United Resources LP is a subsidiary of The United Company (United).
United was founded in 1970 as an Appalachian coal producer, and grew
into one of the largest private coal companies in the U.S. before
strategically exiting in the mid 1990s. Current business
divisions include energy, financial services and golf courses.
United made its initial investment in oil and gas in 1984, with the
purchase of United Oil & Minerals, Inc. (UOM), located in Austin,
Texas, with operations in the onshore Gulf Coast. In March
1987, United purchased Star Oil & Gas, Ltd. (Star), located in
Calgary, Alberta. Star was an intermediate sized producer in
the Western Sedimentary Basin of Canada.
In 1999, United decided to focus on the growth potential of its oil
and gas assets. As a result, a new management team was recruited.
This proved to be the catalyst needed to significantly boost growth
rates and returns.
Under new management, United completed $230 MM of oil and gas
acquisitions over the first three years, with the largest being
South Texas producing properties from El Paso Production Company for
$110 MM in March 2002. Production and reserves increased 46%
and 85% respectively during the same period. By the end of
2002, United had proved reserves of 547 Bcfe and net daily
production exceeding 175 Mmcfe.
United acted on a unique exit opportunity in 2003. In April
2003, Star was sold to Arc Resources, Ltd. for $525 MM, representing
a 36% IRR since restructuring in 1999. Likewise, UOM, which changed
its name to United Resources, LP in 2003, closed its $350 MM asset
sale to Westport Resources in December, 2003. This sale
represented a 75% IRR since the 1999 restructuring.
The United Company recapitalized United Resources LP in early 2004
with the goal of rebuilding the domestic E&P business. The
process is underway as the post sale drilling program began in June
2004.
