Legacy Reserves LP Acquisition and Commodity Swap Update
Legacy Reserves LP has pending acquisitions of $29.5 million of producing oil and natural gas properties and has closed $2.7 million of acquisitions during December 2007 and January 2008. All of the acquisitions are in the Permian Basin and Texas Panhandle. The pending acquisitions are expected to close in January 2008.
The closed and pending acquisitions have aggregate net production of 366 Boe/d, of which 68% are oil and natural gas liquids. These acquisitions have proved reserves of approximately 2.0 million Boe's, of which 99% are classified as proved developed producing. The proved reserves to production ratio is an estimated 14.8 years.
Cary Brown, Chairman and Chief Executive Officer, commented, "The new properties have numerous developmental drilling locations that will be evaluated for future drilling. These reserves represent additional interests in properties that Legacy acquired in late 2007. Thus, we expect that there will be no incremental administrative burden to manage these properties, and the impact of any drilling or production enhancement will have a greater impact on Legacy's bottom line."
Including the pending acquisitions described above, Legacy has acquired or agreed to acquire over $225 million of proved oil and natural gas properties since our IPO on January 12, 2007 through more than 17 transactions.
Related to the announced acquisitions, Legacy today entered into NYMEX WTI oil swaps and natural gas swaps. New WTI oil fixed price swaps are tabulated below. WTI swaps are used to mitigate risks associated with both oil and natural gas liquids sales as the price of natural gas liquids is highly correlated to that of WTI oil prices.
- Legacy Reserves Finalizes Acquisition in Permian Basin (Nov 15)
- Legacy Reserves Increases Borrowing Base to $410MM (Apr 01)
- Brigham to Divest West Texas Assets (Mar 29)