leadf
logo-loader
viewQR Energy LP

QR Energy buys US liquids properties for $230 mln

oil_350_4f6732c72f46c.jpg

Oil producer QR Energy (NYSE:QRE) said Monday it has agreed to purchase oil properties in the Ark-La-Tex area in the US, as well as in Michigan, for $230 million cash from an unnamed seller.

The Ark-La-Tex region is at the intersection of Arkansas, Louisiana, Texas and Oklahoma.

Houston, Texas-based QR Energy, through its subsidiary QRE Operating LLC, engages in the acquisition and production of on-shore crude oil and natural gas properties in the United States.

The transaction, which is subject to price adjustments, is expected to close in late April, subject to customary closing conditions.

The deal includes around 150 producing wells, and roughly 95 percent of the reserves are found in two mature oil fields in the Ark-La-Tex area, which is an existing core area of QR Energy.

About 93 percent of the net production from the assets – or about 1,178 barrels of oil equivalent per day – is liquids, said QR Energy.

As of January 1, QR Energy said the assets have estimated total proved reserves of 13 million barrels of oil equivalent, with 98 percent proved developed and 95 percent liquids.

The company noted that the lengthy proved reserve life is 30.3 years, with a low decline rate of less than five percent a year.

"These oily, low decline, long life properties are an ideal fit for our MLP strategy and will enhance our liquids inventory in the Ark-La-Tex area," chief executive Alan L. Smith said in a statement.

"We expect this bolt-on transaction to be immediately accretive to distributable cash flow and to supplement cash flow from our existing portfolio over the next several years."

QR Energy expects to finance the deal with cash on hand and borrowings under its bank credit facility. The company has also secured commitments to provide an extra $200 million of bank loans, which are available to fund the acquisition, if necessary.

The company’s share price closed Friday at $22.36 in trade in New York. Its stock was inactive during pre-market trade on Monday.

Quick facts: QR Energy LP

Price: - -

NYSE:QRE
Market: NYSE
Market Cap: -
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

One2One Investor Forum - September 23 C-Bond Systems

One2One Investor Forum - September 23 C-Bond Systems featuring Vice President of Corporate Communications, Allison Tomek                                                 ...

7 hours, 52 minutes ago

2 min read