Company Overview

Company Background

Legacy Reserves LP (NASDAQ – LGCY) is an independent oil and natural gas limited partnership headquartered in Midland, Texas, and is 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. We were formed in October 2005 to own and operate the oil and natural gas properties that we acquired from our founding investors and three charitable foundations in connection with the closing of our private equity offering on March 15, 2006. On January 18, 2007, we completed our initial public offering.

Our primary business objective is to generate stable cash flows allowing us to make cash distributions to our unitholders and to support and increase quarterly cash distributions per unit over time through a combination of acquisitions of new properties and development of our existing oil and natural gas properties.

Key Statistics
Our oil and natural gas production and reserve data as of December 31, 2010 are as follows:

• we had proved reserves of approximately 52.8 MMBoe, of which 74% were oil and natural gas liquids ("NGLs") and 86% were classified as proved developed producing, 2% were proved developed non-producing, and 12% were proved undeveloped;
• our proved reserves had a standardized measure of $774.8 million; and
• our proved reserves to production ratio was approximately 14.0 years based on the average daily net production of 10,337 Boe/d (approximately 70% operated) for the three months ended December 31, 2010.

We have grown primarily through two activities: the acquisition of producing oil and natural gas properties and the development of properties in established producing trends. From 2007 through 2010, we completed 65 acquisitions of oil and natural gas properties for a total of approximately $705 million, excluding $49.2 million of non-cash asset retirement obligations. These acquisitions of primarily long-lived, oil-weighted assets, along with our ongoing development activities and operational improvements, have allowed us to achieve significant operational and financial growth during this time period.