MIDLAND, Texas, Sept. 8, 2008 (GLOBE NEWSWIRE) -- Legacy Reserves LP (Nasdaq:LGCY) today announced it has entered into an agreement to purchase 100% of the membership interests of Pantwist, LLC from Cano Petroleum, Inc. (AMEX:CFW) for $42.7 million cash, subject to customary closing adjustments. Legacy is to acquire an estimated 453 Boe of daily production (72% oil and natural gas liquids), 3.1 MMBoe of proved reserves, 100% of which is proved developed producing. The closing is expected to be on October 1, 2008.
Legacy also closed the acquisition on August 29, 2008, of assets from Gryphon Production Company, LLC for approximately $13.0 million. Legacy acquired an estimated 115 Boe per day, of which 92% is oil and natural gas liquids (NGL). Proved reserves acquired are estimated to be 1.6 MMBoe, of which 61% are classified as proved developed producing. The balance of the proved reserves is associated with Legacy's plans to reactivate up to 300 available wellbores.
Over 98% of the assets being purchased in these two transactions are operated and are located in Carson, Gray, Hutchinson and Moore counties in the Texas Panhandle near Legacy's existing assets. Cary Brown, Legacy's Chairman and Chief Executive Officer, commented, "These acquisitions demonstrate our commitment to the Panhandle of Texas as a second core area for Legacy Reserves. The Panhandle fits our strategy to acquire long-lived reserves. We will now operate over 1,000 wells and own interests in approximately 1,500 non-operated wells. Including the pending Pantwist acquisition, we will have acquired oil and gas properties aggregating approximately $209 million year to date, which is approaching the goal we set at the beginning of 2008."
Related to the two acquisitions, Legacy entered into commodity swap transactions tabulated below, swapping fixed prices for floating prices with counterparties that are members of our bank group. We utilized oil to hedge the NGL exposure in the acquired properties. For natural gas, we hedged on the ANR-Oklahoma index, which represents the index on which the majority of our residue gas is sold after processing. At the time of the trade, the differential to NYMEX Henry Hub was approximately $0.80 per MMBtu, thus equating to a Henry Hub price of $8.90 per MMBtu.
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Year Oil WTI Oil Natural gas Natural gas
volumes Price volumes ANR-OK
(Bbls) ($/Bbl) (MMBtu) ($/MMBtu)
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2008 -- $109.125 42,100 $8.10
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2009 123,000 $109.125 243,100 $8.10
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2010 115,700 $109.125 230,500 $8.10
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2011 109,700 $109.125 218,700 $8.10
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2012 104,600 $109.125 208,700 $8.10
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Total 453,000 $109.125 943,100 $8.10
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About Legacy Reserves LP
Legacy 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 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.globenewswire.com/newsroom/prs/?pkgid=3201