MIDLAND, Texas, Jan. 23, 2015 (GLOBE NEWSWIRE) -- Legacy Reserves LP ("Legacy") (Nasdaq:LGCY) today announced that the Board of Directors of its general partner has approved a cash distribution attributable to the fourth quarter of 2014 of $0.61 per unit, payable on February 13, 2015, to unitholders of record at the close of business on February 2, 2015.
Legacy's general partner also declared a cash distribution for both its 8% Series A Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units and its 8% Series B Fixed-to-Floating Rate Cumulative Redeemable Perpetual Preferred Units of $0.166667 per unit payable on February 17, 2015 to preferred unitholders of record on February 2, 2015.
The Board also approved a 2015 capital budget of $30 million as compared to approximately $130 million in 2014. Cary D. Brown, Chairman, President and Chief Executive Officer of Legacy's general partner, commented: "The dramatic drop in oil and gas prices has directly impacted our asset-level project returns. While we have commodity hedges in place to insulate our near-term cash flow at the partnership level, it simply does not make economic sense to pursue new drilling projects in this market environment as they do not generate a sufficient return for the company. We are encouraged that our third-party service providers have already begun to reduce prices, but we will need to see further reductions prior to reinstating our prior capital spending levels.
"We also realize that if the current price environment is a longer term cycle, we will not be able to continue to distribute to our common unitholders at these levels. We have always taken a long-term view on distributions and we do not believe the current commodity outlook is sustainable. We have a strong balance sheet and near-term hedges to mitigate against this dramatic downturn. With our retail investors in mind, we believe it is best to maintain our distribution level this quarter to give us more time to assess our long-term distribution capabilities in a more stabilized market. We appreciate our retail unitholders and believe this strategy gives them time to plan around any possible reduction in future distributions. We are hopeful that with good acquisitions and some price improvement, a distribution reduction will not be necessary. However, we remain committed to only distributing what the assets allow over a longer-term period.
"We are thankful for our hard-working employees, long-lived and low-decline asset base, protective commodity hedges, and incredibly strong balance sheet that will help protect us this year. We are hopeful that these difficult industry conditions can present the kinds of unique and large-scale opportunities that we have benefited from in our past. We look forward to sharing our thoughts around our 2015 outlook at our upcoming year-end earnings call."
Legacy will provide the details of its fourth quarter and 2014 operating and financial performance with its earnings report which is scheduled to be released on Wednesday, February 25, 2015, following the close of NASDAQ trading.
Earnings Conference Call
A teleconference and webcast will be held on Thursday, February 26, 2015, beginning at 9:00 a.m. Central Time. Those wishing to participate in the conference call should dial 877-266-0479. A replay of the call will be available through Thursday, March 5, 2015, by dialing 855-859-2056 or 404-537-3406 and entering replay code 70464452. Those wishing to listen to the live or archived webcast via the Internet should go to the Investor Relations tab of our website at www.LegacyLP.com.
About Legacy Reserves LP
Legacy Reserves LP is a master 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. Additional information is available at www.LegacyLP.com.
Cautionary Statement Relevant to Forward-Looking Information
This press release contains forward-looking statements relating to our operations that are based on management's current expectations, estimates and projections about its operations. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "schedules," "estimated," and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are realized oil and natural gas prices; production volumes, lease operating expenses, general and administrative costs and finding and development costs; future operating results and the factors set forth under the heading "Risk Factors" in our annual and quarterly reports filed with the Securities and Exchange Commission. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, Legacy undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
This release is intended to be a qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers and nominees should treat one hundred percent (100.0%) of Legacy's distributions to foreign investors as being attributable to income that is effectively connected with a United States trade or business. Accordingly, Legacy's distributions to foreign investors are subject to federal income tax withholding at the highest applicable rate.
CONTACT: Legacy Reserves LP Dan Westcott Executive Vice President and Chief Financial Officer 432-689-5200
Source:Legacy Reserves LP