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    Legacy Reserves acquires Permian Basin assets from Concho for $520M

    Legacy Resources LP

    Legacy Reserves LP (Nasdaq: LGCY) has entered into an agreement to purchase Permian Basin oil and natural gas properties from Concho Resources Inc. (NYSE: CXO) for $520 million in cash.

    Legacy anticipates closing to occur in December and to finance the transaction with the proceeds from a public equity offering and borrowings under its revolving credit facility, or subject to market conditions, proceeds from the issuance of private or public debt securities. Highlights of this acquisition are as follows:

    • Estimated proved reserves of approximately 25.6 MMBoe, 71% of which are proved developed producing (PDP), 14% are proved developed non-producing, and 15% are proved undeveloped
    • Proved reserves are approximately 90.5% operated, and estimated to be 62% oil and 38% natural gas
    • Estimated PDP production from the current 1,584 producing wells is 5,238 Boe/d for the three months ending March 31, 2013 (Legacy's expected first full quarter of ownership), yielding a total proved reserves-to-production ratio of 13.4 years
    • 100% of the reserves are located in counties where Legacy currently has operations or adjacent thereto, and over 99.8% of these reserves are in the Permian Basin
      Significant geographic overlap leverages operational expertise and existing field-level infrastructure
    • Acreage associated with the acquisition is expected to support substantial long-term development potential including 236 currently identified development locations
      2013 estimated cash flow from operations of approximately $80 million

    Cary Brown, chairman, president and CEO, commented, "We are very excited to announce this landmark acquisition of Permian Basin assets from Concho. These assets are in some of the most prolific fields in the Permian Basin and contain proved reserves that are largely PDP, making them well-suited for our MLP model."

    The sale is expected to close by the end of the fourth quarter of 2012 and is subject to customary closing conditions and purchase price adjustments.  RBC Richardson Barr served as Concho's advisor in connection with the sale.

    Legacy Reserves LP is an independent oil and natural gas limited partnership headquartered in Midland, Texas, focused 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.

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