Legend Natural Gas IV spends $1B on conventional, unconventional acreage onshore US

Source: Legend Natural Gas IV

Legend Natural Gas IV, LP has signed two definitive purchase agreements to acquire oil and gas producing properties for a total combined price of approximately $1 billion subject to customary closing conditions and purchase price adjustments. 

One acquisition marks Legend's entry into the horizontal Barnett Shale resource play in the Fort Worth Basin of Texas while the other consists of conventional Vicksburg production which complements Legend's long standing position in South Texas. A significant number of recompletion and drilling opportunities exist on both new property bases. Legend will be the operator of the newly acquired properties. 

Legend will acquire the Barnett properties from a subsidiary of Range Resources Corporation for $900 million, subject to closing conditions and adjustments. The properties include 390 producing wells and approximately 52,000 net acres. Current daily net production from the properties is 113 Mmcfe per day (86% gas). The sale is expected to close in late April with an effective date of February 1, 2011. 

In addition, Legend will acquire a majority interest in the Samano and Santa Fe Vicksburg fields from Smith Production Inc. for $99.2 million subject to closing conditions and adjustments. The fields are in Starr and Hidalgo Counties, Texas, located 20 miles from Legend's West La Grulla Field. The properties include 83 operated wells which are producing 8.8 Mmcfe per day net (65% gas) and approximately 7,200 net acres. Closing of the sale is expected in late March with an effective date of January 1, 2011. 

Equity for the Partnerships is being provided by the Riverstone/Carlyle Global Energy and Power Funds, a group of energy-focused private equity funds managed by Riverstone Holdings LLC. 

Legend Natural Gas IV, LP is a Houston based, Delaware Limited Partnership formed in 2009 for the purpose of acquiring, developing and exploring for natural gas and oil reserves in onshore U.S. basins. Legend Natural Gas IV, LP is managed by Legend Natural Gas, LLC, which also manages two other active limited partnerships: Legend Natural Gas II, LP and Legend Natural Gas III, LP. Through these partnerships, Legend operates over 400 wells in the Gulf Coast, South Texas and the Permian Basin. The first partnership, Legend Natural Gas, LP, was formed in 2001 by James A. Winne III and Michael Becci who continue on at Legend as President and CEO and Vice President and CFO, respectively.

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