Businessweek

Legacy Reserves LP, an independent oil and natural gas company, focuses on the acquisition and development of oil and natural gas properties primarily located in the Permian Basin, Mid-Continent, and Rocky Mountain regions of the United States. As of December 31, 2011 the company owned interests in producing oil and natural gas properties in 498 fields in the Permian Basin, Texas Panhandle, Wyoming, Oklahoma and other states, operated 2,473 gross productive wells and owned non-operated interests in 3,483 gross productive wells. Oil and Natural Gas Properties and Projects The company’s significant fields are the Spraberry/War San, Texas Panhandle, East Binger, Jordan, Langlie Mattix, Denton, Fourbear/Fourbear Frank’s Fork and Farmer. Spraberry/War San Field: The Spraberry/War San field is located in Andrews, Howard, Midland, Martin, Reagan and Upton Counties, Texas. This Spraberry/War San field summary includes wells in the War San field which produce from the same formations and in the same area as its Spraberry field wells. This field produces fromSpraberry and Wolfcamp age formations from 5,000 to 11,000 feet. The company operates 200 active wells (198 producing, 2 injecting) in this field with working interests ranging from 5.5% to 100% and net revenue interests ranging from 4.2% to 90.8%. The company also owns another 122 non-operated wells (120 producing, 2 injecting). As of December 31, 2011, its properties in the Spraberry/War San field contained 11.1 MMBoe (67% liquids) of net proved reserves. 30 wells were drilled on Legacy Reserves’ properties in the Spraberry/War San field in 2011. The company identified 65 proved undeveloped projects, primarily 40-acre infill drilling locations, and 15 behind-pipe or proved developed non-producing re-completion projects in this field. Texas Panhandle Fields: The Texas Panhandle fields are located in Carson, Gray, Hartley, Hutchinson, Moore, Potter, Sherman and Wheeler Counties, Texas. The fields are produced from multiple formations of Permian age which primarily include the shallow Granite Wash, Brown Dolomite, and Red Cave formations from 2,500 to 4,000 feet. Legacy operates 584 wells (542 producing, 42 injecting) in the Texas Panhandle fields with working interests ranging from 33.3% to 100% and net revenue interests ranging from 25% to 100.0%. The company also owns another 415 non-operated wells (403 producing, 12 injecting). As of December 31, 2011, its properties in the Texas Panhandle fields contained 6.4 MMBoe (70% liquids) of net proved reserves. The average net daily production from these fields was 1,250 Boe/d in 2011. East Binger Field: The East Binger field is located in Caddo County, Oklahoma. The Marchand Sand, at depths of 9,700 to 10,100 feet, is the primary reservoir in the East Binger field. The East Binger Unit, the major property in the field, is an active miscible nitrogen injection project and is operated by Binger Operations, LLC (BOL), of which Legacy owns 50%. BOL operates 81 wells (56 producing, 25 injecting) in the East Binger field, and Legacy owns a working interest of 55.67% and net revenue interest of 46.9% in the East Binger Unit. As of December 31, 2011, the company’s properties in the East Binger field contained 3.3 MMBoe (84% liquids) of net proved reserves. Jordan Field: The Jordan field is located in Ector and Crane Counties, Texas. The field produces under waterflood from the San Andres Formation at depths of 3,100 to 3,800 feet. The company operates 70 wells (54 producing, 16 injecting) in the West Jordan Unit with a 53.1% working interest and a 39.8% net revenue interest. It also owns a 35.9% non-operated working interest and a 29.7% net revenue interest in the Jordan University Unit, which contains 180 wells (145 producing, 35 injecting). As of December 31, 2011, the company’s properties in the Jordan field contained 2.4 MMBoe (88% liquids) of net proved reserves. The average net daily production from the field was 573 Boe/d in 2011. Langlie Mattix Field: The Langlie Mattix field is located in Lea County, New Mexico. The Queen Formation at depths of 3,400 to 3,800 feet is the primary reservoir in the Langlie Mat