Encore Energy Partners Agrees to Acquire Assets from Encore Acquisition Company for...

Encore Energy Partners Agrees to Acquire Assets from Encore Acquisition Company for $250 Million

FORT WORTH, Texas--(Business Wire)--Encore Energy Partners LP (NYSE: ENP) ("ENP" or the "Partnership")
announced today that it has signed a definitive agreement to acquire
oil and natural gas producing properties in the Permian and Williston
Basins from Encore Acquisition Company (NYSE: EAC) ("EAC") 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."

The oil and natural gas properties being acquired from EAC have
the following characteristics:

-- Proven reserves of 10.8 million barrels of oil equivalent
("BOE"), 88 percent proved developed producing, and 65 percent
oil.

-- Current production of approximately 1,800 BOE per day, 83
percent operated, and 63 percent oil. Approximately 80 percent
of current production is located in six fields in the Permian
Basin - Crockett, Nolley McFarland, Dune, North Cowden,
Champmon, and Yates. The remaining production is located in
three fields in the Williston Basin - Horse Creek, Charlson
Madison Unit, and Elk.

-- Encore's internal engineers have estimated that the proved
developed producing properties will generate approximately $34
million in cash flow (revenues less direct operating expenses)
in 2008.

-- An average reserve-to-production ratio of 16 years.

-- Estimated maintenance capital expenditures of $5 million per
year.

-- Expected lease operating expense of approximately $9.70 per
BOE for 2008.

-- Production taxes of approximately 8.7 percent of wellhead
revenues for 2008.

"We have locked in the high-margin cash flows from this
transaction through our proven hedging strategy of protecting
two-thirds of the downside risk while maintaining two-thirds of the
upside exposure to rising commodity prices," commented Bob Reeves,
Chief Financial Officer and Senior Vice President. He continued, "It's
nice to be hedging into the strength of the oil markets which allowed
us to set the floors and ceilings at higher oil prices than a few
months ago for a lower cost."

In connection with the acquisition, the Partnership purchased oil
puts at a strike price of $80.00 per barrel ("Bbl") for 440 Bbl per
day at a total cost of approximately $2.2 million for 2008 through
2010. Additionally, the Partnership entered into costless collars for
440 Bbl per day with a floor of $80.00 per Bbl and an average ceiling
price of $99.72 per Bbl over the same period.

With respect to natural gas (using an Inside FERC Houston Ship
Channel price), the Partnership purchased puts at a strike price of
$8.20 per thousand cubic feet ("Mcf") for 1,800 Mcf per day at a total
cost of approximately $2.6 million for 2008 through 2010. The
Partnership also entered into collars for 1,800 Mcf per day at a total
cost of approximately $0.4 million with a floor of $7.20 per Mcf and
an average ceiling price of $9.80 per Mcf over the same period.

The Board of Directors of the Partnership's general partner
approved the transaction based on a recommendation from its Conflicts
Committee, which consists entirely of independent directors.

Simmons & Company International and Griffis & Associates, LLC
acted as financial advisors to ENP's Conflicts Committee and delivered
a fairness opinion in connection with the transaction.

Lehman Brothers Inc. acted as financial advisor and rendered a
fairness opinion to EAC's Board of Directors in connection with the
transaction.

In conjunction with this release, management will host a
conference call and simultaneous webcast. A presentation further
describing the Permian and Williston Basin transaction will be
available on ENP's and EAC's websites prior to the conference call.

Conference Call Details

Title: Permian and Williston Basin Transaction

Date and Time: Friday, January 4, 2008 at 1:30 p.m. Central Time

Webcast: Listen to the live broadcast via http://www.encoreenp.com
or http://www.encoreacq.com.

Telephone: Dial 877-356-9552 ten minutes prior to the scheduled
time and request the conference call by supplying the title specified
above or ID 29687715.

A replay of the conference call will be archived and available via
the above websites or by dialing 800-642-1687 and entering conference
ID 29687715. The replay will be available through January 18, 2008.
International callers can dial 706-679-0419 for the live broadcast or
706-645-9291 for the replay.

About ENP

Encore Energy Partners LP was formed by Encore Acquisition Company
to acquire, exploit, and develop oil and natural gas properties and to
acquire, own, and operate related assets. Subsequent to this
transaction, ENP's assets will consist primarily of producing and
non-producing oil and natural gas properties in the Elk Basin of
Wyoming and Montana, Williston Basin in North Dakota, and the Permian
Basin of West Texas.

Cautionary Statement

This press release includes forward-looking statements, which give
ENP's current expectations or forecasts of future events based on
currently available information. Forward-looking statements in this
press release relate to, among other things, estimated reserves and
production, estimated reserve-to-production ratio, estimated lease
operating expense, estimated production taxes, estimated maintenance
capital expenditures, expected accretion and the anticipated benefits
of the proposed transaction. The assumptions of management and the
future performance of ENP are subject to a wide range of business
risks and uncertainties and there is no assurance that these
statements and projections will be met. Factors that could affect
ENP's business include, but are not limited to: the risks associated
with drilling of oil and natural gas wells; ENP's ability to find,
acquire, market, develop, and produce new properties; the risk of
drilling dry holes; oil and natural gas price volatility; derivative
transactions (including the costs associated therewith); uncertainties
in the estimation of proved, probable, and potential reserves and in
the projection of future rates of production and reserve growth;
inaccuracies in ENP's assumptions regarding items of income and
expense and the level of capital expenditures; uncertainties in the
timing of exploitation expenditures; operating hazards attendant to
the oil and natural gas business; drilling and completion losses that
are generally not recoverable from third parties or insurance;
potential mechanical failure or underperformance of significant wells;
climatic conditions; availability and cost of material and equipment;
the risks associated with operating in a limited number of geographic
areas; actions or inactions of third-party operators of ENP's
properties; ENP's ability to find and retain skilled personnel;
diversion of management's attention from existing operations while
pursuing acquisitions; availability of capital; the strength and
financial resources of ENP's competitors; regulatory developments;
environmental risks; uncertainties in the capital markets;
uncertainties with respect to asset sales; general economic and
business conditions; industry trends; and other factors detailed in
ENP's final prospectus dated September 11, 2007 and other filings with
the Securities and Exchange Commission. If one or more of these risks
or uncertainties materialize (or the consequences of such a
development changes), or should underlying assumptions prove
incorrect, actual outcomes may vary materially from those forecasted
or expected. ENP undertakes no obligation to publicly update or revise
any forward-looking statements.

Summary of ENP's Derivative Positions as of December 28, 2007:

Oil prices represent NYMEX WTI monthly average prices, while
natural gas prices represent IF Houston Ship Channel ("HSC") prices.

Oil Derivative Contracts

-0-
*T
Floors Swaps Caps
Weighted Weighted Weighted
Daily Average Daily Average Daily Average
Floor Floor Swap Swap Cap Cap
Volume Price Volume Price Volume Price
---------------- ---------------- ----------------
(per (per (per
Period (Bbl) Bbl) (Bbl) Bbl) (Bbl) Bbl)
---------------- ---------------- ----------------
Jan. 2008 2,500 $73.00 - - - -
Feb. - Dec. 2008 3,380 $74.82 - - 440 $107.60
Jan. - Dec. 2009 3,130 $75.77 1,000 $68.70 440 $97.75
Jan. - Dec. 2010 2,880 $76.53 - - 1,440 $82.29
Jan. - Dec. 2011 2,000 $75.00 - - 1,000 $94.65
*T

Natural Gas Derivative Contracts

-0-
*T
Floors Caps
Weighted Weighted
Daily Floor Average Daily Cap Average
Volume Floor Price Volume Cap Price
------------------------ -----------------------
Period (Mcf) (per Mcf) (Mcf) (per Mcf)
------------------------ -----------------------
Jan. 2008 4,000 $7.70 2,000 $9.85
Feb. - Dec. 2008 7,600 $7.70 3,800 $9.83
Jan. - Dec. 2009 7,600 $7.70 3,800 $9.83
Jan. - Dec. 2010 7,600 $7.70 3,800 $9.58
*T

Encore Energy Partners LP
Bob Reeves, 817-339-0918
rcreeves@encoreacq.com
or
Diane Weaver, 817-339-0803
dweaver@encoreacq.com

Copyright Business Wire 2007