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Legend Natural Gas Enters Barnett with Range Assets

Legend Natural Gas IV LP stepped forward Thursday as the buyer of Range Resources Corp. Barnett Shale assets. Legend said it had struck two deals totaling $1 billion, one of them with Range in the Barnett of North Texas.

The deal with Range -- which recently announced the sale of its Barnett holdings so it could focus more on the Marcellus Shale in the Appalachian Basin (see Shale Daily, March 2) -- marks Legend's entry into the horizontal Barnett Shale. The other Legend deal consists of conventional Vicksburg production, which complements the company's position in South Texas, it said.

"A significant number of recompletion and drilling opportunities exist on both new property bases," said Legend, which will be the operator.

Legend will acquire the Barnett properties from a Range subsidiary for $900 million, subject to conditions and adjustments. The properties include 390 producing wells and about 52,000 net acres. Current daily net production from the properties is 113 MMcfe/d (86% gas), Legend said. The sale is expected to close in late April with an effective date of Feb. 1, 2011.

In addition, Legend will acquire a majority interest in the Samano and Santa Fe Vicksburg fields from Smith Production Inc. for $99.2 million subject to conditions and adjustments. The fields are in Starr and Hidalgo counties, Texas, 20 miles from Legend's West La Grulla Field. The properties include 83 operated wells producing 8.8 MMcfe/d net (65% gas) and about7,200 net acres. Closing is expected in late March with an effective date of Jan. 1, 2011.

Houston-based Legend Natural Gas IV was formed in 2009 to acquire develop and explore for natural gas and oil reserves in onshore U.S. basins. It is managed by Legend Natural Gas LLC, which also manages two other limited partnerships: Legend Natural Gas II LP and Legend Natural Gas III LP. Through the partnerships, Legend operates more than 400 wells in the Gulf Coast, South Texas and the Permian Basin.

Equity for the deals is being provided by the Riverstone/Carlyle Global Energy and Power Funds.

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