Vanguard To Buy Natural Gas & Liquids Properties In Piceance Basin In Colorado

(RTTNews) - Vanguard Natural Resources, LLC (VNR) has agreed to acquire natural gas, oil and natural gas liquids or NGLs assets in the Piceance Basin in Colorado for $525 million from Bill Barrett Corp. The properties include nearly 12,000 net acres that are currently producing about 67 MMcfe per day, after consideration of ethane rejection, with around 76% natural gas, 5% oil and 19% NGLs. The effective date of the acquisition is July 1, 2014 and the firm plans to complete this acquisition on or before October 1, 2014.

Scott Smith, President and Chief Executive, commented, "With this acquisition we are acquiring the balance of the working interest in properties where we first established a non-operated position in December of 2012. We will be taking over operations of 950 producing wells in a very large, prolific natural gas basin with an established infrastructure in place and multiple pipeline outlets to market our production. As the operator and majority interest owner in the assets, we can now govern the pace of development of both recompletion opportunities and development drilling projects to take advantage of positive changes in market conditions."

The acquisition is immediately accretive to distributable cash flow at the time of completion, with estimated reserve life of nearly 16 years based on internally estimated proved reserves of approximately 389 Bcfe; and current net production of about 67 MMcfe/d after considering ethane rejection. The company would fund this acquisition with borrowings under its existing reserve-based credit facility.

Richard Robert, Executive Vice-President and Chief Financial Officer, stated, "We are anticipating significant benefits from this transaction including improved distribution coverage and accelerating our ability to resume our slow and steady distribution growth policy."