Legacy Reserves LP Announces Closing Of Oil And Gas Property Purchases

MIDLAND, Texas, Dec. 27, 2010 (GLOBE NEWSWIRE) -- Legacy Reserves LP ("Legacy") (Nasdaq:LGCY) announced that on December 22, 2010, it closed the previously announced acquisition of Permian Basin oil and natural gas properties from Concho Resources Inc. The purchase price after closing adjustments was $103.3 million, which is subject to customary post-closing adjustments.   The properties produce an estimated 1,419 barrels of oil equivalent ("Boe") per day, of which 47% is oil. Proved reserves are estimated to be 5.8 MMBoe, 88% of which are considered proved developed producing ("PDP"). In the aggregate, the natural gas being acquired sells at a premium to Henry Hub natural gas prices due to its natural gas liquids content, giving Legacy exposure to NGL prices. Approximately 60% of the properties are operated, and over 95% of the properties are near Legacy's existing operations in multiple counties throughout the Permian Basin. Legacy financed the acquisition with net proceeds of $83.8 million from its equity offering which closed on November 23, 2010, with the balance funded from its existing credit facility and available cash.

Additionally, Legacy closed on December 22, 2010, an acquisition of a Permian Basin property for $1.4 million cash. The Lea County, New Mexico oil well produces approximately 17 Boepd, 86% of which is oil. Proved developed producing reserves are estimated to be 54,000 barrels of oil equivalent. The acquisition was funded with available cash.

In November, 2010, Legacy closed the acquisition of Powder River Basin oil properties for $6.6 million cash, subject to post-closing adjustments. Legacy acquired additional interests in a field it operates along with the operations and ownership of the adjacent oil field, both located in Wyoming. Net production is 82 Bopd with proved developed producing reserves of 300,000 barrels of oil. The acquisition was funded with its existing credit facility.

Steven H. Pruett, President and Chief Financial Officer commented, "We continue to be active in the acquisition arena, adding to positions in areas where we currently operate. This has enabled us to increase our production volumes and cash flow, and realize operating synergies in the process. We have also been active in drilling our Wolfberry locations near Midland, Texas, with overall results meeting or exceeding our expectations."