Vanguard Natural Resources announced that on December 2, 2009 it closed its previously announced acquisition of certain producing oil and natural gas properties in the Permian Basin from private sellers. After preliminary purchase price adjustments based on an effective date of October 1, 2009, Vanguard paid $55 million in cash. The purchase price was funded from borrowings under our reserve-based credit facility. In conjunction with this acquisition, the Company requested that lenders under our reserve-based credit facility perform an interim borrowing base redetermination. Pursuant to this interim redetermination, our borrowing base was increased from $170 million to $195 million.
The acquired properties have total estimated proved reserves of 3.2 million barrels of oil equivalent as of October 1, 2009, of which 83% is oil and 65% is proved developed. Vanguard will operate all but one of the wells acquired in this transaction which are located in Ward County, Texas. Based on the current net daily production of approximately 780 Boepd, the properties have a reserve to production ratio of approximately 11 years.
Mr. Scott W. Smith, President and CEO of Vanguard commented, "With the closing of this acquisition we will have increased our current total production by approximately 20% and increased our oil reserves by 74%. After consideration of the oil hedges that we have put in place through 2013, these assets will be a meaningful contributor to our cash flows for years to come."
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