NEW YORK (The Deal) -- Vanguard Natural Resources (VNR) said in a statement Monday that it agreed to buy natural gas and oil properties in the Pinedale and Jonah fields of southwestern Wyoming from an unnamed seller for $581 million, greatly boosting its reserves and daily production.
A Vanguard filing with the Securities and Exchange Commission revealed the seller as Anadarko E&P Onshore, a unit of The Woodlands, Texas-based Anadarko Petroleum (APC). The purchaser was Vanguard unit Encore Energy Partners Operating.
The properties cover 87,000 gross acres, or 14,000 net acres, and produce 113.4 million cubic feet equivalent per day with 80% being natural gas, 4% oil and 16% natural gas liquids.
Houston-based Vanguard will have a 10% average working interest in the properties, which are operated by Ultra Petroleum and QEP Resources.
Vanguard said it expects to close the purchase by Jan. 31. It will fund the acquisition with borrowings under its reserve-based credit facility.
CEO and president Scott Smith said in a statement the deal will increase the company's reserves by 80% and its daily production by 55% and give it 970 proved undeveloped drilling locations.
"Acquiring an interest in one of the country's most prolific natural gasfields, operated by companies with an unparalleled history of successful development, is a milestone event for Vanguard," he said. "This property will be an excellent addition to our portfolio of long life, mature assets and represents a great start to our 2014 acquisition program."
CFO Richard Robert said the transaction is a change in strategy for the company, which for the first time will be allocating capital to drilling wells on properties that are expected to maintain and grow cash flow for over 10 years.