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Denbury Resources Inc. Message Board

  • dkwilk dkwilk Feb 28, 2013 11:17 AM Flag

    Vanguard buy Resources from Range

    HOUSTON (AP) -- Vanguard Natural Resources LLC is buying natural gas and oil assets in the Permian Basin for $275 million.

    The company, which focuses on the acquisition, production and development of oil and natural gas properties, is buying the assets from independent oil and natural gas producer Range Resources Corp. Vanguard already has oil and natural gas reserves in the Permian Basin, which is located in West Texas and New Mexico.

    "These properties are a nice complement to one of Vanguard's core operating areas and have some excellent behind pipe and development drilling opportunities that will enhance our cash flow as they are developed over the next four to six years," Mark Carnes, Vanguard's director of acquisitions, said in a statement on Thursday.

    Vanguard said that it plans to fund the deal with borrowings under an existing credit facility.

    The acquisition is expected to close by April 1.

    The Houston company's stock fell 2 cents to $27.74 in morning trading. Range Resources rose 38 cents to $74.58

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    • Hadn't seen that. The more I look at the Permian, seems it should be owned as a core position. PXD looks like they have years of drill inventory. Another way to play it is the midstream side, Atlas Pipeline, APL. an MLP. Dist this year, $2.60, 8% yield. Could be pushing $4 in a couple of years. That's 12% yield at $33 price. They are partnered with PXD and can't keep ahead of their drilling, more capital with the Sinopec JV. At $4 and 5% yield, could be an $80 unit price. Looks like a double potential at least. Moving to more fixed fee revenue, will increase W TX capacity from 255mcf/d to 455mcf/d in the Q2. Also have good positions in Miss Lime, Woodford Cana. Their expansion projects are 20 to 25% IRRs. ATLS is GP but this looks like a good bet as well, ATLS has the e and p exposure with ARP. Looks like a good way to play the Permian.

 
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