MIDLAND, Texas, April 5, 2011 (GLOBE NEWSWIRE) -- Legacy Reserves LP ("Legacy") (Nasdaq:LGCY) today announced it has entered into an agreement to purchase Permian Basin natural gas properties for $67 million in cash. The properties included in this pending acquisition contain 126 wells, 100 of which are operated, that are located in Eddy and Chaves Counties, New Mexico. In addition, the acquisition encompasses a natural gas gathering system and related compression facilities gathering gas from the acquired wells and some third party wells. Legacy estimates net daily sales of 7.6 MMcf of natural gas, 397 Bbls of NGLs, and 4 Bbls of oil, as well as proved reserves of 40.7 Bcfe. All of the evaluated reserves from this pending acquisition are considered proved developed producing ("PDP"). There are also multiple locations included in this acquisition that will be evaluated for future drilling. The closing of this acquisition is anticipated to occur on or about May 5, 2011, and is subject to customary purchase price adjustments.
Cary Brown, Chairman and CEO of Legacy, commented, "With many companies paying strong prices for blocky Permian Basin oil reserves and leasehold, we are excited to enhance our position in high-quality natural gas assets in the Permian Basin while natural gas prices remain depressed. In addition, we took advantage of the recent uptick in natural gas prices and hedged a significant portion of the forecasted volumes from this acquisition. These properties provide both established production and potential for development drilling. We expect this acquisition to be immediately and long-term accretive to our distributable cash flow per unit without any additional drilling."
Additional Acquisitions
Legacy Reserves announced that it closed five acquisitions of oil and natural gas properties totaling $12.3 million during the first quarter of 2011, and recently entered into two agreements to purchase additional properties totaling $1.8 million. These acquisitions, coupled with the pending natural gas acquisition, bring our year-to-date acquisitions to approximately $81 million. Legacy plans to finance the pending acquisitions with borrowings under its existing credit facility and cash on hand.
These additional properties produce an estimated 156 Boe per day, of which 86% is oil and natural gas liquids. Legacy estimates that these properties contain approximately 752 MBoe of proved reserves, of which an estimated 80% are classified as PDP and 89% are in the Permian Basin, 9% are in Oklahoma and 2% are in Wyoming.
New Commodity Derivatives Contracts
In anticipation of the closing of our pending acquisitions as well as our ongoing development activities, Legacy has entered into the following natural gas and crude oil derivatives agreements with participants in our bank group:
WAHA Natural Gas Swaps:
WTI Crude Oil Swap:
WTI Crude Oil 3-Way Collar:
About Legacy Reserves LP
Legacy Reserves LP is an independent oil and natural gas limited partnership headquartered in Midland, Texas, focused on the acquisition and development of oil and natural gas properties primarily located in the Permian Basin, Mid-Continent and Rocky Mountain regions of the United States. Additional information is available at .
The Legacy Reserves logo is available at
CONTACT: Legacy Reserves LP Steven H. Pruett, 432-689-5200 President and Chief Financial Officer
