Vanguard Natural Resources has entered into an agreement to acquire producing oil and gas assets in Mississippi, Texas and New Mexico for $113.1m from a private seller.
The properties to be acquired have estimated total proved reserves of 4.7 million barrels of oil equivalent, of which approximately 96% are oil reserves and 61% are proved developed.
At closing of this transaction later this month, net production attributable to the assets being acquired will be approximately 850boe/d. The company anticipates closing this acquisition on or before May 27, 2010.
Scott Smith, president and CEO of Vanguard, said: “This acquisition of primarily oil properties has all the attributes we are looking for as we continue to profitably grow the company. The margins associated with the oil production are extremely high due to the very low operating costs and we have an inventory of proven behind pipe opportunities and proved undeveloped locations that we and our operating partners intend to develop over the next three to four years.
“With this level of activity, we believe we can invest a relatively small percentage of our cash flow and still maintain the production rate from these properties over this period.”