MIDLAND, Texas, March 13, 2008 (PRIME NEWSWIRE) -- Legacy Reserves LP (Nasdaq:LGCY) today announced it entered into a definitive purchase agreement to acquire certain oil and natural gas producing properties from a third party for an aggregate purchase price of $82 million, subject to customary purchase price adjustments. The properties are primarily located in the Permian Basin and to a lesser degree in Oklahoma and Kansas.
Operational Highlights: * Estimated proved reserves of approximately 4.1 million Boe * 80% proved developed producing reserves * 67% of value is operated * Proved reserves to production ratio of approximately 14 years * Current net production of approximately 793 Boe per day * 205 producing wells * January 1, 2008 effective date
Financial Highlights:
The purchase of the subject properties will be funded with borrowings from our revolving credit facility and, if certain conditions are met, issuance of units to the seller, which is expected to reduce the cash portion of the purchase price to $55 million, subject to closing and post-closing adjustments. Our current borrowing base of $225 million is scheduled to be reviewed by our bank group with any increase effective April 1, 2008. We expect the acquisition to be immediately accretive to distributable cash flow per unit and that management will recommend to the Board of Directors of the general partner of Legacy Reserves LP to increase the distribution with respect to the first quarter of 2008 payable in second quarter of 2008.
Commodity Derivatives:
We entered into NYMEX WTI Oil swaps and Waha natural gas swaps related to this announced acquisition along with increasing our natural gas fixed price swap exposure on our existing assets in 2011 and 2012.
The new NYMEX WTI oil swaps are tabulated below:
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Time Period Swap Volumes Average Price
Calendar Contracts (Bbls.) ($/Bbl)
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June-Dec. 2008 93,300 $101.47
2009 145,200 $101.47
2010 134,400 $101.47
2011 124,800 $101.47
2012 116,400 $101.47
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Total 611,100 $101.47
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Swaps are tabulated below for natural gas fixed price swaps indexed to the Waha hub in West Texas. The Waha hub currently trades at a discount range of approximately $0.55 - $1.10 to the NYMEX Henry Hub natural gas index. The natural gas prices that we receive for our natural gas sales follow Waha more closely than the NYMEX Henry Hub index.
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Time Period Swap Volumes Natural Gas Price
Calendar Contracts (MMBtu) ($/MMBtu)
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June-Dec. 2008 253,463 $8.70
2009 399,376 $8.70
2010 364,404 $8.70
2011 951,792 $8.70
2012 719,399 $8.70
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Total 2,688,435 $8.70
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About Legacy Reserves LP
We are an independent oil and natural gas limited partnership headquartered in Midland, Texas, and are focused on the acquisition and development of oil and natural gas properties primarily located in the Permian Basin and Mid-continent regions of the United States. Additional information is available at www.LegacyLP.com.
The Legacy Reserves logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3201