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Legend partnerships merge; close $900M Barnett Shale purchase

The Legend Natural Gas partnerships (composed of Legend Natural Gas II, LP, Legend Natural Gas III, LP and Legend Natural Gas IV, LP) have merged into one holding company and closed on the acquisition of $900 million in Barnett Shale assets from Range Resources Corp. (NYSE: RRC).

The new partnership, Legend Production Holdings LLC also closed on a $1.5 billion senior secured revolving facility which, along with additional contributed equity, funded the Range acquisition as well as future growth opportunities. The credit facility was funded by a syndication of banks led by Wells Fargo Securities and J.P. Morgan Chase.

Houston-based Legend Natural Gas announced its entry into the horizontal Barnett Shale resource play in early 2011. Assets acquired include 390 producing wells and approximately 52,000 net acres, 80% of which are located in the prolific core area of the Barnett trend. Daily net production from the properties was 113 Mmcfe per day (86% gas) as of February 1, 2011, the effective date of the purchase. Legend will serve as operator.

The Range acquisition follows a $99.2 million acquisition of conventional South Texas Vicksburg production from a subsidiary of Smith Production Co., which closed on March 31, 2011. Legend acquired a majority interest in the Samano and Santa Fe Fields located in Starr, Brooks, and Hidalgo Counties, Texas. The properties include 103 wells producing approximately 9 MMcfe per day net (65% gas) on 7,200 net acres. Legend will serve as operator.

Legend Production now owns an interest in approximately 800 operated, producing wells located in three core areas: the Fort Worth Basin, the Permian Basin and South Texas. Legend Production is currently exploring and developing its acreage position in the emerging Bone Spring/Avalon/Wolfcamp shale plays of the Delaware Basin in New Mexico and West Texas.

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

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