HOUSTON, Oct. 05, 2015 (GLOBE NEWSWIRE) — Vanguard Natural Resources, LLC (VNR) (“Vanguard” or “the Company”) today announced the closing of the previously announced plan of merger pursuant to which a subsidiary of Vanguard merged into LRR Energy, L.P. and, at the same time, Vanguard acquired LRE GP, LLC, the general partner of LRR Energy, L.P. (collectively, “LRR Energy”, or “LRE”) for total consideration of approximately 15.45 million Vanguard common units and the assumption of $290 million in debt. As a result of the transaction, LRR Energy and its general partner are now wholly owned subsidiaries of Vanguard. The merger was approved by the LRR Energy unitholders today in a Special Meeting vote.
Scott W. Smith, Vanguard’s President and Chief Executive Officer commented, “We are very pleased with the closing of this transaction. The assets being acquired are attractive bolt-ons to our Permian and Arkoma basin operations. We believe this transaction should have a positive impact on all aspects of our business. We welcome the LRE unitholders into Vanguard.”
Transaction Highlights
- LRE’s long-life, low-decline, mature assets are well-suited for Vanguard’s upstream MLP model;
- Proved R/P of approximately 14 years;
- Balanced production and reserves product mix of 39% oil; 48% natural gas and 13% natural gas liquids;
- Assets add additional scale in Vanguard’s existing Permian and Arkoma Basins;
- Properties more than 85% operated as measured by proved reserves;
- Significant cost savings through G&A synergies are expected;
- Strong commodity price hedge book with approximately 89% of natural gas and 80% of oil proved developed production hedged through 2018;
- Production of approximately 40 MMcfe/d, increasing Vanguard’s current production by approximately 10%;
- Proved reserves at December 31, 2014 (SEC pricing) of approximately 203 Bcfe, increasing Vanguard’s estimated proved reserves by approximately 10%;
- Approximately 1,290 gross producing wells and approximately 158,000 net acres; and
- The transaction is expected to be immediately accretive to distributable cash flow per unit.
Citigroup Global Markets Inc. acted as the exclusive financial advisor to Vanguard and Paul Hastings LLP acted as legal counsel to Vanguard. Tudor, Pickering, Holt & Co. acted as exclusive financial advisor to LRR Energy, and Andrews Kurth LLP and Richards, Layton & Finger, P.A. acted as legal counsel to LRR Energy. Simmons & Company International provided a fairness opinion to the Conflicts Committee of LRR Energy’s Board of Directors. Latham & Watkins LLP acted as legal counsel to the Conflicts Committee of LRR Energy’s Board of Directors.
About Vanguard Natural Resources, LLC
Vanguard Natural Resources, LLC is a publicly traded limited liability company focused on the acquisition, production and development of oil and natural gas properties. Vanguard’s assets consist primarily of producing and non-producing oil and natural gas reserves located in the Green River Basin in Wyoming, the Arkoma Basin in Arkansas and Oklahoma, the Anadarko Basin in Oklahoma and North Texas, the Permian Basin in West Texas and New Mexico, the Big Horn Basin in Wyoming and Montana, the Piceance Basin in Colorado, the Gulf Coast Basin in Texas, Louisiana and Mississippi, the Williston Basin in North Dakota and Montana, the Wind River Basin in Wyoming and the Powder River Basin in Wyoming. More information on Vanguard can be found at www.vnrllc.com.
