QR Energy LP jumps on asset buy
Sept 13 (Reuters) - Shares of QR Energy LP jumped nearly 15 percent on Tuesday, a day after it more than doubled its oil and natural gas asset base, prompting RBC Capital Markets to raise its price target on the company's stock.
On Monday, the Houston, Texas-based company said it will buy oil and natural gas assets located in the Permian Basin in Texas, Ark-La-Tex -- the intersection of Arkansas, Louisiana, Texas and Oklahoma -- and the mid-continent.
QR Energy is a limited partnership engaged in acquiring, producing, and developing oil and gas properties.
RBC said the deal's valuation compares favorably with others in the region that involved a similar mix of oil and gas assets.
The brokerage raised its price target on QR Energy's stock by $2 to $27.
"The company's first acquisition more than doubles the size of the partnership, providing the company tremendous amount of financial flexibility to raise the current distribution," Raymond James said in a note to clients.
Separately, Alerian said the company is to be added to the Alerian MLP Index following the close of business on Friday. The index is a composite of 50 energy master limited partnerships and has risen 5 percent in the past year.
QR Energy's shares climbed to $20.37 in morning trade, making it the biggest gainer on the New York Stock Exchange. (Reporting by Swetha Gopinath in Bangalore; Editing by Sayantani Ghosh)