SYS-CON MEDIA Authors: Roberto Medrano, Dmitriy Stepanov, Gilad Parann-Nissany, Srinivasan Sundara Rajan, Sean Houghton

News Feed Item

QR Energy Acquires $145 Million of Oil Properties in Florida Gulf Coast Area

HOUSTON, TX -- (Marketwire) -- 01/02/13 -- QR Energy, LP ("QRE" or "QR Energy") (NYSE: QRE) announced today that it has acquired $145 million of oil properties located in the Jay field in the Florida Gulf Coast area from its sponsor, Quantum Resources Fund. The transaction closed on December 28, 2012 and was financed with cash on hand and borrowings under its bank credit facility.

Transaction Highlights

  • Expected to be immediately accretive to Distributable Cash Flow; 2013 Adjusted EBITDA for acquired properties expected to exceed $35 million

  • Mature, legacy asset with significant oil in place located in a core area; adds to QRE's 7.4% overriding oil royalty interest in the Jay field

  • Current net production of approximately 2,500 Boed is 90% oil and 10% NGLs; 100% operated

  • Estimated total proved reserves of 11.3 MMBoe as of December 31, 2012 are 100% proved developed (76% proved developed producing); 87% oil and 13% NGLs

  • Low-risk estimated probable reserves of more than 4.0 MMBoe as of December 31, 2012

  • Lengthy proved reserve life (R/P) of 12.4 years; low decline rate of approximately 9% per year

  • Low-risk development opportunities include optimizing tertiary recovery by increasing throughput, performing well cleanouts and enhancing plant processing capabilities

  • Estimated maintenance capital expenditures of approximately $11 million per year

  • Expect approximately $3 million per year in incremental general and administrative expenses

  • Significant percentage of acquired production hedged through 2017

  • Borrowing base expected to increase from $730 million to $900 million based on Jay and recent East Texas acquisitions

Chief Executive Officer Alan L. Smith commented, "This acquisition allows the partnership to own a world class oil field with significant remaining reserves, a low decline and a long reserve life. We expect the high liquids content and premium Louisiana Light Sweet crude oil pricing to deliver high margins and significant accretion to our unitholders."

Commodity Derivative Summary

QR Energy's sponsor novated oil derivative contracts to QR Energy concurrent with the transaction closing. QR Energy's current oil and natural gas derivative contracts are at the following notional volumes and prices:


-----------------------------------------------------------------

                                Crude Oil
       ----------------------------------------------------------
                          Average              Floor    Ceiling
                 Swaps     Price    Collars    Price     Price
  Term   Index   Bbls/d   ($/Bbl)   Bbls/d    ($/Bbl)   ($/Bbl)
-----------------------------------------------------------------
  2013    WTI      7,170  $98.74       -         -         -
  2013    LLS      1,400  $99.51       -         -         -
  2014    WTI      6,661  $96.35      425     $90.00    $106.50
  2014    LLS      1,900  $98.77       -         -         -
  2015    WTI      6,721  $94.51     1,025    $90.00    $110.00
  2016    WTI      5,698  $90.80     1,500    $80.00    $102.00
  2017    WTI      4,997  $86.88       -         -         -
-----------------------------------------------------------------
"WTI" is West Texas Intermediate crude oil; "LLS" is Louisiana
 Light Sweet crude oil.


-------------------------------------------------------------

                            Natural Gas
     --------------------------------------------------------
                         Average            Floor    Ceiling
                 Swaps    Price   Collars   Price     Price
 Term   Index   MMBtu/d ($/MMBtu) MMBtu/d ($/MMBtu) ($/MMBtu)
-------------------------------------------------------------
 2013 Henry Hub  30,441   $6.02     2,466   $6.50     $8.65
 2014 Henry Hub  26,622   $6.18     4,966   $5.74     $7.51
 2015 Henry Hub   7,191   $5.34    18,000   $5.00     $7.48
 2016 Henry Hub  11,350   $4.27       630   $4.00     $5.55
 2017 Henry Hub  10,445   $4.47       595   $4.00     $6.15
-------------------------------------------------------------



------------------------------------

             Natural Gas
------------------------------------
                             Avg.
          Average   Basis  Discount
  Puts     Price    Swaps  to NYMEX
 MMBtu/d ($/MMBtu) MMBtu/d ($/MMBtu)
------------------------------------
    -        -      18,466  ($0.17)
    -        -      17,066  ($0.19)
     420   $4.00    14,400  ($0.19)
  11,350   $4.00      -        -
  10,445   $4.00      -        -
------------------------------------

Webcast and Conference Call

QR Energy will host a webcast and conference call on Thursday, January 3 at 10 a.m. central time to discuss the transaction. Presentation slides for the call have been posted to QR Energy's Investor Relations website at http://ir.qrenergylp.com.

Interested parties may join the webcast by visiting QR Energy's Investor Relations website at http://ir.qrenergylp.com and clicking on the webcast link or the conference call by dialing (877) 861-4516 or (706) 679-6295 five minutes before the call begins and providing the passcode 83945175.

The webcast will be available on QR Energy's Investor Relations website at http://ir.qrenergylp.com for 14 days following the call and a telephonic replay will be available for 7 days following the call by dialing (855) 859-2056 or (404) 537-3406 and providing the conference ID 83945175.

About QR Energy, LP

QR Energy, LP is a publicly traded partnership engaged in the acquisition, production and development of onshore crude oil and natural gas properties in the United States. QR Energy is headquartered in Houston, Texas. For more information, visit QR Energy's website at www.qrenergylp.com.

Guidance

The guidance set forth above is subject to all cautionary statements and limitations described below and under the "Forward-Looking Statements" section of this press release. In addition, estimates for QR Energy's future revenues are based on, among other things, assumptions of capital expenditure levels and the assumption that market demand and prices for oil and natural gas will continue at levels that allow for economic production of these products. The production, transportation and marketing of oil and natural gas are extremely complex and are subject to disruption due to transportation and processing availability, mechanical failure, human error, weather and numerous other factors. Estimates are based on certain other assumptions, such as well performance, which may vary significantly from QR Energy's assumptions. Operating costs, which include major maintenance costs, vary in response to changes in prices of services and materials used in the operation of properties and the amount of maintenance required. Operating costs, including taxes, utilities and service company costs, move directionally with increases and decreases in commodity prices and QR Energy cannot fully predict such future commodity prices or operating costs. Capital expenditures are based on current expectations as to the level of capital expenditures that will be justified based upon the other assumptions set forth below as well as expectations about other operating and economic factors not set forth below. The guidance set forth above does not constitute any form of guarantee, assurance or promise that the matters indicated will actually be achieved. Rather, the guidance simply sets forth QR Energy's best estimate today for these matters. Estimates are based upon current expectations about the future and based upon both stated and unstated assumptions. Actual conditions and assumptions may change over the course of the year.

QR Energy defines Adjusted EBITDA as net income plus interest expense (including realized and unrealized gains and losses on interest rate derivative contracts), unrealized gains and losses on commodity derivative contracts, unrealized gains and losses on gas imbalances, depletion, depreciation and amortization, accretion of asset retirement obligations, impairments, and general and administrative expenses, less interest income and unrealized gains on commodity derivative contracts.

Forward-Looking Statements

This press release may contain forward-looking statements within the meaning of federal securities laws. QR Energy believes that its expectations and forecasts are based on reasonable assumptions; however, no assurance can be given that such expectations and forecasts will prove to be correct. A number of factors could cause actual results to differ materially from the expectations and forecasts, anticipated results or other forward-looking information expressed in this press release, including risks and uncertainties regarding future results, capital expenditures, liquidity and financial market conditions, sufficiency of cash from operations, adverse market conditions and governmental regulations. For a more complete list of these risk factors, please read QR Energy's filings with the Securities and Exchange Commission ("SEC"), which are available on QR Energy's Investor Relations website at http://ir.qrenergylp.com or on the SEC's website at www.sec.gov.

Reserve Disclosures

The SEC permits oil and gas companies, in their filings with the SEC, to disclose only "reserves" as defined by SEC rules. Estimates of reserves in this communication are based on economic assumptions with regard to commodity prices that differ from the prices required by the SEC (historical 12 month average) to be used in calculating reserves estimates prepared in accordance with SEC definitions and guidelines. In addition, the estimates of reserves in this press release were prepared by our internal reserve engineers and are based on various assumptions, including assumptions related to oil and natural gas prices as discussed above, drilling and operating expenses, capital expenditures, taxes and availability of funds. Our internal estimates of proved reserves may differ materially from the year-end estimates of our proved reserves prepared by a third party as a result of the SEC pricing and other assumptions employed by an independent reserve engineering firm.

Investor Contacts:

Taylor B. Miele
Investor Relations Manager
(713) 452-2990

Cedric W. Burgher
Chief Financial Officer
(713) 452-2200

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
The Internet of Things promises to transform businesses (and lives), but navigating the business and technical path to success can be difficult to understand. In his session at @ThingsExpo, Sean Lorenz, Technical Product Manager for Xively at LogMeIn, demonstrated how to approach creating broadly successful connected customer solutions using real world business transformation studies including New England BioLabs and more.
The security devil is always in the details of the attack: the ones you've endured, the ones you prepare yourself to fend off, and the ones that, you fear, will catch you completely unaware and defenseless. The Internet of Things (IoT) is nothing if not an endless proliferation of details. It's the vision of a world in which continuous Internet connectivity and addressability is embedded into a growing range of human artifacts, into the natural world, and even into our smartphones, appliances, a...
SYS-CON Media announced that Centrify, a provider of unified identity management across cloud, mobile and data center environments that delivers single sign-on (SSO) for users and a simplified identity infrastructure for IT, has launched an ad campaign on Cloud Computing Journal. The ads focus on security: how an organization can successfully control privilege for all of the organization’s identities to mitigate identity-related risk without slowing down the business, and how Centrify provides ...
SYS-CON Events announced today Isomorphic Software, the global leader in high-end, web-based business applications, will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Isomorphic Software is the global leader in high-end, web-based business applications. We develop, market, and support the SmartClient & Smart GWT HTML5/Ajax platform, combining the productivity and performance of traditional desktop software ...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The 3rd International @ThingsExpo, co-located with the 16th International Cloud Expo – to be held June 9-11, 2015, at the Javits Center in New York City, NY – is now accepting Hackathon proposals. Hackathon sponsorship benefits include general brand exposure and increasing engagement with the developer ecosystem. At Cloud Expo 2014 Silicon Valley, IBM held the Bluemix Developer Playground on November 5 and ElasticBox held the DevOps Hackathon on November 6. Both events took place on the expo fl...
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will w...
The term culture has had a polarizing effect among DevOps supporters. Some propose that culture change is critical for success with DevOps, but are remiss to define culture. Some talk about a DevOps culture but then reference activities that could lead to culture change and there are those that talk about culture change as a set of behaviors that need to be adopted by those in IT. There is no question that businesses successful in adopting a DevOps mindset have seen departmental culture change, ...
There's Big Data, then there's really Big Data from the Internet of Things. IoT is evolving to include many data possibilities like new types of event, log and network data. The volumes are enormous, generating tens of billions of logs per day, which raise data challenges. Early IoT deployments are relying heavily on both the cloud and managed service providers to navigate these challenges. In her session at Big Data Expo®, Hannah Smalltree, Director at Treasure Data, discussed how IoT, Big D...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series dat...
Fundamentally, SDN is still mostly about network plumbing. While plumbing may be useful to tinker with, what you can do with your plumbing is far more intriguing. A rigid interpretation of SDN confines it to Layers 2 and 3, and that's reasonable. But SDN opens opportunities for novel constructions in Layers 4 to 7 that solve real operational problems in data centers. "Data center," in fact, might become anachronistic - data is everywhere, constantly on the move, seemingly always overflowing. Net...
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrateg...
DevOps Summit 2015 New York, co-located with the 16th International Cloud Expo - to be held June 9-11, 2015, at the Javits Center in New York City, NY - announces that it is now accepting Keynote Proposals. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long development cycles that produce software that is obsolete...
WebRTC defines no default signaling protocol, causing fragmentation between WebRTC silos. SIP and XMPP provide possibilities, but come with considerable complexity and are not designed for use in a web environment. In his session at @ThingsExpo, Matthew Hodgson, technical co-founder of the Matrix.org, discussed how Matrix is a new non-profit Open Source Project that defines both a new HTTP-based standard for VoIP & IM signaling and provides reference implementations.