Encore Energy Partners LP
The acquired assets have estimated net total proved reserves of 2.74 million barrels of oil equivalent, of which roughly 70% are oil and natural gas liquids.
This continues a history of acquisitions by Vanguard Natural Resources.
On Dec. 31, 2010, Vanguard acquired 46% of Encore Energy LP and its general partner interest for $380 million from Denbury Resources
On May 20, 2010, Vanguard acquired assets in Mississippi, Texas, and New Mexico from a private seller for $114.6 million. The properties had reserves of 4.7 million barrels of oil equivalent.
Vanguard Natural Resources' status as a limited liability company is a competitive advantage versus other oil and gas companies. The LLC structure means the company must pay out the majority of its distributable cash flow to investors, but by doing so the company avoids the taxation corporations get hit with. Because of this, Vanguard is able to pay a higher price for an acquisition than a competitor is willing to pay, and still receive a good return on investment.
For investors, it also means a sizable yield. Check out Vanguard's yield and those of its competitors.
Company |
Yield |
---|---|
Vanguard Natural Resources |
8.5% |
Encore Energy Partners LP |
9.5% |
Linn Energy |
6.9% |
Permian Basin Royalty Trust |
8.1% |
Chesapeake Energy |
1.3% |
Source: Yahoo! Finance.
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