US-based QR Energy (QRE) has bought oil properties in the Jay field in the Florida Gulf Coast area, US, from its sponsor Quantum Resources Fund, for $145m.
The acquired assets hold significant amount of oil and will add to the company’s 7.4% oil royalty interest in the Jay field.
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Jay field’s current net production is about 2,500 barrels of oil equivalent, which includes 90% oil, 10% NGLs and 100% operated reserves.
As of 31 December 2012, the field includes estimated total proved reserves of 11.3 million barrels of oil equivalent, of which 100% is proved developed, 87% oil and 13% NGLs.
It contains low-risk estimated probable reserves of about 4.0 million barrels of oil equivalent as of 31 December 2012, and a lengthy proved reserve life (R/P) of 12.4 years with a 9% decline rate per year.
The company is estimated to bear maintenance capital expenditure of about $11m per year, while about $3m is expected per year in incremental general and administrative expenses.
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By GlobalDataQR Energy CEO, Alan L. Smith, said the acquisition has helped the company to gain control over an excellent oil field which comprises prominent reserves with 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," added Smith.
QRE completed the transaction on 28 December 2012 with cash on hand after borrowing under its bank credit facility.
With the Jay field and East Texas acquisitions, QRE’s borrowing base is expected to rise from $730m to $900m.
