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Legacy Reserves LP Announces Fourth Quarter 2012 Results, Annual 2012 Results And 2013 Guidance

Stocks in this article: LGCY

MIDLAND, Texas, Feb. 25, 2013 (GLOBE NEWSWIRE) -- Legacy Reserves LP ("Legacy") (Nasdaq:LGCY) today announced annual and fourth quarter results for 2012 as well as financial guidance for 2013. Financial results contained herein are preliminary and subject to the audited financial statements included in Legacy's Form 10-K to be filed on or about February 27, 2013.

A summary of selected financial information follows. For consolidated financial statements, please see accompanying tables.

  Three Months Ended Twelve Months Ended
  December 31, September 30, December 31,
  2012 2012 2012 2011
  (dollars in millions)
Production (Boe/d)  15,729  14,772  14,811  13,071
Revenue $90.5 $84.2 $346.5 $336.9
Adjusted EBITDA (*) $51.6 $49.5 $197.6 $201.4
Development capital expenditures $19.7 $19.6 $68.2 $71.6
Distributable Cash Flow (*) $24.7 $23.7 $104.5 $107.8
* Non-GAAP financial measure. Please see Adjusted EBITDA and Distributable Cash Flow table at the end of this press release for a reconciliation of these measures to their nearest comparable GAAP measure.

2012 highlights include:

  • 13% increase in production to 14,811 Boe/d from 13,071 Boe/d in 2011 primarily due to (i) $635.4 million of acquisitions of producing properties during 2012, which only includes twelve days of production from our $502.6 million Permian Basin acquisition from Concho Resources Inc. ("2012 COG Acquisition"), (ii) a full-year impact of our 2011 acquisitions, and (iii) $68.2 million of development capital expenditures during 2012.   
  • 31% increase in year-end proved reserves to 83.2 MMBoe (88% PDP, 68% liquids) compared to 63.4 MMBoe (85% PDP, 68% liquids) as of year-end 2011 primarily driven by a 27.0 MMBoe increase from acquisitions partially offset by a 5.4 MMBoe decrease from production and a 2.4 MMBoe decrease from lower commodity prices.  
  • Adjusted EBITDA of $197.6 million, the second highest in our history despite lower realized commodity prices and higher workover and other unusual well failure expenses.

Q4 2012 highlights include:

  • 6% increase in production to 15,729 Boe/d from 14,772 Boe/d in the prior quarter primarily due to $519.8 million of acquisitions during the quarter including twelve days of production (approximately 640 Boe/d for the quarter) from our 2012 COG Acquisition, our development activity in the Wolfberry, and an outstanding horizontal Bone Spring well that began producing in November.  
  • 4% increase in Adjusted EBITDA to $51.6 million from $49.5 million during the third quarter.  
  • Ninth consecutive increase in our quarterly distribution, ending the year at $0.57 per unit which represents 3.6% year-over-year growth.  
  • To finance our recent acquisition and prepare for potential future acquisitions, (i) closed our largest equity offering in November providing $218.0 million in net proceeds, (ii) gained first-time access to the high yield market through our $300 million 8% senior notes offering, and (iii) increased our borrowing base for the third time in 2012 to $800 million with a newly-expanded 20-member bank group.

Cary D. Brown, Chairman, President and Chief Executive Officer of Legacy Reserves GP, LLC, the general partner of Legacy, commented: "2012 was a landmark year for Legacy, as we closed the largest acquisition in our history on December 20, the $502.6 million acquisition of Permian Basin properties from Concho. These properties are in some of the most prolific fields in the Permian Basin. With the exception of the Lower Abo, these properties provide us with a strong set of mature PDP assets with modest production decline rates as well as a very strong portfolio of proved and unproved drilling locations and developed, non-producing projects. Our integration of this acquisition is going smoothly thus far, and since assuming operations on January 1, our operations group is even more excited about the asset potential they are seeing.

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