Vanguard Natural Resources LLC, a U.S. oil-and-gas producer, has
agreed to acquire smaller rival Eagle Rock Energy Partners L.P. for
$474 million plus debt, the two Houston-based companies said
Thursday.
The deal gives Vanguard a bigger presence in Oklahoma, where the
company already pumps oil and gas, Vanguard chief executive Scott
Smith said.
"The assets being acquired are attractive bolt-ons to our
Mid-Continent, Permian, and Gulf Coast Basin operations," Mr. Smith
said, referring to Vanguard's existing drilling operations in
Texas, New Mexico, Colorado, Wyoming and several other states.
Terms of the deal calls for a subsidiary of Vanguard to merge
into Eagle Rock for $474 million in stock and assume Eagle Rock's
net debt of $140 million. Following that combination, Eagle Rock
will be a subsidiary of Vanguard.
Joseph A. Mills, chief executive of Eagle Rock, said the
agreement gives Eagle Rock shareholders a 24% premium over
Thursday's closing price of $2.45 a share.
"We have been very impressed with the Vanguard team and look
forward to working together to successfully combine our two
companies," he said.
This is the second acquisition announced by Vanguard in the past
month. In April, the company said it would acquire LRR Energy L.P.
for $539 million in a deal similar to the one with Eagle Rock.
Write to Erin Ailworth at Erin.Ailworth@wsj.com
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