QR Energy LP (NYSE: QRE) is an independent oil & gas producer that seeks out mature producing fields, buys them, and then tries to make them pay off either by lowering production costs or by effective hedging. In the fourth quarter of 2011, QR Energy completed a $579 million acquisition of assets from its sponsor, Quantum Resources Fund.
The company announced today that it was purchasing another $230 million worth of assets from an unnamed private owner. The assets being acquired currently produce about 1,178 barrels of oil equivalent/day, 93% of which is liquids. The transaction is all cash, nearly all of which will be borrowed. On the company’s annual Form 10-K filed last week, cash and equivalents totaled less than $17.5 million. Here’s what QR said in the press release announcing the acquisition:
The transaction is expected to be financed with cash on hand and borrowings under its bank credit facility. QRE has also secured commitments to provide an additional $200 million of bank loans, which are available to fund the purchase price of the acquisition if necessary. The transaction is expected to close in late April, subject to customary closing conditions.
Shares closed at $22.36 on Friday and are trading down nearly -5% in the pre-market at $21.20 this morning.
Paul Ausick
Find a Qualified Financial Advisor (Sponsor)
Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to 3 fiduciary financial advisors in your area in 5 minutes. Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests. If you’re ready to be matched with local advisors that can help you achieve your financial goals, get started now.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
