Vanguard Natural Resources LLC (VNR) said it will buy all of
fellow oil-and-gas explorer Denbury Resources Inc.'s (DNR) interest
in Encore Energy Partners LP (ENP) for about $380 million.
Vanguard may choose to pay up to $80 million of the total
purchase price in equity. When the deal closes, Vanguard will own
Encore's general partner and about 46% of Encore's common units.
Vanguard said it plans to continue to operate the entities
independently after the deal is done, and the companies will
maintain separate boards.
Denbury has been shedding assets it acquired with its purchase
of slightly smaller rival Encore Acquisition Co. earlier this year
in a deal valued at about $3.25 billion, seeking to reduce leverage
and focus capital on core areas. In October, it sold off its
Haynesville and East Texas natural-gas assets to an unidentified
company for about $217.5 million.
"We are excited about the prospects of acquiring Encore's
general partner and becoming a significant unitholder of the
limited partnership " said Vanguard President and Chief Executive
Scott W. Smith. "This acquisition furthers our plan to increase
exposure to oil-focused assets."
Vanguard earlier this month said its third-quarter earnings more
than doubled on fewer derivative losses. Meanwhile, Denbury said
profit increased 8.3% as revenue climbed, while Encore's earnings
slid 67% on derivatives impacts.
Equity of all three was inactive premarket.
-By Nathan Becker, Dow Jones Newswires; 212-416-2855;
nathan.becker@dowjones.com