QR to Acquire Acreage in Permian, Ark-La-Tex, Mid-Continent

- QR to Acquire Acreage in Permian, Ark-La-Tex, Mid-Continent

Monday, September 12, 2011
QR Energy, LP

QR Energy, LP ( QRE) announced Monday that it has signed a definitive agreement to acquire oil and natural gas properties from its sponsor, Quantum Resources Fund (QRF) for a purchase price of $577 million. The transaction consists of the issuance by QRE to QRF of $350 million of Convertible Preferred Units and cash of $227 million from borrowings under QRE's existing bank credit facility, subject to lender approval of an increase in the facility's borrowing base. The transaction is expected to close on or about October 1, 2011, subject to third party approvals and customary closing conditions.

Transaction Highlights

-- Properties located in existing core areas: Permian Basin, Ark-La-Tex and Mid-Continent

-- Net production of 8,000 Boed expected for the fourth quarter of 2011

-- Total proved reserves of 37.1 MMBoe are 65% proved developed and 41% liquids (oil and NGLs)

-- More than 1,500 producing oil and natural gas wells

-- Inventory of low risk development opportunities

-- Reserve life (R/P) of 12.7 years

-- 77% operated by value based on standardized measure

-- Expected to be immediately accretive to Distributable Cash Flow per unit

Chief Executive Officer Alan L. Smith commented, "This acquisition from our sponsor has assets that fit our investment criteria of mature, longer life properties and more than doubles QR Energy's production and reserves. The properties are located in our existing core areas and offer an inventory of low risk development projects that will supplement our production in the years to come. We are pleased to be able to finance the transaction with a combination of equity and bank debt, and we expect the transaction to deliver significant accretion to our unitholders."

Asset Profile

QR Energy estimates that the acquisition properties contain approximately 37.1 MMBoe of proved reserves as of October 1, 2011, based on internal estimates using spot oil and natural gas prices as of September 2, 2011 ($86.48/Bbl and $3.87/MMBtu). The proved reserves are 65% proved developed and contain 41% liquids. Operations include 1,574 gross and 960 net wells on approximately 109,305 net acres concentrated in Texas, Oklahoma and New Mexico. They provide numerous low risk development opportunities.

Transaction Financing

As part of the total consideration, QR Energy will issue to QRF $350 million of Convertible Preferred Units (16.7 million units) at a par value of $21.00 per unit. For the first three years, the Convertible Preferred Units will receive a quarterly cash distribution equal to a 4.0% annual coupon on the par value of $21.00. After three years, the quarterly cash distribution will be equal to the greater of (a) $0.475 per unit or (b) the cash distribution payable on each common unit for such quarter.

QRF may convert the Convertible Preferred Units to common units on a one-to-one basis during the first two years after the issuance date following 30 consecutive trading days during which the volume-weighted average price for common units equals or exceeds $27.30 per common unit. In addition, QRF may convert the Convertible Preferred Units to common units on a one-to-one basis anytime after two years from the issuance date.

If QRF has not converted the Convertible Preferred Units to common units by the third anniversary, QR Energy may force their conversion at $21.00 provided that conversion is in the 30 calendar days following 30 consecutive trading days during which the volume-weighted average price for common units equals or exceeds (1) $30.00, provided that (a) an effective shelf registration statement covering re-sales for the converted units is in place or (2) $27.30, provided that (a) from directly above is satisfied plus (b) the arrangement for one or more investment banks to underwrite the converted unit sale following conversion (with proceeds equal to not less than $27.30 less (i) a standard underwriting discount and (ii) a customary discount not to exceed 5% of $27.30). For both (1) and (2) above, the conversion will have a value of not less than $100 million in the aggregate (provided that if less than $100 million remains outstanding, such conversion will relate to all remaining Class C Convertible Preferred Units then outstanding).

QR Energy may force conversion after the fifth anniversary at $21.00 and (a) in the 30 calendar days following 30 consecutive trading days during which the volume-weighted average price for common units equals or exceeds $27.30 and (b) subject to having an effective shelf registration statement covering re-sales for the converted units in place. The conversion will have a value of not less than $100 million in the aggregate (provided that if less than $100 million remains outstanding, such conversion will relate to all remaining Class C Convertible Preferred Units then outstanding).

The debt financing for the transaction is estimated to be approximately $234 million including estimated transaction fees, which will be funded with borrowings under the Partnership's revolving credit facility. These borrowings are subject to lender approval of a $300 million increase in QR Energy's borrowing base related to the pending acquisition of additional oil and gas properties, resulting in a total borrowing base of $630 million effective upon closing.

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Bering IDs New Prospect in Permian Basin

- Bering IDs New Prospect in Permian Basin

Wednesday, August 03, 2011
Bering Exploration Inc.

Bering has identified a new prospect through its exclusive partnership with Glaux Oil & Gas, LLC (Glaux) that covers 500,000 acres in the Permian Basin. This new prospect of approximately 640 acres has potential gross reserves of 950,000 barrels of oil and, based upon today's prices, equates to $88 million dollars of gross revenues or $3.50 per share. There is no guarantee that this prospect will be successful or that these numbers will be achieved due to production and/or price fluctuations. Bering is currently conducting its technical assessment and once satisfactorily completed will begin leasing the mineral rights. Bering expects to initially retain a100% working interest.

This prospect was the first identified as a result of its recently announced three year exclusive exploration agreement with Glaux for the development of numerous leads and prospects in approximately 500,000 gross acres in West Texas using a proprietary aeromagnetic survey. Once leased, Bering will use other advanced oil finding technologies such as telluric and seismic to identify well locations.

The Permian Basin is one of the largest and most active oil basins in the United States, with the entire basin accounting for approximately 19 percent of total U.S. oil production. The Permian Basin remains a significant oil-producing province and contains an estimated 30 Billion barrels of remaining mobile oil and has the biggest potential for additional oil production in the country, containing 29% of estimated future oil reserve growth. Through increased use of enhanced-recovery practices the Permian Basin can have a substantial impact on U.S. oil production.

"We are excited to have our initial prospect generated by Glaux and expect to begin the leasing phase later this month," stated Steven Plumb, VP of Finance of Bering. "Our exclusive relationship with Glaux has provided us with this quality prospect that has been identified using unique and exciting technologies."

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Vanguard, Encore Finalize Permian Basin Acquisition

- Vanguard, Encore Finalize Permian Basin Acquisition

Monday, August 01, 2011
Vanguard Natural Resources, LLC

Vanguard and Encore Energy announced that on July 29, 2011 they consummated the previously announced joint acquisition of oil and natural gas producing properties from an undisclosed seller for an adjusted purchase price of $81.4 million, subject to customary post-closing adjustments. The effective date of the acquisition was May 1, 2011.

The acquired properties are all located in the Permian Basin of West Texas and include:

• Estimated total net proved reserves of 5.48 MMboe
• 70% oil and natural gas liquids
• Reserve to production ratio of approximately 15 years
• Approximately 1,000 Boe/d of net daily production

In conjunction with this acquisition, both VNR and ENP have entered into new oil and natural gas hedges covering a substantial portion of the estimated production through 2014.

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American Standard Spuds 2nd Well in Permian Basin Program

- American Standard Spuds 2nd Well in Permian Basin Program

Monday, July 25, 2011
American Standard Energy Corp.

American Standard announced 2nd spud for 10 net well drilling program in Andrews County, Texas.

The JW #5 rig is on location, rigging up and is expected to spud within 24 hours on the University 8 #1 location in Andrews County, Texas.

The Company intends to drill the University Andrews 8 #1 well to the Strawn and completed in the Strawn, Wolfcamp, Spraberry and Lower Clearfork formations. The Company will own 100% working interests in all 10 wells.

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American Standard Adds Rig for Permian Basin Drilling Program

- American Standard Adds Rig for Permian Basin Drilling Program

Thursday, July 21, 2011
American Standard Energy Corp.

American Standard announced the addition of a second rig for its 10 net well drilling program in Andrews County, Texas.

ASEN has secured the JW Rig #5 which will be moving onto the University 8 #1 location this week in Andrews County and is expected to spud Monday July 25th.

The Viking Rig #20 initiated the 10 net well drilling program and has spud the University 42 #2 well in Andrews County.

ASEN intends to drill the University Andrews 42 #2 well to the Devonian and then subsequent wells will be drilled to the Strawn and completed in the Strawn, Wolfcamp, Spraberry and Lower Clearfork formations. The Company will own 100% working interests in all 10 wells.

ASEN will have these dedicated two Rigs for the duration of this Phase 1 of our Permian Basin development program and expects to maintain them for future Phases. With the addition of the second rig, we project completion of this project to be cut by three months.

Scott Feldhacker, CEO of ASEN commented, "With over 4000 permits filed by various operators in the Permian Basin this year to date ASEN is demonstrating its abilities to aggregate the services needed to develop its assets in a marketplace of high demand."

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American Standard Kicks Off Permian Basin Drilling Program

- American Standard Kicks Off Permian Basin Drilling Program

Wednesday, July 13, 2011
American Standard Energy Corp.

American Standard has commenced a 10 net well drilling program in Andrews County, Texas.

ASEN plans to drill the University Andrews 42 #2 well to the Devonian formation and then subsequent wells will be drilled to the Strawn formation and completed in the Strawn, Wolfcamp, Spraberry and Lower Clearfork formations. The Company will own 100% working interests in all 10 wells.

The Company anticipates the Viking Rig #20 to move in the latter part of this week to the University Andrews 42 #2 well to begin this drilling program.

ASEN has engaged Cambrian Management, Ltd. ("Cambrian") to oversee the drilling program and completion of these wells. Cambrian is widely recognized in the industry for its track record for highly successful drilling and completion of Wolfberry wells in the Permian Basin over the past 10 years.

Upon completion, ASEN's wells will be turned over to our affiliated partner XOG Operating for ongoing operations. Utilizing this relationship for our operations will provide cost control and reliable operations with a seasoned operator with 30 years of experience operating in the Permian Basin of west Texas.

ASEN currently produces over 800 barrels of oil equivalent per day (BOEPD) from 27.67 net wells in the Permian, Bakken and Eagle Ford combined. This initial drilling program is expected to increase our net well count by more than 35%, and is expected to increase daily production by more than 100% in the first quarter 2012, to a projected cumulative production of approximately 2,000 BOEPD.

Scott Feldhacker, CEO of ASEN commented on the potential impact of this drilling program on the Company's growth outlook. "We are optimistic that these 10 wells will have a significant impact on the growth prospects for ASEN. We hold a high number of potential drilling sites in the Permian today with 100% working interests, which allow ASEN to control its growth outlook and capital budget expenditures."

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Crosstex Energy, Apache to Jointly Invest in Permian Basin Facility

- Crosstex Energy, Apache to Jointly Invest in Permian Basin Facility

Tuesday, July 12, 2011
The Crosstex Energy Cos

The Crosstex Energy companies announced a partnership with Apache to jointly invest $85 million in a new-build natural gas processing facility in the Permian Basin in West Texas. The initial phase of the project will provide interim and long-term processing solutions, compression and residue gas takeaway for Apache's Deadwood development in Glasscock County. Crosstex and Apache will fund the processing project equally and each hold a 50 percent working interest. Separately, Crosstex will buy and upgrade a nearby rail terminal to provide transportation of natural gas liquids (NGL) to its Eunice fractionation facility in southern Louisiana.

Initially, Crosstex and Apache will install a refrigeration plant with a capacity of 20 million cubic feet (MMcf) per day as an interim gas processing solution, compression and takeaway, all of which are expected to be operational by the fourth-quarter 2011. A cryogenic gas processing facility with a capacity of 50 MMcf per day is expected to be operational in the second-quarter 2012. Crosstex will manage construction and operate the facilities.

"Crosstex is excited to embark on this joint interest project with Apache, a premier independent energy company that has operated in the Permian Basin in West Texas for nearly 20 years and is one of the largest producers in the region with an active drilling program. We are extremely pleased Crosstex can provide Apache with creative midstream solutions for their gas and NGL products," said Barry E. Davis, Crosstex President and Chief Executive Officer. "We look forward to continuing our long-term working relationship with Apache.

"This transaction provides Crosstex with a significant footprint for future growth in the Permian Basin area where we will pursue additional business opportunities," Davis added.

Additionally, Crosstex will purchase and upgrade the abandoned Patriot Fractionator in Midland County. The facility will be upgraded and refurbished to initially serve as a rail terminal for Apache raw make NGL. Crosstex will transport NGL via rail to its Eunice fractionation facility in south central Louisiana for fractionation and sales. Product will be delivered to the Mesquite terminal via existing NGL pipelines or by trucks. Crosstex will invest $12 million in the project, which is scheduled to be completed and operational in the fourth-quarter 2011. This facility will provide NGL takeaway for the constrained Permian infrastructure until a long term pipeline solution becomes available.

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Encore, Vanguard Purchase Permian Basin Assets

- Encore, Vanguard Purchase Permian Basin Assets

Thursday, June 23, 2011
Encore Energy Partners LP

Encore has entered into a definitive agreement to acquire an undivided fifty percent interest in producing oil and gas assets in the Permian Basin of West Texas for a net purchase price of $42.5 million from a private seller. The other fifty percent interest in the assets is being acquired by Vanguard Natural Resources for $42.5 . Vanguard is the general partner of ENP. The interests to be acquired by ENP have estimated total net proved reserves of 2.74 million barrels of oil equivalent, of which approximately 70% are oil and natural gas liquids reserves. The properties being acquired are 100% proved developed. At closing of this transaction, net production to ENP attributable to the assets being acquired should be approximately 500 Boe/d. The effective date of the acquisition is May 1, 2011 and the Company anticipates closing this acquisition on or before August 1, 2011.

Scott W. Smith, President and Chief Executive Officer, commented, "This acquisition is an excellent MLP type asset and is a great addition to our Permian Basin portfolio. This acquisition was done jointly with Vanguard Natural Resources, LLC pursuant to the Business Opportunity Policy in place between the two companies. These assets are expected to generate very stable cash flows and production for the next several years. Upon execution of the purchase and sale agreement for this transaction, we entered into hedges covering a substantial portion of the estimated production from this acquisition for the next several years."

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Bering IDs Prospect in Permian Basin

- Bering IDs Prospect in Permian Basin

Monday, May 16, 2011
Bering Exploration Inc.

Bering has identified its initial West Texas prospect in the Permian Basin which has potential gross reserves of 600,000 barrels of oil or $60 million based upon current prices. This prospect is approximately 640 acres and will target the Sprayberry formation at a depth of approximately 9,000 feet. Bering is currently conducting its technical assessment and once satisfactorily completed will begin leasing the mineral rights. Bering expects to initially retain a100% working interest.

This prospect was the first identified as a result of its recently announced three year exclusive exploration agreement with Glaux Oil & Gas, LLC (Glaux) for the development of numerous leads and prospects in approximately 500,000 gross acres in West Texas using a proprietary aeromagnetic survey. Once leased, Bering will use other advanced oil finding technologies such as telluric and seismic to identify well locations.

The Permian Basin is one of the largest and most active oil basins in the United States, with the entire basin accounting for approximately 19 percent of total U.S. oil production. The Permian Basin remains a significant oil-producing province and contains an estimated 30 Billion barrels of remaining mobile oil and has the biggest potential for additional oil production in the country, containing 29% of estimated future oil reserve growth. Through increased use of enhanced-recovery practices the Permian Basin can have a substantial impact on U.S. oil production.

"We are excited to have our initial prospect selected and expect to begin the leasing phase later this month," stated Steven Plumb, Chief Financial Officer of Bering. "Our exclusive relationship with Glaux is providing us with quality prospects that have been identified using very unique and exciting technologies."

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Legacy Adds Permian Assets

Legacy Adds Permian Assets

Thursday, May 05, 2011
Legacy Reserves LP

Legacy Reserves LP has closed the previously announced acquisition of Permian Basin natural gas properties for $66.1 million in cash, excluding revenue suspense and subject to customary post-closing adjustments.

The properties include 126 wells, 100 of which are operated, that are located in Eddy and Chaves Counties, New Mexico. In addition, the acquisition encompasses a natural gas gathering system and related compression facilities gathering gas from the acquired wells and some third party wells. Legacy estimates net daily sales of 7.6 MMcf of natural gas, 397 Bbls of NGLs, and 4 Bbls of oil, as well as proved reserves of 40.7 Bcfe.

All of the evaluated reserves from this pending acquisition are considered proved developed producing ("PDP"). There are also multiple locations included in this acquisition that will be evaluated for future drilling.

Legacy Reserves LP is an independent oil and natural gas limited partnership headquartered in Midland, Texas, focused on the acquisition and development of oil and natural gas properties primarily located in the Permian Basin, Mid-Continent and Rocky Mountain regions of the United States.

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W&T Offshore to Add Acreage in West Tx. Permian Basin

W&T Offshore to Add Acreage in West Tx. Permian Basin

Tuesday, April 26, 2011
W&T Offshore Inc.

W&T Offshore has entered into a purchase and sale agreement with private sellers to acquire approximately 21,900 gross leasehold acres (21,500 net acres) in the West Texas Permian Basin for a purchase price of $366 million, subject to adjustments and an effective date of January 1, 2011. The reserves are over 91% oil and natural gas liquids. At January 1, 2011, estimates of proved reserves to be acquired are approximately 27 million barrel equivalents (164 Bcfe); and, estimates of proved and probable reserves to be acquired are approximately 53 million barrel equivalents (318 Bcfe) (both using a 6 to 1 Mcf to barrel equivalency). The current wells produce around 2,800 barrel equivalents per day. Since the effective date of the proposed acquisition, production has increased from about 1,900 barrel equivalents. The sellers have three active rigs drilling in the field and ongoing completions are being made on the new wells. We expect to keep at least three rigs working in the field throughout the remainder of 2011. Accordingly, we would expect daily production to increase.

There is significant upside potential in the acquisition with hundreds of proved undeveloped and probable well locations. Capital expenditures associated with planned development activities for these properties for the rest of 2011 are currently estimated at $35 to $40 million. The closing, which is subject to customary closing conditions and normal closing price adjustments, including effective date adjustments, is anticipated in the second quarter and will be funded from cash on hand and borrowings under our revolving bank credit facility.

Tracy W. Krohn, Chairman and Chief Executive Officer, commented, "The acquisition of the Permian Basin oil properties will allow us to continue with our goals of a steadier growth pattern coupled with good cash flow and positive full cycle economics. We believe that there are many more attractive acquisition opportunities for us both onshore and offshore."