Vanguard to buy Bill Barrett’s Piceance Basin oil and gas assets

Vanguard Natural Resources has agreed to acquire natural gas, oil and natural gas liquids (NGLs) assets in the Piceance Basin in Colorado from Bill Barrett for $525m.

The company will buy 12,000 net acres that are currently producing around 67 million cubic feet equivalent per day.

Of the total production, 76% is natural gas, 5% is oil and 19% is natural gas liquids.

The acquisition includes expected reserve life of around 16 years based on internally estimated proved reserves of approximately 389 billion cubic feet equivalent.

It also includes an average working interest of 78% in around 950 producing wells, 119 recompletion projects and 94 proved undeveloped vertical drilling locations.

The transaction is expected to be completed by 1 October 2014.

Vanguard Natural Resources president and CEO Scott Smith said: "With this acquisition, we are acquiring the balance of the working interest in properties where we first established a non-operated position in December 2012.

"We will be taking over operations of 950 producing wells in a very large, prolific natural gas basin with an established infrastructure in place and multiple pipeline outlets to market our production.

"As the operator and majority interest owner in the assets, we can now govern the pace of development of both recompletion opportunities and development drilling projects to take advantage of positive changes in market conditions."

Vanguard has hedged a part of the natural gas production through 2017 and aims to opportunistically hedge the rest of the expected natural gas, oil and NGL production for 2015 through 2017.

Vanguard acquires, produces and develops oil and natural gas properties with primary assets located in various US states.