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Legacy Reserves LP enters into agreements to purchase East Texas properties and assets

Legacy Reserves LP will enter a new basin in the East Texas region following the closing of agreements with affiliates of Anadarko Petroleum and Western Gas Partners
Legacy Reserves LP enters into agreements to purchase East Texas properties and assets

Legacy Reserves LP has announced that it has entered into separate agreements with affiliates of Anadarko Petroleum and Western Gas Partners to purchase natural gas properties and gathering and processing assets in East Texas for a combined US$440 million. These properties represent Legacy's entry into a new basin in East Texas and into meaningful gathering and processing operations supporting the natural gas properties. The closings of these transactions are expected to occur in 3Q, and the purchase prices remain subject to customary adjustments. Legacy anticipates funding these transactions with borrowings under its revolver. Highlights of this acquisition are as follows:

  • Estimated proved reserves of approximately 420 Bcfe of which 100% are natural gas, 95% are classified as proved developed producing, and 95% are operated
  • Estimated 3Q 2015 production of approximately 70 Mmcfe/d, yielding a proved reserves-to-production ratio of 16.4 years
  • Multi-year development plan centered on recompletions and workovers to further flatten production declines and extend the productive life of the fields
  • Significant additional drilling inventory in a higher gas price environment
  • 567 miles of high-pressure pipeline and low-pressure gathering lines and a 502 Mmcfe/d processing plant with access to five major gas markets
  • Expected NTM cash flow of approximately $60 million

"This acquisition represents a material entry into East Texas, a region we have wanted to enter for several years due to its long-lived, low-decline, low-cost nature and high potential for bolt-on acquisitions. These high-quality assets combined with the upside optionality of recompletions and a contango gas-curve make this a very attractive acquisition for us,” said Paul Horne, Legacy's president and CEO.

 

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