MIDLAND, Texas, Nov. 7, 2012 (GLOBE NEWSWIRE) -- Legacy Reserves LP ("Legacy") (Nasdaq:LGCY) today announced it has entered into an agreement to purchase Permian Basin oil and natural gas properties from Concho Resources Inc. for $520 million in cash, subject to customary purchase price adjustments. Legacy anticipates closing to occur in December and to finance the transaction with the proceeds from a public equity offering and borrowings under its revolving credit facility, or subject to market conditions, proceeds from the issuance of private or public debt securities. Highlights of this acquisition are as follows:
- Estimated proved reserves of approximately 25.6 MMBoe, 71% of which are proved developed producing ("PDP"), 14% are proved developed non-producing, and 15% are proved undeveloped
- Proved reserves are approximately 90.5% operated, and estimated to be 62% oil and 38% natural gas
- Estimated PDP production from the current 1,584 producing wells is 5,238 Boe/d for the three months ending March 31, 2013 (Legacy's expected first full quarter of ownership), yielding a total proved reserves-to-production ratio of 13.4 years
- 100% of the reserves are located in counties where Legacy currently has operations or adjacent thereto, and over 99.8% of these reserves are in the Permian Basin
- Significant geographic overlap leverages operational expertise and existing field-level infrastructure
- Acreage associated with the acquisition is expected to support substantial long-term development potential including 236 currently identified development locations
- 2013 estimated cash flow from operations of approximately $80 million
Cary Brown, Chairman, President and CEO, commented, "We are very excited to announce this landmark acquisition of Permian Basin assets from Concho. These assets are in some of the most prolific fields in the Permian Basin and contain proved reserves that are largely PDP, making them well-suited for our MLP model. We have identified a significant number of attractive development projects, and believe we will find additional opportunities to improve production as we have consistently done in the past. Because the assets are essentially in our backyard, we expect to benefit from our operational expertise and existing field-level infrastructure."
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 www.LegacyLP.com.
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Cautionary Statement Relevant to Forward-Looking Information
This press release contains forward-looking statements relating to our 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. 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 and quarterly reports filed with the Securities and Exchange Commission. 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.