Vanguard Natural Resources says now is "Great Time" to Buy Natural Gas Assets
The resources would create an immediate cash flow, with enough reserves to last 15 years at current production rates. In this deal, Vanguard Natural Resources will acquire 66,000 net acres in the Woodford Shale and 5,300 net acres in the Fayetteville Shale.
Vanguard says the acquisition contains 180 proved drilling locations that can generate “superior returns” at current natural gas prices and 1,100 proved drilling locations that can be developed at higher natural gas prices.
Scott W. Smith, Vanguard's President and CEO explained that he believes now is an opportune time to purchase natural gas assets, implying that he believes the price of natural gas will increase. This prediction is in contrast to a greater than 30% decline in natural gas year to date, as measured by changes in US Natural Gas Fund (NYSE: UNG), a natural gas ETF.
Shares of Vanguard Natural Resources traded around 42 cents, or 1.8% higher this morning.
Disclosure: At the time of this writing, I did not own shares of any companies mentioned in this post.
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