Encore Energy Partners LP has signed a definitive agreement to acquire oil and natural gas producing properties in the Permian and Williston Basins from Encore Acquisition Company in exchange for total consideration of $250 million, subject to customary closing conditions and adjustments.

The consideration for the acquisition will consist of $125 million in cash and approximately 6.88 million common units representing limited partner interests in ENP (based on the trailing 10-day closing price of $18.156 per common unit from December 26, 2007). In order to fund the cash portion of the purchase price, ENP will borrow under its existing $300 million revolving credit facility. As a result of the transaction, EAC and its affiliates will own approximately 21.98 million of ENP's outstanding units, or approximately 68 percent. The transaction will be immediately accretive to ENP's 2008 distributable cash flow per unit.

"We continue to analyze deals on the market, but this transaction is an example of our ability to grow ENP through the sale of properties from EAC to ENP," stated Jon S. Brumley, Chief Executive Officer and President. He went on to state, "This transaction is positive for both companies. The MLP is adding another first class set of properties to its portfolio that are long-life, shallow-declining, and have low maintenance capital requirements which are just as accretive three years from now as they are in 2008. EAC is excited about increasing its equity position in ENP and at the same time delevering with the cash proceeds."

Tags: Encore Acquisition Company, Encore Energy Partners LP