Legacy Reserves LP announced it entered into a definitive purchase agreement to acquire certain oil and natural gas producing properties from a third party for an aggregate purchase price of $82 million, subject to customary purchase price adjustments. The properties are primarily located in the Permian Basin and to a lesser degree in Oklahoma and Kansas.
Operational highlights for the properties transaction include estimated proved reserves of approximately 4.1 million Boe, 80% proved developed producing reserves, 67% of value is operated, proved reserves to production ratio of approximately 14 years, and current net production of approximately 793 Boe per day.
The purchase of the subject properties will be funded with borrowings from our revolving credit facility and, if certain conditions are met, issuance of units to the seller, which is expected to reduce the cash portion of the purchase price to $55 million, subject to closing and post-closing adjustments. Our current borrowing base of $225 million is scheduled to be reviewed by our bank group with any increase effective April 1, 2008.
We expect the acquisition to be immediately accretive to distributable cash flow per unit and that management will recommend to the Board of Directors of the general partner of Legacy Reserves LP to increase the distribution with respect to the first quarter of 2008 payable in second quarter of 2008.
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