Encore Energy Partners LP (NYSE: ENP) and its general partner, Vanguard Natural Resources (NYSE: VNR), agreed last week to buy producing oil and gas assets in West Texas for $85 million. The companies are splitting the bill, each forking over $42.5 million for 50% stakes.

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 (NYSE: DNR). This expanded VNR's footprint in the Big Horn Basin in Wyoming and Montana, the Williston Basin in North Dakota and Montana, the Permian Basin in West Texas and New Mexico, and the Arkoma Basin in Arkansas and Oklahoma. The acquired Encore Energy properties have estimated total proved reserves of 43.4 million BOE.

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 (Nasdaq: LINE)

6.9%

Permian Basin Royalty Trust (NYSE: PBT)

8.1%

Chesapeake Energy (NYSE: CHK)

1.3%

Source: Yahoo! Finance.

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Dan Dzombak holds no position in any company mentioned. The Motley Fool owns shares of Denbury Resources. Motley Fool newsletter services have recommended buying shares of Chesapeake Energy. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.