Legacy Reserves downgraded to Underweight from Neutral at JPMorgan JPMorgan downgraded Legacy Reserves to Underweight as it sees total return of less than 10% in 2014. The firm lowered its price target for shares to $25 from $28.
Legacy Reserves announces $440M acquisition of assets in East Teaxas Legacy Reserves (LGCY) announced it has entered into separate agreements with affiliates of Anadarko Petroleum (APC) and Western Gas Partners (WES) to purchase natural gas properties and gathering and processing assets in East Texas for a combined $440M. These properties represent Legacy's entry into a new basin in East Texas and into meaningful gathering and processing operations supporting the natural gas properties. The closings of these transactions are expected to occur in the third quarter, and the purchase prices remain subject to customary adjustments. Legacy anticipates funding these transactions with borrowings under its revolver. Highlights of this acquisition are as follows: Estimated proved reserves of approximately 420 Bcfe of which 100% are natural gas, 95% are classified as proved developed producing, and 95% are operated. Estimated Q3 production of approximately 70 Mmcfe/d, yielding a proved reserves-to-production ratio of 16.4 years. Multi-year development plan centered on recompletions and workovers to further flatten production declines and extend the productive life of the fields Significant additional drilling inventory in a higher gas price environment. 567 miles of high-pressure pipeline and low-pressure gathering lines and a 502 Mmcfe/d processing plant with access to 5 major gas markets. Expected NTM cash flow of approximately $60M.