MIDLAND, Texas, Jan. 15, 2008 (PRIME NEWSWIRE) -- Legacy Reserves LP (Nasdaq:LGCY) today announced it has pending acquisitions of $29.5 million of producing oil and natural gas properties and has closed $2.7 million of acquisitions during December 2007 and January 2008. All of the acquisitions are in the Permian Basin and Texas Panhandle. The pending acquisitions are expected to close in January 2008. The closed and pending acquisitions have aggregate net production of 366 Boe/d, of which 68% are oil and natural gas liquids. These acquisitions have proved reserves of approximately 2.0 million Boe's, of which 99% are classified as proved developed producing. The proved reserves to production ratio is an estimated 14.8 years.
Cary Brown, Chairman and Chief Executive Officer, commented, "The new properties have numerous developmental drilling locations that will be evaluated for future drilling. These reserves represent additional interests in properties that Legacy acquired in late 2007. Thus, we expect that there will be no incremental administrative burden to manage these properties, and the impact of any drilling or production enhancement will have a greater impact on Legacy's bottom line."
Including the pending acquisitions described above, Legacy has acquired or agreed to acquire over $225 million of proved oil and natural gas properties since our IPO on January 12, 2007 through more than 17 transactions.
Related to the announced acquisitions, Legacy today entered into NYMEX WTI oil swaps and natural gas swaps. New WTI oil fixed price swaps are tabulated below. WTI swaps are used to mitigate risks associated with both oil and natural gas liquids sales as the price of natural gas liquids is highly correlated to that of WTI oil prices.
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Time Period Swap Volumes WTI Average Price
Calendar Contracts (Bbls) ($/Bbl)
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Feb.-Dec. 2008 66,848 $87.65
2009 66,373 $87.65
2010 61,229 $87.65
2011 56,818 $87.65
2012 53,113 $87.65
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Swaps are tabulated below for new natural gas fixed price swaps indexed to the ANR-OK index in the Mid-continent. ANR-OK trades at a discount to the NYMEX Henry Hub natural gas index. The natural gas prices that we receive for our natural gas sales in the Texas Panhandle follow ANR-OK more closely than the NYMEX Henry Hub index.
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Time Period Swap Volumes ANR-OK Natural
Calendar Contracts Gas Price
(MMBtu) ($/MMBtu)
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Feb.-Dec. 2008 191,159 $7.51
2009 192,718 $7.51
2010 179,650 $7.51
2011 168,330 $7.51
2012 158,228 $7.51
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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 exploitation of oil and natural gas properties primarily located in the Permian Basin and Mid-continent regions. Additional information is available at www.LegacyLP.com.
The Legacy Reserves logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3201
Cautionary Statement Relevant to Forward-Looking Information
This press release contains forward-looking statements relating to Legacy's operations that are based on management's current expectations, estimates and projections about its operations. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "schedules," "estimated," and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Legacy undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are realized oil and natural gas prices; production volumes; lease operating expenses, general and administrative costs and finding and development costs; future operating results; and the factors set forth under the heading "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2006.