WPX-Legacy deal closes

Done deal: WPX, Legacy close on Piceance deal

Houston master limited partnership Legacy Reserves and US independent WPX have closed on a $355 million deal for a stake in the Piceance Basin, the companies said on Wednesday.

Under the deal announced in May Legacy will take on an "escalating working interest" in 2680 natural gas wells that starts at 29% and rises to 41% by 2016.

WPX will also get a stake in a class of new incentive distribution rights (IDRs) created by Legacy, with the possibility to increase its share if other deals are done.

"Closing this transaction represents a key first step in our exciting strategic alliance with WPX Energy," Legacy chief executive Cary Brown said.

"This acquisition, combined with the ability to complete future transactions with WPX, greatly enhances our goal of delivering long-term unitholder value."

The MLP structure has gained favour among US onshore companies as a way to unlock value in assets that have predictable revenue streams while minimising corporate tax obligations.

The move marked a shift from WPX's previously stated intention to list its own MLP for areas in the basin.

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