QR Energy (QRE) has signed an agreement to acquire oil-producing assets in Arkansas, Louisiana, Texas (Ark-La-Tex) and Michigan area in the US from an undisclosed private seller for $230m in cash.
QR Energy expects to fund the transaction which is expected to close by the end of April, with cash on hand and borrowings under its bank credit facility.
The company has also secured commitments to provide an additional $200m of bank loans, which will be used to fund the acquisition, if necessary.
The deal entails 150 oil producing wells and 95% of reserves in two mature oil fields in the Ark-La-Tex area, an existing core area of QR Energy.
Current net production from the assets stands at 1,178 barrels of oil equivalent per day (Boed) with 93% liquids, while total proved reserves in January were 13 million Boed, with 98% proved developed and 95% liquids.
The company stated the lengthy proved reserve life is 30.3 years and low decline rate is less than 5% per year.