Legacy Reserves announces its 2013 capital budget
Wednesday, January 23, 2013
- The fourth quarter was a pivotal time for Legacy as they announced and closed their largest acquisition, issued their inaugural senior notes and completed their largest equity offering.
Legacy Reserves LP (Nasdaq:LGCY) announced that the Board of Directors of its general partner has approved a cash distribution attributable to the fourth quarter of 2012 of $0.57 per unit, payable on February 14, 2013, to unitholders of record at the close of business on February 1, 2013. This quarterly distribution is a $0.005 increase from the prior quarter and represents an annualized distribution of $2.28 per unit. On a year-over-year basis, Legacy's quarterly distribution has increased 3.6%.
In addition, Legacy announced the Board of Directors approved a 2013 development capital budget of $90 million of which $68 million will be considered maintenance capital. Cary D. Brown, Chairman and Chief Executive Officer of Legacy Reserves GP, LLC, the general partner of Legacy said, "Given our high-quality asset base and significant development opportunities following the Concho acquisition, we believe our best course of action for Legacy unitholders is to increase our capital budget and timely develop our properties rather than slowing our capital spend and diminishing present value. Establishing our 2013 maintenance capital responds to many of our unitholders' requests and more closely aligns us to our peers in the calculation of Distributable Cash Flow.
"The fourth quarter was a pivotal time for Legacy as we announced and closed our largest acquisition, issued our inaugural senior notes and completed our largest equity offering. We are excited with initial indications from our Concho acquisition that closed on December 20, 2012. However, we continued to experience wider-than-normal oil differentials in the Permian which negatively impacted our cash flow. We are starting to see this price difference narrow and are pleased with our preliminary normalized financial results. To address this exposure going forward, we have hedged the Midland-to-Cushing oil differential at $1.47 per barrel for Q2-Q4 2013 for virtually all of our estimated PDP Permian production. We are excited about our expanded asset profile, increased employee base, and our path forward in 2013 and beyond," said Mr. Brown.
Legacy will provide the details of its fourth quarter and annual 2012 operating and financial performance with its earnings report which is scheduled to be released on Monday, February 25, 2013, following the close of NASDAQ trading.
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