Vanguard to Purchase Shale Assets in Arkoma Basin
Vanguard Natural Resources, LLC has entered into a definitive agreement to acquire natural gas and liquids assets in the Woodford Shale and Fayetteville Shale of the Arkoma Basin for a purchase price of $445 million from Antero Resources. The effective date of the acquisition is April 1, 2012 and the Company anticipates closing this acquisition on or before June 29, 2012.
Scott W. Smith, President and Chief Executive Officer, commented, "As we stated on our last conference call, we believe it’s a great time to purchase natural gas assets and we believe this transaction will prove to be an excellent addition to our portfolio. This acquisition is primarily natural gas with some associated liquids and has an existing hedge book that will allow us to achieve above market pricing for the next several years. With this acquisition, we have established a new operating area which we believe has potential for future growth through other acquisitions as well as development drilling as natural gas prices improve."
Significant benefits expected from the acquisition:
Immediately accretive to distributable cash flow;
The Company intends to fund this acquisition with borrowings under its existing reserve-based credit facility. Vanguard has requested that the banks perform an interim borrowing base redetermination to include the properties from this acquisition and anticipate an increase of approximately $300 million to the current borrowing base to take into account the additional value of the assets being acquired. Pro forma for the borrowing base increase, the Company expects to have liquidity in excess of $200 million after closing.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
Most Popular Articles
From the Career Center
Jobs that may interest you