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LRR Energy, L.P. Announces Closing Of Acquisition Of Oil And Gas Properties From Lime Rock Resources And Updated 2012 Guidance

LRR Energy, L.P. (NYSE: LRE) ("LRE" or "LRR Energy") announced today that on June 1, 2012 it closed its previously announced acquisition from its sponsor, Lime Rock Resources. LRE acquired predominantly mature, oil weighted properties in the Permian Basin region of New Mexico and onshore Gulf Coast region of Texas for a purchase price of $67.0 million subject to customary purchase price adjustments.

After its semi-annual redetermination and in conjunction with the closing on June 1, 2012, LRE’s borrowing base under its credit facility was redetermined at $240.0 million, which we believe provides ample financial flexibility to execute our capital program and distribution strategy. Based on adjustments from the effective date, LRE closed the acquisition with $65.1 million and currently has approximately $222.8 million of debt outstanding under its credit facility.

Additionally, LRR Energy announced the following revised guidance for full year 2012:
  • Production to average 5,900 – 6,300 Boe per day
  • LOE on a Boe of production basis to average $9.25 – $9.75
  • LRR Energy expects to spend approximately $25.7 million of total capital expenditures on the development of its oil and natural gas properties in 2012, including approximately $19.8 million of maintenance capital expenditures. Maintenance capital expenditures represent our estimate of the amount of capital required on average per year to maintain our production over the long term. We expect to spend the remaining $5.9 million of estimated expenditures primarily on cost cutting projects. On a go forward basis, we expect annual maintenance capital expenditures to be $21.0 million.

The revised 2012 guidance set forth above sets forth management’s best estimate based on current and anticipated market conditions and other factors. While LRR Energy believes that these estimates and assumptions are reasonable, they are inherently uncertain and are subject to significant business, economic, regulatory, environmental and competitive risks and uncertainties that could cause actual results to differ materially from those we anticipate, as set forth under “Forward-Looking Statements.”

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