QR Energy LP has agreed to pay $577 million to acquire oil and natural gas properties in the Permian Basin, Ark-La-Tex and Midcontinent from its sponsor, Quantum Resources Fund (QRF), the Houston-based upstream master limited partnership said Monday.
The deal, which includes the issuance by QR to QRF of $350 million of convertible preferred units and $227 million in cash, is expected to close by Oct. 1, subject to third party approvals and customary closing conditions.
The deal would bring QR 109,305 acres with proved reserves of 37.1 million boe, which are 65% proved developed and contain 41% liquids. More than 1,500 producing oil and natural gas wells are included and net production of 8,000 boe/d is expected in 4Q2011, QR said.
The assets would more than double QR’s production and reserves, according to CEO Alan L. Smith. “The properties are located in our existing core areas and offer an inventory of low-risk development projects that will supplement our production in the years to come,” Smith said.
QR had 30.4 million boe of proved reserves as of Dec. 31, 2010. Average production for 1Q2011 for the partnership’s assets in the Permian Basin, Ark-La-Tex, Midcontinent and Gulf Coast regions totaled 5,473 boe/d of crude oil and natural gas.
Last year privately held Quantum Resources Management LLC, which operates QR, agreed to pay Denbury Resources Inc. $900 million to acquire a package of gas-weighted assets in the Permian Basin of West Texas and southeastern new Mexico; the Anadarko Basin of Oklahoma, Texas and Kansas; and in East Texas (see Daily GPI, April 6, 2010). Those properties were about 66% weighted to gas, and 64% of the reserves were also gas-weighted. A large portion of the properties QR is buying from QRF were acquired in the Denbury deal, a QR spokesman told NGI Monday.
Â©Copyright 2011Intelligence Press Inc. All rights reserved. The preceding news reportmay not be republished or redistributed, in whole or in part, in anyform, without prior written consent of Intelligence Press, Inc.
© 2021 Natural Gas Intelligence. All rights reserved.
ISSN © 1532-1231 | ISSN © 2577-9877 |