Vanguard Natural Resources, LLC (NASDAQ: VNR) (“Vanguard” or “the Company”) today announced that on January 31, 2014 it consummated the previously announced acquisition of natural gas and oil properties in the Pinedale and Jonah fields of Southwestern Wyoming for an adjusted purchase price of $549.1 million, subject to customary final post-closing adjustments. The effective date of the acquisition is October 1, 2013.
Significant benefits expected from the acquisition:
- Immediately accretive to distributable cash flow at closing;
- Estimated reserve life of over 20 years based on internally estimated proved reserves of 847 Bcfe;
- Properties consist of approximately 87,000 gross acres (14,000 net acres) that are currently producing approximately 113.4 Mmcfe per day with approximately 80% being natural gas, 4% oil and 16% natural gas liquids (“NGLs”);
- Reserves and daily production will increase approximately 80% and 55%, respectively;
- Approximately 2,000 producing wells;
- Additional inventory of approximately 970 proved undeveloped drilling locations;
- Approximately 5,200 additional locations not booked at this time due to the current expectation that they will not be drilled within a five year period as required by the SEC for recording proved reserves;
- 100% non-operated properties with an average working interest of 10% and partnering with two major operators in the area, Ultra Petroleum Corp. (NYSE: UPL) and QEP Resources, Inc. (NYSE: QEP);
- Expect an 8 rig drilling program, with each rig anticipated to drill 2 wells per month in 2014.
The Company funded this acquisition with borrowings under its existing reserve-based credit facility. As of January 31, 2014 and pro forma for the financing for this acquisition, the Company has borrowings under its reserved based credit facility of $935 million which leaves $365 million of undrawn capacity.