Wells Fargo Starts QR Energy (QRE) at Outperform, Price Range $21-23

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Wells Fargo initiates coverage on shares of QR Energy (NYSE: QRE) with an Outperform rating and a price range of $21-$23 as the company is a high quality upstream MLP with a visible growth profile. The firm comments that the company is a strong private equity sponsor that has a stable base of low decline crude oil reserves, primarily located in the Permian Basin. Wells Fargo reports that, "QRE has a well delineated inventory of proved undeveloped drilling locations that should enable the partnership to maintain and/or modestly grow production over the next five years even absent additional acquisitions." The firm is assuming $900 million of total drop down acquisitions in 2011 and 2012 and $200 million a year of acquisitions thereafter. They predict that QRE will grow its distribution at a five-year CAGR of 5.7%.

For more ratings news on QR Energy click here and for the rating history of QR Energy click here.

Shares of QR Energy closed at $21.40 yesterday, with a 52 week range of $19.53-$21.50.

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