The acquisition, which has been approved by the Board of Directors, is expected to close by the end of September 2007 and is subject to customary closing conditions and purchase price adjustments.
"With this acquisition we continue to show steady growth through accretive acquisitions," said John B. Walker, Chairman and CEO. "These assets give us additional growth opportunities through drilling, while our total mix of proved undeveloped reserves remains within our stated goal of 10 to 20 percent."
EVEP plans to initially finance the acquisition with bank borrowings under an amended and restated credit facility.
As a result of the acquisition, which is expected to be immediately accretive to distributable cash flow per unit, management anticipates that it will recommend to the Board of Directors a further increase in the quarterly distribution rate, beginning with the distribution for the fourth quarter of 2007 (payable during the first quarter of 2008) subject to the closing of the acquisition.
The acquisition is comprised of 142 wells (100 percent operated) producing primarily from the Yates, Seven Rivers, Queen and Morrow formations in Lea and Eddy Counties, NM, and Winkler County Texas; and the Clear Fork and Wichita Albany formations in Gaines County, TX. The properties, reserves and production include:
Natural gas ($/Mcf) ($1.10) - ($1.20) Crude oil (as % of NYMEX Crude) 90% - 95% Natural gas liquids (as % of NYMEX Crude) 60% - 65%
In conjunction with the acquisition, and consistent with its strategy of hedging a significant percentage of its production, EVEP intends to enter into arrangements to hedge a substantial portion of the acquired production volumes prior to or at closing.
Plantation's advisors were Simmons & Company International and Griffis & Associates, LLC.
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