The properties to be acquired have total estimated proved reserves of 4.4 million barrels of fuel oil equivalent, of which approximately 83% is oil and 90% is proved developed and includes both operated and non-operated wells.
Vanguard said that the properties have a reserve to production ratio of approximately 15 years, based on the current net daily production of approximately 810 barrels of oil equivalent per day.
The acquisition is expected to close in the first quarter of 2008. At closing, Vanguard will assume West Texas Intermediate (WTI) oil swaps for approximately 90% of the estimated 2008 through 2011 oil production, which effectively fixes the sales price on that portion of the production at a weighted average price of $87.29 per barrel.
Scott Smith, CEO and president of Vanguard, said: This acquisition is an excellent start to our stated goal of disciplined growth through accretive acquisitions. This transaction balances our commodity mix and provides an entry into a prolific producing basin with reserve attributes that fit our business model, being long-lived, mature oil and gas properties.
