo-based Bill Barret Corp. have a total net current production of 65 million cubic feet equivalent (MMcfe) per day, 86% of which comes from natural gas. At current production levels, the reserves are expected to last 13 years.
Those assets include proven reserves of 233.4 billion cubic feet (Bcf) of natural gas, 3.6 million barrels (bbl) of oil, 7.6 million bbl of natural gas liquids, for a total 300.4 Bcfe of assets in the Piceance, Wind River and Powder River basins. About 80% of the total reserves are proved, developed.
The assets include about 184,000 net acres in the Wind River Basin (97% undeveloped, 12% held by production with majority of leases expiring in 2015 and beyond) and 67,000 net acres in the Powder River Basin (42% undeveloped, 93% held by production). In the Piceance Basin, Vanguard acquires 4,000 net acres, 37% of which is undeveloped, 95% held by production.
Vanguard is a Houston-based publicly traded limited liability company focused on oil and natural gas properties. Its assets consist primarily of producing and non-producing oil and natural gas reserves located in the Permian Basin in West Texas and New Mexico, the Big Horn Basin in Wyoming and Montana, the Arkoma Basin in Arkansas and Oklahoma, the Williston Basin in North Dakota and Montana, in Mississippi, and in South Texas.