Vanguard Natural strikes $445mn deal for gas assets of Antero Resources | WPN World People News

US oil and gas producer Vanguard Natural Resources has struck a $445 million deal to acquire natural gas and liquid assets of independent exploration and production company Antero Resources.

The assets include 66,000 net acres in Oklahoma's oil-rich Woodford Shale and 5,300 net acres in the Fayetteville Shale of the Arkoma Basin in Arkansas, the company announced Monday.

The acquired assets are primarily natural gas (91%) with some associated liquids, are estimated to hold reserves of approximately 420 billion cubic feet equivalent (58% proved developed and 82% natural gas).

The current net production is approximately 76 million cubic feet equivalent per day (91% natural gas) from 833 gross wells (134 producing wells to be operated by Vanguard in the Woodford Shale).

Chief Executive Scott W. Smith said the deal establishes Vanguard in a new area where it sees great potential for future growth as weakened natural gas prices improve.

"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," Smith said.

Last month while reporting first-quarter results, Vanguard had indicated plans for acquiring assets.

The company said the deal, expected to close by June 29, will immediately add to its distributable cash flow.

Despite the sharp drop in natural gas prices in the US due to a glut in production, Vanguard said this was "a great time" to purchase natural gas assets.

A glut has sent U.S. natural gas prices plummeting down to their lowest in a decade. Vanguard is however optimistic of the prices rising over the next few years.

The company intends to fund this acquisition with borrowings under its existing reserve-based credit facility.

Source: United States News.Net