Vanguard Natural Resources (NYSE: VNR), a partial owner of Encore Energy Partners LP (NYSE: ENP), is finalizing a deal to buy the remainder of the company.
Both companies are oil- and natural gas-production companies holding assets across the United States.
Vanguard currently owns about 46% of the company, and the remaining 54% would be acquired for an estimated $544.8 million, according to Reuters.
The total merger would be worth around $1 billion.
Encore is based in Texas and owns assets in the Big Horn Basin in Wyoming and Montana, the Williston Basin in North Dakota and Montana, the Permian Basin in West Texas and New Mexico, and the Arkoma Basin in Arkansas and Oklahoma.
These would be added to Vanguard’s assets in the Appalachian Basin, Permian Basin, and South Texas.
The approved deal would allow Vanguard to purchase Encore for about $21.94 per share.
Shareholders of Encore would receive 0.75 units of Vanguard in place of each Encore unit they own.
This is a 4.4% premium over the original deal, which offered only .72 units of Vanguard for every one of Encore, proposed on March 25.
The merger of the companies would help reduce their operating costs by combining their assets.
It would also put an end to the annual fee of $6.5 million that Encore is required to pay.
Encore officials unanimously approved the costs of the deal, and the merger is being finalized between the two companies.
The deal is expected to close by the end of the fourth quarter 2011.
Following the announcement of the details of the deal, Vanguard shares were down 0.55% on Monday, and Encore shares dropped 1.20%.
That’s all for now,