Houston-based Vanguard Natural Resources LLC on Friday made an offer valued at about $567 million to buyout the remaining stake of Encore Energy Partners LP (ENP), about 54%, that it doesn't already own.
Based on Vanguard's offer, ENP is valued is about $1.05 billion.
ENP formerly was affiliated with Fort Worth, TX-based Encore Acquisition Co., which created the partnership in 2007. Denbury Resources Inc. in March 2010 completed a $4.5 billion transaction to purchase Encore Acquisition (see Daily GPI, Nov. 9, 2009).
Vanguard in turn late last year paid Denbury $380 million to buy a 46% stake in ENP, which included the full interest in the general partner and a 54% stake in the common units of the master limited partnership (see Daily GPI, Nov. 18, 2010). If the latest transaction is approved ENP would become a subsidiary of Vanguard.
A proposal was submitted to the conflicts committee of the board of directors of ENP's general partner "to purchase all of all of ENP's outstanding publicly held units through a unit-for-unit exchange." Subject to a definitive agreement, Vanguard is offering 0.72 of a Vanguard common unit for an ENP common unit.
Vanguard operates oil and gas properties in the southern portion of the Appalachian Basin, as well as oil and gas properties in the Permian Basin, South Texas and in Mississippi.
ENP has drilling under way in the Big Horn Basin of Wyoming and Montana, as well as in the Williston Basin in North Dakota, the Permian Basin of Texas and New Mexico, and the Arkoma Basin in Arkansas and Oklahoma.
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