QR Energy Acquires $145 Million of Oil Properties in Florida Gulf Coast Area
Jan 2, 2013 6:30:00 PM
HOUSTON, TX -- (Marketwire) -- 01/02/13 -- QR Energy, LP ("QRE" or "QR Energy") (NYSE: QRE) announced today that it has acquired $145 million of oil properties located in the Jay field in the Florida Gulf Coast area from its sponsor, Quantum Resources Fund. The transaction closed on December 28, 2012 and was financed with cash on hand and borrowings under its bank credit facility.
Transaction Highlights
Expected to be immediately accretive to Distributable Cash Flow; 2013 Adjusted EBITDA for acquired properties expected to exceed $35 million
Mature, legacy asset with significant oil in place located in a core area; adds to QRE's 7.4% overriding oil royalty interest in the Jay field
Current net production of approximately 2,500 Boed is 90% oil and 10% NGLs; 100% operated
Estimated total proved reserves of 11.3 MMBoe as of December 31, 2012 are 100% proved developed (76% proved developed producing); 87% oil and 13% NGLs
Low-risk estimated probable reserves of more than 4.0 MMBoe as of December 31, 2012
Lengthy proved reserve life (R/P) of 12.4 years; low decline rate of approximately 9% per year
Low-risk development opportunities include optimizing tertiary recovery by increasing throughput, performing well cleanouts and enhancing plant processing capabilities
Estimated maintenance capital expenditures of approximately $11 million per year
Expect approximately $3 million per year in incremental general and administrative expenses
Significant percentage of acquired production hedged through 2017
Borrowing base expected to increase from $730 million to $900 million based on Jay and recent East Texas acquisitions
Chief Executive Officer Alan L. Smith commented, "This acquisition allows the partnership to own a world class oil field with significant remaining reserves, a low decline and a long reserve life. We expect the high liquids content and premium Louisiana Light Sweet crude oil pricing to deliver high margins and significant accretion to our unitholders."
