QR Energy Continues Acquisition Spree (QRE)
QR Energy LP (NYSE: QRE) is an independent oil & gas producer that seeks out mature producing fields, buys them, and then tries to make them pay off either by lowering production costs or by effective hedging. In the fourth…
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The company announced today that it was purchasing another $230 million worth of assets from an unnamed private owner. The assets being acquired currently produce about 1,178 barrels of oil equivalent/day, 93% of which is liquids. The transaction is all cash, nearly all of which will be borrowed. On the company’s annual Form 10-K filed last week, cash and equivalents totaled less than $17.5 million. Here’s what QR said in the press release announcing the acquisition:
The transaction is expected to be financed with cash on hand and borrowings under its bank credit facility. QRE has also secured commitments to provide an additional $200 million of bank loans, which are available to fund the purchase price of the acquisition if necessary. The transaction is expected to close in late April, subject to customary closing conditions.
Shares closed at $22.36 on Friday and are trading down nearly -5% in the pre-market at $21.20 this morning.
Paul Ausick
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
