Legacy Reserves LP Announces Cash Distributions, Provides Update to Select Operating & Financial Information, Presents at IPA...
April 20 2015 - 6:00AM
Legacy Reserves LP ("Legacy") (Nasdaq:LGCY) today announced:
- Cash distributions of $0.166667 per unit for the 8% Series A
(Nasdaq:LGCYP) and 8% Series B (Nasdaq:LGCYO) Fixed-to-Floating
Rate Cumulative Redeemable Perpetual Preferred Units payable on May
15, 2015 to the respective holders of record on May 1, 2015
- Cash distribution attributable to the first quarter of 2015 of
$0.35 per unit payable on May 15, 2015 to unitholders of record on
May 1, 2015
- Expected 2015 distribution coverage of greater than 1.3x
- Reaffirmed 2015 capital budget of $30 million of which
approximately 45% was spent in Q1
- Updated hedge position providing greater cash flow protection
from sustained lower oil prices in summer 2015 and
Midland-to-Cushing differentials
- Reaffirmed borrowing base of $700 million and current liquidity
of approximately $570 million
- Participation at the 2015 IPAA OGIS conference in New York
- Q1 2015 earnings teleconference call details
Paul T. Horne, President and Chief Executive Officer of Legacy's
general partner, said, "In response to the sustained steep decline
in commodity prices, we have reduced our quarterly distribution to
$0.35 per unit to more accurately reflect the cash flow generation
of our assets at these commodity prices. This marks the first time
we have ever reduced our distribution and it's a decision that was
not taken lightly, but instead was made after thorough analyses of
the best options available given the current price environment. We
continue to execute our $30 million capital spending budget and are
realizing better-than-expected reductions in operating and capital
costs. Our employees are doing a terrific job at driving down
costs. With our new distribution level and current hedge portfolio,
we expect to generate over 1.3x distribution coverage in 2015 and,
absent any acquisitions, plan to use excess cash to repay debt.
"We remain active in our business development efforts. Year to
date we have evaluated more than $1 billion worth of asset
acquisition opportunities that fit our MLP profile. We will
continue to take a patient approach to acquisitions and expect to
have an opportunity to utilize our liquidity in making a
significant acquisition in 2015. We have also kick-started our
efforts to monetize portions of our undeveloped Permian acreage as
we attempt to balance maximizing the value of our assets with
maintaining our low production decline profile. Currently, we
believe a DrillCo structure may be our best option given our
broad-based Permian footprint and the strength and expertise of our
technical and operating teams. We believe that structure has the
ability to effectively harness capital at attractive rates and
further enhance the stability and longevity of our business. In
spite of the low commodity price environment, we remain excited
about our opportunities. We look forward to presenting at the IPAA
OGIS conference and hosting our upcoming earnings call."
Commodity Derivative Contracts
We enter into oil and natural gas derivative contracts to help
mitigate the risk of changing commodity prices. As of April 17,
2015, we have entered into derivative agreements to receive average
NYMEX WTI crude oil prices and NYMEX Henry Hub, Waha, NWPL, NGPA,
SoCal, San Juan and CIG-Rockies natural gas prices as summarized
below:
WTI Crude Oil Swaps:
Period |
Volumes (Bbls) |
Average Price per
Bbl |
Price Range per
Bbl |
Q2-Q4 2015 |
914,735 |
$79.14 |
$52.00 - $100.20 |
2016 |
228,600 |
$87.94 |
$86.30 - $99.85 |
2017 |
182,500 |
$84.75 |
$84.75 |
WTI Crude Oil 3-Way Collars:
Period |
Volumes
(Bbls) |
Average Short Put
Price per Bbl |
Average Long Put
Price per Bbl |
Average Short Call
Price per Bbl |
Q2-Q4 2015 |
997,400 |
$64.87 |
$89.60 |
$111.39 |
2016 |
621,300 |
$63.37 |
$88.37 |
$106.40 |
2017 |
72,400 |
$60.00 |
$85.00 |
$104.20 |
WTI Crude Oil Enhanced Swaps:
Period |
Volumes
(Bbls) |
Average Short Put
Price per Bbl |
Average Swap
Price per Bbl |
Q2-Q4 2015 |
688,000 |
$77.01 |
$93.79 |
Period |
Volumes
(Bbls) |
Average Long Put
Price per Bbl |
Average Short
Put Price per Bbl |
Average
Swap Price per Bbl |
2016 |
183,000 |
$57.00 |
$82.00 |
$91.70 |
2017 |
182,500 |
$57.00 |
$82.00 |
$90.85 |
2018 |
127,750 |
$57.00 |
$82.00 |
$90.50 |
Midland-to-Cushing WTI Crude Oil Differential Swaps:
Period |
Volumes (Bbls) |
Average Price per
Bbl |
Price Range per
Bbl |
Q2-Q4 2015 |
2,475,000 |
($1.77) |
($1.65) |
- |
($1.90) |
2016 |
732,000 |
($1.75) |
($1.75) |
|
|
Natural Gas Swaps (Henry Hub, Waha and CIG-Rockies):
Period |
Volumes
(MMBtu) |
Average
Price per MMBtu |
Price Range per MMBtu |
Q2-Q4 2015 |
13,963,300 |
$4.39 |
$3.98 |
- |
$5.82 |
2016 |
1,419,200 |
$4.30 |
$4.12 |
- |
$5.30 |
Natural Gas 3-Way Collars (Henry Hub):
Period |
Volumes
(MMBtu) |
Average Short
Put Price per
MMBtu |
Average Long
Put Price per
MMBtu |
Average Short
Call Price per
MMBtu |
Q2-Q4 2015 |
6,030,000 |
$3.66 |
$4.21 |
$5.01 |
2016 |
5,580,000 |
$3.75 |
$4.25 |
$5.08 |
2017 |
5,040,000 |
$3.75 |
$4.25 |
$5.53 |
Natural Gas Basis Swaps (NWPL, NGPA, SoCal, San Juan and
Waha):
|
Q2-Q4
2015 |
|
Volumes
(MMBtu) |
Average
Price per MMBtu |
NWPL |
9,000,000 |
$(0.13) |
NGPL |
360,000 |
$(0.15) |
SoCal |
180,000 |
$0.19 |
San Juan |
360,000 |
$(0.12) |
WAHA |
4,500,000 |
$(0.10) |
Location and quality differentials attributable to our
properties are not reflected in the above prices. The agreements
provide for monthly settlement based on the difference between the
agreement fixed price and the actual reference oil and natural gas
index prices.
Presenting at 2015 IPAA OGIS New York
Mr. Horne and James Daniel Westcott, Executive Vice President
and Chief Financial Officer, will present at IPAA's 2015 Oil and
Gas Investment Symposium (OGIS) in New York on Monday, April 20,
2015, at 10:00 a.m. Eastern Time. The presentation slides and
webcast will be available on Legacy's website at
www.LegacyLP.com.
Q1 2015 Earnings
Legacy will provide details of its first quarter operating and
financial performance with its earnings report which is scheduled
to be released on Wednesday, May 6, 2015, following the close of
NASDAQ trading.
A teleconference and webcast will be held on Thursday, May 7,
2015, beginning at 9:00 a.m. Central Time. Those wishing to
participate in the conference call should dial 877-266-0479. A
replay of the call will be available through Thursday, May 14,
2015, by dialing 855-859-2056 or 404-537-3406 and entering replay
code 24970195. Those wishing to listen to the live or archived
webcast via the Internet should go to the Investor Relations tab of
our website at www.LegacyLP.com.
About Legacy Reserves LP
Legacy Reserves LP is a master limited partnership headquartered
in Midland, Texas, focused on the acquisition and development of
oil and natural gas properties primarily located in the Permian
Basin, Rocky Mountain and Mid-Continent regions of the United
States. Additional information is available at
www.LegacyLP.com.
Cautionary Statement Relevant to Forward-Looking
Information
This press release contains forward-looking statements relating
to our operations that are based on management's current
expectations, estimates and projections about its operations. Words
such as "anticipates," "expects," "intends," "plans," "targets,"
"projects," "believes," "seeks," "schedules," "estimated," and
similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
other factors, some of which are beyond our control and are
difficult to predict. Among the important factors that could cause
actual results to differ materially from those in the
forward-looking statements are realized oil and natural gas prices;
production volumes, lease operating expenses, general and
administrative costs and finding and development costs; future
operating results and the factors set forth under the heading "Risk
Factors" in our annual and quarterly reports filed with the
Securities and Exchange Commission. Therefore, actual outcomes
and results may differ materially from what is expressed or
forecasted in such forward-looking statements. The reader should
not place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. Unless legally
required, Legacy undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. This press release does not constitute
an offer to sell or the solicitation of an offer to buy any
security and shall not constitute an offer, solicitation or sale of
any securities in any jurisdiction in which such offering,
solicitation or sale would be unlawful.
Withholding Information
This release is intended to be a qualified notice under Treasury
Regulation Section 1.1446-4(b). Brokers and nominees should treat
one hundred percent (100.0%) of Legacy's distributions to foreign
investors as being attributable to income that is effectively
connected with a United States trade or business. Accordingly,
Legacy's distributions to foreign investors are subject to federal
income tax withholding at the highest applicable rate.
CONTACT: Legacy Reserves LP
Dan Westcott
Executive Vice President and Chief Financial Officer
432-689-5200
Legacy Reserves Inc. (MM) (NASDAQ:LGCY)
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