History
Encore Energy Partners listed in 2007, grew by buying oil and gas properties from its parent, passed to Denbury then Vanguard control, and agreed in 2011 to merge into Vanguard.
2007-2009: Listing and buying from the parent
Encore Energy Partners listed on the New York Stock Exchange in September 2007. Its initial public offering priced 9,000,000 common units at $21.00 each, with UBS and Lehman Brothers as lead underwriters. The offering closed on September 17, 2007, and the units sold made up about 37.4% of the partnership. At closing, Encore Operating, a subsidiary of parent Encore Acquisition Company (EAC), transferred the Permian Basin assets to the partnership for 4,043,478 common units. EAC also agreed to indemnify it for certain environmental, tax and title liabilities.
Growth then came mostly from buying more properties from EAC's subsidiary, each approved on the recommendation of an independent Conflicts Committee. In February 2008 the partnership closed a Permian and Williston Basin purchase for about $250.4 million, paid as $125.4 million in cash borrowed under its credit facility plus 6,884,776 new units. The properties had about 10.8 million barrels of oil equivalent (BOE) of proven reserves. EAC and affiliates held about 67% of the units afterward.
A $49 million Arkoma Basin and royalty purchase closed on January 2, 2009, again funded by borrowing. In May 2009 the partnership agreed two more deals worth $25.8 million and $28.0 million, in the Williston Basin and Texas's Vinegarone Field. The record seen here does not confirm that either closed.
The largest deal came in June 2009, when the partnership agreed to buy Big Horn, Permian and Williston Basin properties for $190 million. It closed on August 11, 2009 for about $186.8 million cash. The properties had about 12.4 million BOE of proved reserves. The credit facility's borrowing base rose from $240 million to $375 million the same day, with $275 million outstanding afterward. EAC's stake was stated as about 46%, and the filing did not explain the fall from 58%.
2010: A new owner
On March 9, 2010, EAC's merger with Denbury closed, handing Denbury control of the general partner. EAC had held about 46.2% of the units. Both Brumleys resigned and all officers were replaced by Denbury executives led by Phil Rykhoek as chief executive. Public unitholders' units were unchanged. The record for the rest of 2010 is quiet.
2011: Vanguard and the merger
By January 2011, Vanguard Natural Gas (VNG), a subsidiary of Vanguard Natural Resources (VNR), owned the general partner and about 46% of the units. In June 2011 the partnership agreed to buy West Texas Permian assets from a private seller for $42.5 million. The deal closed on July 29 at an adjusted $40.7 million, paid from the existing credit agreement. The assets had 2.74 million BOE of proved reserves and produced about 500 BOE a day, and new hedges covered a substantial portion of expected output through 2014.
On July 10, 2011, the partnership agreed to merge with a Vanguard subsidiary. It would survive as a wholly-owned subsidiary of VNG, and every unit not held by VNG would convert into 0.75 Vanguard units. VNG agreed to vote its 20,924,055 units in favor. The deal had an outside date of December 31, 2011, and a $20.0 million fee would be payable by the partnership if its board or conflicts committee changed its recommendation.
A joint proxy statement dated October 31, 2011 asked unitholders to approve the deal. Other former unitholders would own about 37.8% of the combined company. The Vanguard unitholder meeting was set for November 30. On December 1, 2011 the exchange filed to remove a class of the partnership's securities from listing. On December 12 the partnership terminated the registration of a class of securities, ending its reporting obligation for them. The record seen here does not describe the vote results.
Written from the 17 story beats below (2007 to 12 Dec 2011), which come from the company's own announcements and filings.