Encore To Buy $53 Million In Oil-producing Land

FORT WORTH, Texas (AP) — Encore Energy Partners LP said Monday it will purchase $53.8 million of oil-producing land in Texas, Montana and North Dakota that includes over 100 oil wells.

The company plans to purchase lands in Val Verde County, Texas, for $28 million in cash and other properties in Montana and North Dakota for $25.8 million. The transaction, which is expected to close by June 1, should increase earnings immediately, the company said in a statement.

Encore said it expects the transaction to increase its distributable cash flow rate to $2.05 per share from $2 for the second quarter of 2009.

In a separate announcement, Encore said it plans to make a public offering a 2.4 million common shares to help pay for the properties. Encore granted the underwriters a 30-day option to purchase up to an additional 360,000 common units, if needed.

Shares of Encore Energy Partners LP fell $1.24, or 7.5 percent, to $15.33 in after-hours trading Monday. In the regular session earlier, the stock gained 17 cents to close at $16.57.