Legend Natural Gas IV, LP Closes on $900 Million Barnett Shale Acquisition

HOUSTON, May 2, 2011 /PRNewswire/ -- The Legend Natural Gas partnerships (composed of Legend Natural Gas II, LP, Legend Natural Gas III, LP and Legend Natural Gas IV, LP, collectively referred to as "Legend"), along with their equity sponsor Riverstone Holdings LLC ("Riverstone"), today announced the execution of several transactions which will significantly increase reserves and production, improve operational and administrative efficiencies and position Legend for future growth.

Chief among the transactions:

• The three existing Legend partnerships were contributed into a new holding company called Legend Production Holdings, LLC ("Legend Production").
• Immediately following the contribution, Legend closed on its previously announced purchase of a subsidiary of Range Resources Corporation's ("Range") Barnett Shale assets in the Fort Worth Basin for $900 million.
• Legend Production, together with its affiliated partnerships, closed a $1.5 billion senior secured revolving facility which, along with additional contributed equity, funded the Range acquisition as well as future growth opportunities. The credit facility was funded by a syndication of banks led by Wells Fargo Securities and J.P. Morgan Chase.

The Barnett assets acquired from Range include 390 producing wells and approximately 52,000 net acres, 80% of which are located in the prolific core area of the Barnett trend. Daily net production from the properties was 113 Mmcfe per day (86% gas) as of February 1, 2011, the effective date of the purchase. The acquisition marks Legend's entry into the horizontal Barnett Shale resource play, making it the fifth largest producer in the play. Legend is the operator of the newly acquired properties.

The Range acquisition follows the recent acquisition of conventional South Texas Vicksburg production from a subsidiary of Smith Production Company, which closed on March 31, 2011 for $99.2 million. Effective January 1, 2011, Legend acquired a majority interest in the Samano and Santa Fe Fields located in Starr, Brooks and Hidalgo Counties, Texas. The properties include 103 wells producing approximately 9 Mmcfe per day net (65% gas) on 7,200 net acres. Legend is the operator of the newly acquired properties.

As a result of the Range and Smith acquisitions and the combination of the partnerships, Legend Production has become a significant oil and natural gas company with a large presence in some of the most desirable oil and natural gas regions in the United States. Legend expects the combined entity to have average daily net production of approximately 200 Mmcfe per day in 2011. The combination will also create a more efficient and flexible operating structure.

Legend Production now owns an interest in approximately 800 operated, producing wells located in three core areas: the Fort Worth Basin, the Permian Basin and South Texas. Legend Production expects to increase production through efficient development of its proved reserve base, disciplined exploration, and strategic acquisitions. Legend Production is currently exploring and developing its acreage position in the emerging Bone Spring/Avalon/Wolfcamp shale plays of the Delaware Basin in New Mexico and West Texas.

Equity for all of the Legend partnerships is provided by the Riverstone/Carlyle Global Energy and Power Funds, a group of energy-focused private equity funds managed by Riverstone Holdings LLC.

About Legend Production Holdings, LLC

Legend Production Holdings, LLC is a holding company composed of Legend Natural Gas II, LP, Legend Natural Gas III, LP and Legend Natural Gas IV, LP.  Legend Production is headquartered in Houston and is focused on acquiring and developing long-lived oil and natural gas properties primarily in prolific basins around Texas, including areas of South Texas, the Fort Worth Basin (Barnett Shale) and the Permian Basin. The first Legend partnership, Legend Natural Gas, LP, was formed in 2001 by James A. Winne III and Michael Becci, serving as President and CEO and Vice President and CFO, respectively.  It was the first  portfolio company funded by Riverstone/Carlyle Global Energy and Power Funds in the exploration and production sector.  The partnership acquired and developed producing properties in South Texas until the sale of its assets to Chesapeake Energy in 2004.  Legend Natural Gas II, LP was then formed in 2004 followed by the formation of Legend Natural Gas III, LP in 2006 and Legend Natural Gas IV, LP in 2009. These Legend partnerships continue today as Legend Production under the same experienced management team led by James A. Winne III and Michael Becci.  The relationship between Legend and Riverstone is the longest of any Riverstone portfolio company.  Riverstone has invested $1 billion in upstream assets through the various Legend partnerships.

About Riverstone Holdings LLC:

Riverstone Holdings LLC, an energy and power-focused private equity firm founded in 2000, has approximately $17 billion under management across six investment funds, including the world's largest renewable energy fund.  Riverstone conducts buyout and growth capital investments in the midstream, exploration & production, oilfield services, power and renewable sectors of the energy industry.  With offices in New York, London and Houston, the firm has committed approximately $15.9 billion to 77 investments in North America, Latin America, Europe and Asia.  For more information, visit www.riverstonellc.com.

Contact:
For Legend Production Holdings, LLC:
James Winne
281-644-5914

For Riverstone Holdings LLC:
Jeffrey Taufield or James David
Kekst and Company
212-521-4800

SOURCE Riverstone Holdings LLC