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<TITLE>sv8</TITLE>
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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt"><B>As filed with the
Securities and Exchange Commission on July&nbsp;13, 2007</B>
</DIV>


<DIV align="right" style="font-size: 10pt; margin-top: 3pt"><B>Registration
No.&nbsp;333-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>




<DIV align="center" style="font-size: 14pt; margin-top: 11pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>



<DIV align="center"><DIV style="font-size: 3pt; margin-top: 12pt; width: 15%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>




<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM S-8</B>
</DIV>



<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT<BR>
UNDER<BR>
THE SECURITIES ACT OF 1933</B>
</DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 12pt; width: 15%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 10pt"><B>Legacy Reserves LP</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Exact name of registrant as specified in its charter)</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B><BR>
(State or other jurisdiction <BR>
of incorporation or organization)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>16-1751069</B><BR>
(I.R.S. Employer<BR>
Identification No.)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>303 W. Wall, Suite&nbsp;1400<BR>
Midland, Texas</B><BR>
(Address of Principal Executive Offices)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>79701</B><BR>
(Zip Code)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Legacy Reserves LP Long-Term Incentive Plan</B>
</DIV>

<DIV align="center" style="font-size: 10pt">(Full title of the plan)</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Steven H. Pruett<BR>
President and Chief Financial Officer<BR>
Legacy Reserves GP, LLC<BR>
303 W. Wall, Suite&nbsp;1400<BR>
Midland, Texas 79701</B><BR>
(Name and address of agent for service)<BR>
<B>(432)&nbsp;689-5200</B><BR>
(Telephone number, including area code, of agent for service)
</DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 12pt; width: 15%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B><I>Copies to:</I></B><BR>
<B>Gislar Donnenberg<BR>
Andrews Kurth LLP<BR>
600 Travis, Suite&nbsp;4200<BR>
Houston, Texas 77002<BR>
Telephone: (713)&nbsp;220-4200</B>
</DIV>

<DIV align="center"><DIV style="font-size: 3pt; margin-top: 12pt; width: 15%; border-top: 1px solid #000000">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CALCULATION OF REGISTRATION FEE</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="50%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="9%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD><!-- VRule -->
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="22" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount of</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
     <TD width="1%">&nbsp;</TD>
    <TD nowrap align="left"><B>Title of securities</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount to be</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>offering price</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>aggregate</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>registration</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD nowrap align="left"><B>to be registered</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>registered (1)(2)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>per unit (3)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>offering price</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>fee</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Units representing limited partner interests</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">65,116</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;Units</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" style="border-top: 2px solid #000000">$</TD>

<TD align="right" style="border-top: 2px solid #000000">26.88</TD>
    <TD nowrap style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">1,750,319</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">54</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>

<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="22" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Pursuant to Rule&nbsp;416 under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;),
this registration statement also covers an indeterminate number of additional units as may be
necessary to adjust the number of units being offered or issued pursuant to the plan as a
result of unit splits, unit distributions or similar transactions.</TD>
</TR>
<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>
<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents units issued and reserved for issuance under the Legacy Reserves LP Long-Term Incentive Plan.

</TD>
</TR>
<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>
<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>The registration fee for such units was calculated in accordance with Rule 457(c) and (h)
under the Securities Act and based upon the average of the high and low sales prices of the
units as reported on The NASDAQ Global Select Market on July&nbsp;11, 2007.</TD>
</TR>

</TABLE>
<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>

<P align="center" style="font-size: 3pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="CENTER"><U><B>TABLE OF CONTENTS</B></U></DIV>

<P><CENTER>
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<TR>
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR><TD><A HREF="#012">EXPLANATORY NOTE</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR><TD><A HREF="#000">PART I<BR> INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">2<BR>2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR><TD><A HREF="#001">PART II<BR> INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top" nowrap>II-1<BR>II-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR><TD><DIV style="margin-left:15px; text-indent:-0px"><A HREF="#002">Item&nbsp;3. Incorporation of Documents by Reference</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">II-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR><TD><DIV style="margin-left:15px; text-indent:-0px"><A HREF="#003">Item&nbsp;4. Description of Securities</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">II-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR><TD><DIV style="margin-left:15px; text-indent:-0px"><A HREF="#004">Item&nbsp;5. Interests of Named Experts and Counsel</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">II-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR><TD><DIV style="margin-left:15px; text-indent:-0px"><A HREF="#005">Item&nbsp;6. Indemnification of Directors and Officers</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">II-1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR><TD><DIV style="margin-left:15px; text-indent:-0px"><A HREF="#006">Item&nbsp;7. Exemption from Registration Claimed</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">II-3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR><TD><DIV style="margin-left:15px; text-indent:-0px"><A HREF="#007">Item&nbsp;8. Exhibits</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">II-3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR><TD><DIV style="margin-left:15px; text-indent:-0px"><A HREF="#008">Item&nbsp;9. Undertakings</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">II-3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR><TD><A HREF="#009">SIGNATURES</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">II-5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR><TD><A HREF="#011">POWER OF ATTORNEY</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">II-5</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>

<TR><TD><A HREF="#010">EXHIBIT INDEX</A></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">II-7</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h47934aexv5w1.htm">Opinion of Andrews Kurth LLP</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h47934aexv23w1.htm">Consent of BDO Seidman, LLP</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="h47934aexv23w2.htm">Consent of LaRoche Petroleum Consultants, Ltd.</A></FONT></TD></TR>
</TABLE>
</CENTER>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV align="left"><A NAME="012"></A></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 18pt"><B>EXPLANATORY NOTE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
material which follows, up to but not including the page beginning
Part&nbsp;II of this Registration Statement, constitutes a
&#147;reoffer&#148; prospectus prepared in accordance with
Part&nbsp;I of Form&nbsp;S-3 to be used in connection with resales of
restricted units issued under an employee benefit plan. These units
may be considered &#147;control securities&#148; or &#147;restricted
securities&#148; as defined in General Instruction&nbsp;C(1) to
Form&nbsp;S-8.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This registration statement registers 65,116 units representing limited partner interests
(the &#147;Units&#148;) in Legacy Reserves LP (the
&#147;Partnership&#148;) issued or reserved for issuance under the Legacy Reserves LP
Long-Term Incentive Plan (the &#147;Plan&#148;) to be offered pursuant to the reoffer prospectus included
herein. This registration of 65,116 Units increases the number of Units registered
for issuance under the Plan to 1,991,250. As permitted by General Instruction E to Form S-8,
this registration statement incorporates by reference the registration statement on Form S-8, File
No.&nbsp;333-141824, which was filed by the Partnership with the Securities and Exchange Commission (the
&#147;Commission&#148;) on April&nbsp;3, 2007.
</DIV>






<!-- link1 "PART I<BR> INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS" -->
<DIV align="left"><A NAME="000"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART I<BR>
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The document(s) containing the information specified in Part&nbsp;I of Form S-8 (plan information
and registrant information) will be sent or given to employees as specified by Rule&nbsp;428(b)(1) under
the Securities Act of 1933, as amended (the &#147;Securities Act&#148;). In accordance with Rule&nbsp;428 and the
requirements of Part&nbsp;I of Form S-8, such documents are not being filed with the Commission either as part of this registration statement or as
prospectuses or prospectus supplements pursuant to Rule&nbsp;424
under the Securities Act. The Partnership shall maintain a file of such documents in accordance with the
provisions of Rule&nbsp;428(a)(2) of the Securities Act. Upon request, the Partnership shall furnish to
the Commission or its staff a copy of any or all of the documents included in the file.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->-2-<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">PROSPECTUS
</DIV>


<DIV align="center" style="font-size: 18pt; margin-top: 18pt"><B>Legacy Reserves LP</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>65,116 Units<BR>
Representing Limited Partner Interests</B><BR>
<IMG src="h47934ah4793400.gif" alt="(LEGACY LOGO)">
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling unitholders identified in this prospectus will from time to time sell the units
offered by this prospectus. Please read &#147;Selling Unitholders.&#148; The units to be sold by the
selling unitholders were acquired pursuant to the Legacy Reserves LP Long-Term Incentive Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The sales
may occur on the NASDAQ Global Select Market at prevailing market prices, in negotiated
transactions or through a combination of these methods. The selling unitholders may offer the units
at fixed prices, at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. We will not receive proceeds from any of these
sales. We are paying the expenses incurred in registering the units, but all selling and other
expenses incurred by the selling unitholders will be borne by the selling unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The units included in this prospectus are &#147;restricted securities&#148; under the Securities Act of
1933, as amended (the &#147;Securities Act&#148;), before their sale under this prospectus as such units were
not previously registered. This prospectus has been prepared for the purpose of registering the
units under the Securities Act to allow for future sales by the selling unitholders, on a
continuous or delayed basis, to the public without restriction (except that all sales hereunder
must comply with the limitation on amount of securities sold specified in Rule&nbsp;144 of the
Securities Act).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling unitholders and any broker-dealer or agents involved in the sale or resale of the
unit may be deemed to be &#147;underwriters&#148; within the meaning of the Securities Act. In addition, any
commissions, discounts or concessions paid to any such broker-dealer or agent in connection with
the sale or resale of the shares may be deemed to be underwriting commissions or discounts under
the Securities Act. Please read &#147;Plan of Distribution.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our units
are listed for quotation on the NASDAQ Global Select Market under the symbol &#147;LGCY.&#148;
On July&nbsp;12, 2007 the last reported sales price of our units, as reported on the NASDAQ Global
Select Market, was $26.78 per unit. Our principal executive offices are located at 303 W. Wall, Suite
1400, Midland, Texas 79701, and our telephone number is
(432)&nbsp;689-5200.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Investing in our units involves a high degree of risk. See &#147;Risk Factors&#148; beginning on page 1.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;These risks include the following:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>We may not have sufficient available cash to pay the full amount of our current
quarterly distribution or any distribution at all following establishment of cash reserves
and payment of fees and expenses, including payments to our general partner.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If we are not able to acquire additional oil and natural gas reserves on economically
acceptable terms, our reserves and production will decline, which would adversely affect
our business, results of operations and financial condition and our ability to make cash
distributions to our unitholders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If commodity prices decline significantly for a prolonged period, we may be forced to
reduce our distribution or not be able to pay distributions at all.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our Founding Investors, including members of our management,
own a 51% limited partner
interest in us and control our general partner, which has sole responsibility for
conducting our business and managing our operations. Our general partner has conflicts of
interest and limited fiduciary duties, which may permit it to favor its own interests to
the detriment of our unitholders.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Even if unitholders are dissatisfied they cannot remove our general partner without the
consent of unitholders owning at least
66<sup style="vertical-align: top">2</sup>/<sub style="vertical-align: bottom">3</sub>% of our units, including units owned by our
general partner and its affiliates.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our unitholders may be required to pay taxes on their share of our income even if they
do not receive any cash distributions from us.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
the Securities and Exchange Commission (the &#147;Commission&#148;) nor any state securities commission
has approved or disapproved of these securities or determined whether this prospectus is truthful
or complete. Any representation to the contrary is a criminal offense.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">The
date of this prospectus is July&nbsp;13, 2007.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TABLE OF CONTENTS</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#101">RISK FACTORS
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#102">RISKS RELATED TO OUR BUSINESS
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#103">RISKS RELATED TO OUR LIMITED PARTNERSHIP STRUCTURE
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">8</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#104">TAX RISKS TO UNITHOLDERS
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#105">CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">14</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#106">LEGACY RESERVES LP
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#107">USE OF PROCEEDS
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#108">SELLING UNITHOLDERS
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">15</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#109">PLAN OF DISTRIBUTION
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">16</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#110">LEGAL MATTERS
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#111">EXPERTS
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">18</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#112">INFORMATION INCORPORATED BY REFERENCE
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#113">WHERE YOU CAN FIND MORE INFORMATION
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">19</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#114">DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><A href="#115">EXEMPTION FROM REGISTRATION
</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">20</TD>
    <TD nowrap valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>References in this prospectus to &#147;Legacy Reserves,&#148; &#147;Legacy,&#148; the &#147;Partnership,&#148; &#147;we,&#148; &#147;our,&#148;
&#147;us,&#148; or like terms prior to March&nbsp;15, 2006 refer to the Moriah Group, Legacy
Reserves LP&#146;s predecessor, including the oil and natural gas properties we acquired in exchange for units and
cash from the Moriah Group, the Brothers Group, H2K Holdings, MBN Properties (our &#147;Founding
Investors&#148;) and certain charitable foundations in connection with our private equity offering on
March&nbsp;15, 2006. When used for periods from March&nbsp;15, 2006 forward, those terms refer to Legacy
Reserves LP and its subsidiaries.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>You should rely only on the information contained in or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on it. The selling
unitholders are offering to sell, and seeking offers to buy, units only in jurisdictions where
offers and sales of our units are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the date of delivery of this
prospectus or any sale of units. The information contained in the documents incorporated by
reference in this prospectus is accurate only as of the date of the document incorporated by
reference. Neither the delivery of this prospectus nor any sale or offer to sell the units made
hereunder shall under any circumstances create any implication that there has been no change in our
affairs since the date hereof or that the information contained herein is correct as of any time
subsequent to the date hereof.</B>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->i<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISK FACTORS</B>
</DIV>

<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>RISKS RELATED TO OUR BUSINESS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>We may not have sufficient available cash to pay the full amount of our current quarterly
distribution or any distribution at all following establishment of cash reserves and payment of
fees and expenses, including payments to our general partner.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may not have sufficient available cash each quarter to pay the full amount of our current
quarterly distribution or any distribution at all. The amount of cash we distribute in any quarter
to our unitholders may fluctuate significantly from quarter to quarter and may be significantly
less than our current quarterly distribution of $0.41 per unit. Under the terms of our partnership
agreement, the amount of cash otherwise available for distribution will be reduced by our operating
expenses and the amount of any cash reserves that our general partner establishes to provide for
future operations, future capital expenditures, future debt service requirements and future cash
distributions to our unitholders. Further, our debt agreements contain restrictions on our ability
to pay distributions. The amount of cash we can distribute on our units principally depends upon
the amount of cash we generate from our operations, which will fluctuate from quarter to quarter
based on, among other things:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the amount of oil and natural gas we produce;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the price at which we are able to sell our oil and natural gas production;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether we are able to acquire additional oil and natural gas properties at economically attractive prices;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>whether we are able to continue our exploitation activities at economically attractive costs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the level of our operating costs, including payments to our general partner;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the level of our interest expense, which depends on the amount of our indebtedness and
the interest payable thereon; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the level of our capital expenditures.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>If we are not able to acquire additional oil and natural gas reserves on economically acceptable
terms, our reserves and production will decline, which would adversely affect our business, results
of operations and financial condition and our ability to make cash distributions to our
unitholders.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we are unable to develop our proved undeveloped reserves and our wells do not produce as
expected, our reserves may decline more rapidly than we have estimated. Our future oil and natural
gas reserves and production and, therefore, our cash flow and income are highly dependent on our
success in efficiently developing and exploiting our current reserves and economically finding or
acquiring additional recoverable reserves. We may not be able to develop, find or acquire
additional reserves to replace our current and future production at acceptable costs, which would
adversely affect our business, results of operations, financial condition and our ability to make
cash distributions to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Because we distribute all of our available cash to our unitholders, our future growth may be
limited.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Since we will distribute all of our available cash as defined in our partnership agreement to
our unitholders, our growth may not be as fast as businesses that reinvest their available cash to
expand ongoing operations. We will depend on financing provided by commercial banks and other
lenders and the issuance of debt and equity securities to finance any significant growth or
acquisitions. If we are unable to obtain adequate financing from these sources, our ability to grow
will be limited.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>If commodity prices decline significantly for a prolonged period, we may be forced to reduce our
distribution or not be able to pay distributions at all.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A significant decline in oil and natural gas prices over a prolonged period would have a
significant impact on the value of our reserves and on our cash flow, which would force us to
reduce or suspend our distribution. Prices for oil and natural gas may fluctuate widely in response
to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty
and a variety of additional factors that are beyond our control, such as:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>domestic and foreign supply of and demand for oil and natural gas;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the price and quantity of imports of crude oil and natural gas;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>overall domestic and global economic conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>political and economic conditions in other oil and natural gas producing countries,
including embargoes and continued hostilities in the Middle East and other sustained
military campaigns, and acts of terrorism or sabotage;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the ability of members of the Organization of Petroleum Exporting Countries to agree to
and maintain oil price and production controls;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the level of consumer product demand;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the impact of the U.S. dollar exchange rates on oil and natural gas prices; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the price and availability of alternative fuels.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the past, the prices of oil and natural gas have been extremely volatile, and we expect
this volatility to continue. For example, during the year ended December&nbsp;31, 2006, the NYMEX
monthly oil index price ranged from a high of $77.03 per Bbl to a low of $55.81 per Bbl and the
NYMEX gas index price (near month contract) ranged from a high of $10.63 per MMbtu to a low of
$4.20 per MMBtu.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>If commodity prices decline significantly for a prolonged period, a significant portion of our
exploitation projects may become uneconomic, which may adversely affect our ability to make
distributions to our unitholders.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lower oil and natural gas prices may not only decrease our revenues, but also reduce the
amount of oil and natural gas that we can produce economically. Furthermore, substantial decreases
in oil and natural gas prices as were experienced as recently as 2002, when prices of less than
$20.00 per Bbl of oil and $2.00 per Mcf of natural gas were received at the wellhead in the Permian
Basin, would render a significant portion of our exploitation projects uneconomic. This may result
in our having to make substantial downward adjustments to our estimated proved reserves. If this
occurs, or if our estimates of development costs increase, production data factors change or
drilling results deteriorate, accounting rules may require us to write down, as a non-cash charge
to earnings, the carrying value of our oil and natural gas properties for impairments. We may incur
impairment charges in the future, which could have a material adverse effect on our results of
operations in the period taken and our ability to borrow funds under our credit facility to pay
distributions to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our estimated reserves are based on many assumptions that may prove inaccurate. Any material
inaccuracies in these reserve estimates or underlying assumptions will materially affect the
quantities and present value of our reserves.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No one can measure underground accumulations of oil and natural gas in an exact way. Oil and
natural gas reserve engineering requires subjective estimates of underground accumulations of oil
and natural gas and assumptions concerning future oil and natural gas prices, production levels,
and operating and development costs.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">As a result, estimated quantities of proved reserves and projections of future production
rates and the timing of development expenditures may prove to be inaccurate. Any material
inaccuracies in these reserve estimates or underlying assumptions will materially affect the
quantities and present value of our reserves which could adversely affect our business, results of
operations, financial condition and our ability to make cash distributions to our unitholders.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our credit facility has substantial restrictions and financial covenants, and our borrowing base is
subject to redetermination by our lenders which could adversely affect our business, results of
operations, financial condition and our ability to make cash distributions to our unitholders.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will depend on our revolving credit facility for future capital needs. Our revolving credit
facility restricts, among other things, our ability to incur debt and pay distributions, and
requires us to comply with certain financial covenants and ratios. Our ability to comply with these
restrictions and covenants in the future is uncertain and will be affected by the levels of cash
flow from our operations and events or circumstances beyond our control. Our failure to comply with
any of the restrictions and covenants under our revolving credit facility could result in a default
under our revolving credit facility. A default under our revolving credit facility could cause all
of our existing indebtedness to be immediately due and payable. Additionally, our revolving credit
facility limits the amounts we can borrow to a borrowing base amount, determined by the lenders in
their sole discretion.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are prohibited from borrowing under our revolving credit facility to pay distributions to
unitholders if the amount of borrowings outstanding under our revolving credit facility reaches or
exceeds 90% of the borrowing base, which is the amount of money available for borrowing, as
determined semi-annually by our lenders in their sole discretion. The lenders will redetermine the
borrowing base based on an engineering report with respect to our oil and natural gas reserves,
which will take into account the prevailing oil and natural gas prices at such time. Any time our
borrowings exceed 90% of the then specified borrowing base, our ability to pay distributions to our
unitholders in any such quarter is solely dependent on our ability to generate sufficient cash from
our operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Outstanding borrowings in excess of the borrowing base must be repaid, and, if mortgaged
properties represent less than 80% of total value of oil and gas properties used to determine the
borrowing base, we must pledge other oil and natural gas properties as additional collateral. We
may not have the financial resources in the future to make any mandatory principal prepayments
required under our revolving credit facility.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The occurrence of an event of default or a negative redetermination of our borrowing base
could adversely affect our business, results of operations, financial condition and our ability to
make distributions to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our business depends on gathering and transportation facilities owned by others. Any limitation in
the availability of those facilities would interfere with our ability to market the oil and natural
gas we produce.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The marketability of our oil and natural gas production depends in part on the availability,
proximity and capacity of gathering and pipeline systems owned by third parties. The amount of oil
and natural gas that can be produced and sold is subject to curtailment in certain circumstances,
such as pipeline interruptions due to scheduled and unscheduled maintenance, excessive pressure,
physical damage to the gathering or transportation system, or lack of contracted capacity on such
systems. The curtailments arising from these and similar circumstances may last from a few days to
several months. In many cases, we are provided only with limited, if any, notice as to when these
circumstances will arise and their duration. Any significant curtailment in gathering system or
pipeline capacity, or significant delay in the construction of necessary gathering and
transportation facilities, could adversely affect our business, results of operations, financial
condition and our ability to make cash distributions to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our exploitation projects require substantial capital expenditures, which will reduce our cash
available for distribution. We may be unable to obtain needed capital or financing on satisfactory
terms, which could lead to a decline in our oil and natural gas reserves.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We make and expect to continue to make substantial capital expenditures in our business for
the exploitation, development, production and acquisition of oil and natural gas reserves. These
expenditures will reduce our cash available for distribution. We intend to finance our future
capital expenditures with cash flow from operations and
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">borrowings under our revolving credit facility. Our cash flow from operations and access to
capital are subject to a number of variables, including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our proved reserves;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the level of oil and natural gas we are able to produce from existing wells;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the prices at which our oil and natural gas are sold; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to acquire, locate and produce new reserves.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If our revenues or the borrowing base under our credit facility decrease as a result of lower
oil and/or natural gas prices, operating difficulties, declines in reserves or for any other
reason, we may have limited ability to obtain the capital necessary to sustain our operations at
current levels. Our credit facility restricts our ability to obtain new financing. If additional
capital is needed, we may not be able to obtain debt or equity financing. If cash generated by
operations or available under our revolving credit facility is not sufficient to meet our capital
requirements, the failure to obtain additional financing could result in a curtailment of our
operations relating to development of our prospects, which in turn could lead to a decline in our
oil and natural gas reserves, and could adversely affect our business, results of operations,
financial condition and our ability to make cash distributions to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We do not control all of our operations and exploitation projects and failure of an operator of
wells in which we own partial interests to adequately perform could adversely affect our business,
results of operations, financial condition and our ability to make cash distributions to our
unitholders.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Much of our business activities are conducted through joint operating agreements under which
we own partial interests in oil and natural gas wells. We currently operate approximately 66% of
our production.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we do not operate wells in which we own an interest, we do not have control over normal
operating procedures, expenditures or future development of underlying properties. The success and
timing of our exploitation activities on properties operated by others is outside of our control.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The failure of an operator of wells in which we own partial interests to adequately perform
operations, or an operator&#146;s breach of the applicable agreements, could reduce our production and
revenues and could adversely affect our business, results of operations, financial condition and
our ability to make cash distributions to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Shortages of drilling rigs, equipment and crews could delay our operations, adversely affect our
ability to increase our reserves and production and reduce our cash available for distribution to
our unitholders.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Higher oil and natural gas prices generally increase the demand for drilling rigs, equipment
and crews and can lead to shortages of, and increasing costs for, drilling equipment, services and
personnel. Shortages of, or increasing costs for, experienced drilling crews and oil field
equipment and services could restrict our ability to drill the wells and conduct the operations
which we currently have planned. Any delay in the drilling of new wells or significant increase in
drilling costs could adversely affect our ability to increase our reserves and production and
reduce our revenues and cash available for distribution to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Increases in the cost of drilling rigs, service rigs, pumping services and other costs in drilling
and completing wells could reduce the viability of certain of our exploitation projects.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The rig count and the cost of rigs and oil field services necessary to implement our
exploitation projects have risen significantly with the increases in oil and natural gas prices.
Increased capital requirements for our projects will result in higher reserve replacement costs
which could reduce cash available for distribution. Higher project costs could cause certain of our
projects to become uneconomic and therefore not to be implemented, reducing our production and cash
available for distribution.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Drilling for and producing oil and natural gas are high risk activities with many uncertainties
that could adversely affect our business, results of operations, financial condition and our
ability to make cash distributions to our unitholders.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our drilling activities are subject to many risks, including the risk that we will not
discover commercially productive reservoirs. Drilling for oil and natural gas can be uneconomic,
not only from dry holes, but also from productive wells that do not produce sufficient revenues to
be commercially viable.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, our drilling and producing operations may be curtailed, delayed or canceled as a
result of other factors, including:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the high cost, shortages or delivery delays of equipment and services;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>unexpected operational events;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>adverse weather conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>facility or equipment malfunctions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>title disputes;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>pipeline ruptures or spills;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>collapses of wellbore, casing or other tubulars;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>unusual or unexpected geological formations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>of drilling fluid circulation;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>formations with abnormal pressures;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>fires;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>blowouts, craterings and explosions; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>uncontrollable flows of oil, natural gas or well fluids.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any of these events can cause substantial losses, including personal injury or loss of life,
damage to or destruction of property, natural resources and equipment, pollution, environmental
contamination, loss of wells and regulatory penalties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We ordinarily maintain insurance against various losses and liabilities arising from our
operations; however, insurance against all operational risks is not available to us. Additionally,
we may elect not to obtain insurance if we believe that the cost of available insurance is
excessive relative to the perceived risks presented. Losses could therefore occur for uninsurable
or uninsured risks or in amounts in excess of existing insurance coverage. The occurrence of an
event that is not fully covered by insurance could have a material adverse impact on our business,
results of operations, financial condition and our ability to make cash distributions to our
unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Increases in interest rates, which have recently experienced record lows, will reduce our cash
available for distribution.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The credit markets recently have experienced 50-year record lows in interest rates. If the
overall economy strengthens, it is likely that monetary policy will tighten further, resulting in
higher interest rates to counter possible inflation. Additionally, interest rates on future credit
facilities and debt offerings could be higher than current levels,
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">causing our financing costs to increase accordingly. Increased interest expense and financing
costs will reduce our cash available for distribution.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We may have assumed unknown liabilities in connection with the formation transactions and our
subsequent acquisitions.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As part of the formation transactions and subsequent acquisitions, our properties may be
subject to existing liabilities, some of which may have been unknown at the closing of such
transactions. Unknown liabilities might include liabilities for cleanup or remediation of
undisclosed or unknown environmental conditions, claims of vendors or other persons (that had not
been asserted or threatened prior to the closing of such transactions), tax liabilities and accrued
but unpaid liabilities incurred in the ordinary course of business.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Properties that we buy may not produce as projected, and we may be unable to determine reserve
potential, identify liabilities associated with the properties or obtain protection from sellers
against such liabilities.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;One of our growth strategies is to acquire additional oil and natural gas reserves. However,
our reviews of acquired properties are inherently incomplete because it generally is not feasible
to review in depth every individual property involved in each acquisition. Even a detailed review
of records and properties may not necessarily reveal existing or potential problems, nor will it
permit a buyer to become sufficiently familiar with the properties to assess fully their
deficiencies and potential. Inspections may not always be performed on every well, and
environmental problems, such as ground water contamination, are not necessarily observable even
when an inspection is undertaken. Even when problems are identified, we often assume environmental
and other risks and liabilities in connection with acquired properties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our identified drilling location inventories are scheduled out over several years, making them
susceptible to uncertainties that could materially alter the occurrence or timing of their
drilling.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our management team has specifically identified and scheduled drilling locations as an
estimation of our future multi-year drilling activities on our acreage. We have identified, as of
December&nbsp;31, 2006, 119 gross (69.1 net) proved undeveloped drilling locations. These identified
drilling locations represent a significant part of our growth strategy. Our ability to drill and
develop these locations depends on a number of factors, including the availability of capital,
seasonal conditions, regulatory approvals, oil and natural gas prices, costs and drilling results.
Our final determination on whether to drill any of these drilling locations will be dependent upon
the factors described above as well as, to some degree, the results of our drilling activities with
respect to our proved drilling locations. Because of these uncertainties, we do not know if the
numerous drilling locations we have identified will be drilled within our expected timeframe or
will ever be drilled or if we will be able to produce oil or natural gas from these or any other
potential drilling locations. As such, our actual drilling activities may be materially different
from those presently identified, which could adversely affect our business, results of operations,
financial condition and our ability to make cash distributions to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our hedging activities could result in cash losses, could reduce our cash available for
distributions and may limit potential gains.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have entered into, and we may in the future enter into, hedging arrangements for a
significant portion of our oil and natural gas production. Many derivative instruments that we
employ require us to make cash payments to the extent the applicable index exceeds a predetermined
price, thereby limiting our ability to realize the benefit of increases in oil and natural gas
prices. For example, during the year ended December&nbsp;31, 2006 our average historical unhedged sales
price for oil was $60.55 per Bbl and our average historical sales price including the effects of
realized hedge settlements was $51.65 per Bbl. For the same period, our average historical unhedged
sales price for natural gas was $6.57 per Mcf and our average historical sales price including the
effects of realized hedge settlements was $9.48 per Mcf. Net hedge settlement losses were
approximately $0.3&nbsp;million for the year ended December&nbsp;31, 2006. During the year ended December&nbsp;31,
2006, 89% of our oil and 79% of our natural gas production was hedged.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If our actual production and sales for any period are less than our hedged production and
sales for that period (including reductions in production due to operational delays) or if we are
unable to perform our drilling activities as planned, we might be forced to satisfy all or a
portion of our hedging obligations without the benefit of the cash flow from our sale of the
underlying physical commodity, resulting in a substantial diminution of our liquidity. Lastly, an
attendant risk exists in hedging activities that the counterparty in any derivative transaction
cannot or will not perform under the instrument and that we will not realize the benefit of the
hedge. Under our credit facility, we are prohibited from hedging all of our production, and we
therefore retain the risk of a price decrease on our unhedged volumes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>The inability of one or more of our customers to meet their obligations may adversely affect our
financial condition and results of operations.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Substantially all of our accounts receivable result from oil and natural gas sales or joint
interest billings to third parties in the energy industry. This concentration of customers and
joint interest owners may impact our overall credit risk in that these entities may be similarly
affected by changes in economic and other conditions. In addition, our oil and natural gas hedging
arrangements expose us to credit risk in the event of nonperformance by counterparties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We depend on a limited number of key personnel who would be difficult to replace.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our operations are dependent on the continued efforts of our executive officers, senior
management and key employees. The loss of any member of our senior management or other key
employees could negatively impact our ability to execute our strategy.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We may be unable to compete effectively with larger companies, which could have a material adverse
effect on our business, results of operations, financial condition and our ability to make cash
distributions to our unitholders.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The oil and natural gas industry is intensely competitive, and we compete with other companies
that have greater resources than us. Our ability to acquire additional properties and to discover
reserves in the future will be dependent upon our ability to evaluate and select suitable
properties and to consummate transactions in a highly competitive environment. Many of our larger
competitors not only explore for and produce oil and natural gas, but also carry on refining
operations and market petroleum and other products on a regional, national or worldwide basis.
These companies may be able to pay more for productive natural gas properties and exploratory
prospects or define, evaluate, bid for and purchase a greater number of properties and prospects
than our financial or human resources permit. In addition, these companies may have a greater
ability to continue exploration and exploitation activities during periods of low oil and natural
gas market prices and to absorb the burden of present and future federal, state, local and other
laws and regulations. Our inability to compete effectively with larger companies could have a
material adverse effect on our business, results of operations, financial condition and our ability
to make cash distributions to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>If we fail to develop or maintain an effective system of internal controls, we may not be able to
accurately report our financial results or prevent fraud. As a result, current and potential
unitholders could lose confidence in our financial reporting, which would harm our business and the
trading price of our units.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A company&#146;s internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting
principles. Because of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate. If we
cannot provide reliable financial reports or prevent fraud, our reputation and operating results
could be harmed. We cannot be certain that our efforts to develop and maintain our internal
controls will be successful, that we will be able to maintain adequate controls over our financial
processes and reporting in the future or that we will be able to comply with our obligations under
Section&nbsp;404 of the Sarbanes-Oxley Act of 2002 by our initial compliance date of December&nbsp;31, 2007.
Any failure to develop or maintain effective internal controls, or difficulties encountered in
implementing or improving our internal
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">controls, could harm our operating results or cause us to fail to meet certain reporting
obligations. Ineffective internal controls could also cause investors to lose confidence in our
reported financial information, which could have a negative effect on the trading price of our
units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We are subject to complex federal, state, local and other laws and regulations that could adversely
affect the cost, manner or feasibility of conducting our operations.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our oil and natural gas exploration and production operations are subject to complex and
stringent laws and regulations. In order to conduct our operations in compliance with these laws
and regulations, we must obtain and maintain numerous permits, approvals and certificates from
various federal, state and local governmental authorities. We may incur substantial costs in order
to maintain compliance with these existing laws and regulations. In addition, our costs of
compliance may increase if existing laws and regulations are revised or reinterpreted, or if new
laws and regulations become applicable to our operations. All such costs may have a negative effect
on our business, results of operations, financial condition and ability to make cash distributions
to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business is subject to federal, state and local laws and regulations as interpreted and
enforced by governmental authorities possessing jurisdiction over various aspects of the
exploration for and the production of, oil and natural gas. Failure to comply with such laws and
regulations, as interpreted and enforced, could have a material adverse effect on our business,
results of operations, financial condition and our ability to make cash distributions to our
unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our operations expose us to significant costs and liabilities with respect to environmental and
operational safety matters.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We may incur significant costs and liabilities as a result of environmental and safety
requirements applicable to our oil and natural gas exploration and production activities. These
costs and liabilities could arise under a wide range of federal, state and local environmental and
safety laws and regulations, including regulations and enforcement policies, which have tended to
become increasingly strict over time. Failure to comply with these laws and regulations may result
in the assessment of administrative, civil and criminal penalties, imposition of cleanup and site
restoration costs and liens, and to a lesser extent, issuance of injunctions to limit or cease
operations. In addition, claims for damages to persons or property may result from environmental
and other impacts of our operations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Strict, joint and several liability may be imposed under certain environmental laws, which
could cause us to become liable for the conduct of others or for consequences of our own actions
that were in compliance with all applicable laws at the time those actions were taken. New laws,
regulations or enforcement policies could be more stringent and impose unforeseen liabilities or
significantly increase compliance costs. If we were not able to recover the resulting costs through
insurance or increased revenues, our ability to make cash distributions to our unitholders could be
adversely affected.
</DIV>
<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>RISKS RELATED TO OUR LIMITED PARTNERSHIP STRUCTURE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Our
Founding Investors, including members of our management, own a 51% limited partner interest in
us and control our general partner, which has sole responsibility for conducting our business and
managing our operations. Our general partner has conflicts of interest and limited fiduciary
duties, which may permit it to favor its own interests to the detriment of our unitholders.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Founding Investors, including members of our management, own a 51% limited partner
interest in us and control our general partner. Although our general partner has a fiduciary duty
to manage us in a manner beneficial to us and our unitholders, the directors and officers of our
general partner have a fiduciary duty to manage our general partner in a manner beneficial to its
owners, our Founding Investors and their affiliates. Conflicts of interest may arise between our
Founding Investors and their affiliates, including our general partner, on the one hand, and us and
our unitholders, on the other hand. In resolving these conflicts of interest, our general partner
may favor its own interests and the interests of its affiliates over the interests of our
unitholders. These conflicts include, among others, the following situations:
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>neither our partnership agreement nor any other agreement requires our Founding
Investors or their affiliates, other than our executive officers, to pursue a business
strategy that favors us;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our general partner is allowed to take into account the interests of parties other than
us, such as our Founding Investors, in resolving conflicts of interest, which has the
effect of limiting its fiduciary duty to our unitholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our Founding Investors and their affiliates (other than our executive officers and their
affiliates) may engage in competition with us;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our general partner has limited its liability and reduced its fiduciary duties under our
partnership agreement and has also restricted the remedies available to our unitholders for
actions that, without the limitations, might constitute breaches of fiduciary duty. As a
result of purchasing units, unitholders consent to some actions and conflicts of interest
that might otherwise constitute a breach of fiduciary or other duties under applicable
state law;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>general partner determines the amount and timing of asset purchases and sales, capital
expenditures, borrowings, issuance of additional partnership securities, and reserves, each
of which can affect the amount of cash that is distributed to our unitholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our general partner determines the amount and timing of any capital expenditures and
whether a capital expenditure is a maintenance capital expenditure, which reduces operating
surplus, or a growth capital expenditure, which does not. Such determination can affect the
amount of cash that is distributed to our unitholders;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our general partner determines which costs incurred by it and its affiliates are
reimbursable by us;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our partnership agreement does not restrict our general partner from causing us to pay
it or its affiliates for any services rendered to us or entering into additional
contractual arrangements with any of these entities on our behalf;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our general partner intends to limit its liability regarding our contractual and other obligations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our general partner controls the enforcement of obligations owed to us by it and its affiliates; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our general partner decides whether to retain separate counsel, accountants, or others
to perform services for us.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Unitholders have limited voting rights and are not entitled to elect our general partner on an
annual or other continuing basis.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unlike the holders of common stock in a corporation, unitholders have only limited voting
rights on matters affecting our business and, therefore, limited ability to influence management
decisions regarding our business. Unitholders did not elect our general partner or its board of
directors, and while our unitholders will annually elect the board of directors of our general
partner, they will have no right to elect our general partner on an annual or other continuing
basis. As a result of these limitations, the price at which the units will trade could be
diminished because of the absence or reduction of a takeover premium in the trading price.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Even if unitholders are dissatisfied they cannot remove our general partner without the consent of
unitholders owning at least
66<FONT style="font-size: 70%"><SUP>2</SUP></FONT>/<FONT style="font-size: 60%">3</FONT>% of our units, including units owned by our general partner and its
affiliates.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Currently, the unitholders are unable to remove our general partner without its consent
because our general partner&#146;s affiliates own sufficient units to be able to prevent our general
partner&#146;s removal. The vote of the holders of at least
66<FONT style="font-size: 70%"><SUP>2</SUP></FONT>/<FONT style="font-size: 60%">3</FONT>% of all outstanding units voting
together as a single class is required to remove the general partner. Affiliates of our general
partner, including members of our management, own 51% of our units.
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our partnership agreement restricts the voting rights of those unitholders owning 20% or more of
our units.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unitholders&#146; voting rights are further restricted by the partnership agreement provision
providing that any units held by a person that owns 20% or more of any class of units then
outstanding, other than our general partner, its affiliates, their transferees, and persons who
acquired such units with the prior approval of the board of directors of our general partner,
cannot vote on any matter. Our partnership agreement also contains provisions limiting the ability
of unitholders to call meetings or to acquire information about our operations, as well as other
provisions limiting the unitholders&#146; ability to influence the manner or direction of management.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our Founding Investors and their affiliates (other than our executive officers and their
affiliates) may compete directly with us.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Founding Investors and their affiliates, other than our general partner and our executive
officers and their affiliates, are not prohibited from owning assets or engaging in businesses that
compete directly or indirectly with us. In addition, our Founding Investors or their affiliates,
other than our general partner and our executive officers and their affiliates, may acquire,
develop and operate oil and natural gas properties or other assets in the future, without any
obligation to offer us the opportunity to acquire, develop or operate those assets.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Cost reimbursements due our general partner and its affiliates will reduce our cash available for
distribution to our unitholders.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prior to making any distribution on our outstanding units, we will reimburse our general
partner and its affiliates for all expenses they incur on our behalf. Any such reimbursement will
be determined by our general partner in its sole discretion. These expenses will include all costs
incurred by our general partner and its affiliates in managing and operating us. The reimbursement
of expenses of our general partner and its affiliates could adversely affect our ability to pay
cash distributions to our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our partnership agreement limits our general partner&#146;s fiduciary duties to our unitholders and
restricts the remedies available to unitholders for actions taken by our general partner that might
otherwise constitute breaches of fiduciary duty.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our partnership agreement contains provisions that reduce the standards to which our general
partner would otherwise be held by state fiduciary duty law. For example, our partnership
agreement:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>permits our general partner to make a number of decisions in its individual capacity, as
opposed to in its capacity as our general partner. This entitles our general partner to
consider only the interests and factors that it desires, and it has no duty or obligation
to give any consideration to any interest of, or factors affecting, us, our affiliates or
any unitholder;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provides that our general partner will not have any liability to us or our unitholders
for decisions made in its capacity as a general partner so long as it acted in good faith,
meaning it believed the decision was in the best interests of our partnership;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provides that our general partner is entitled to make other decisions in &#147;good faith&#148; if
it believes that the decision is in our best interest;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provides generally that affiliated transactions and resolutions of conflicts of interest
not approved by the conflicts committee of the board of directors of our general partner
and not involving a vote of unitholders must be on terms no less favorable to us than those
generally being provided to or available from unrelated third parties or be &#147;fair and
reasonable&#148; to us, as determined by our general partner in good faith, and that, in
determining whether a transaction or resolution is &#147;fair and reasonable,&#148; our general
partner may consider the totality of the relationships between the parties involved,
including other transactions that may be particularly advantageous or beneficial to us; and</TD>
</TR>

</TABLE>
</DIV>
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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>provides that our general partner and its officers and directors will not be liable for
monetary damages to us, our unitholders or assignees for any acts or omissions unless there
has been a final and non-appealable judgment entered by a court of competent jurisdiction
determining that the general partner or those other persons acted in bad faith or engaged
in fraud or willful misconduct.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our partnership agreement permits our general partner to redeem any partnership interests held by a
limited partner who is a non-citizen assignee.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we are or become subject to federal, state or local laws or regulations that, in the
reasonable determination of our general partner, create a substantial risk of cancellation or
forfeiture of any property that we have an interest in because of the nationality, citizenship or
other related status of any limited partner, our general partner may redeem the units held by the
limited partner at their current market price. In order to avoid any cancellation or forfeiture,
our general partner may require each limited partner to furnish information about his nationality,
citizenship or related status. If a limited partner fails to furnish information about his
nationality, citizenship or other related status within 30&nbsp;days after a request for the information
or our general partner determines after receipt of the information that the limited partner is not
an eligible citizen, our general partner may elect to treat the limited partner as a non-citizen
assignee. A non-citizen assignee is entitled to an interest equivalent to that of a limited partner
for the right to share in allocations and distributions from us, including liquidating
distributions. A non-citizen assignee does not have the right to direct the voting of his units and
may not receive distributions in kind upon our liquidation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We may issue an unlimited number of additional units without the approval of our unitholders, which
would dilute their existing ownership interest in us.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our general partner, without the approval of our unitholders, may cause us to issue an
unlimited number of additional units. The issuance by us of additional units or other equity
securities of equal or senior rank will have the following effects:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our unitholders&#146; proportionate ownership interests in us will decrease;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the amount of cash available for distribution on each unit may decrease;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the risk that a shortfall in the payment of our current quarterly distribution will increase;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the relative voting strength of each previously outstanding unit may be diminished; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the market price of the units may decline.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>The liability of our unitholders may not be limited if a court finds that unitholder action
constitutes control of our business.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A general partner of a partnership generally has unlimited liability for the obligations of
the partnership, except for those contractual obligations of the partnership that are expressly
made without recourse to the general partner. Our partnership is organized under Delaware law, and
we conduct business in a number of other states. The limitations on the liability of holders of
limited partner interests for the obligations of a limited partnership have not been clearly
established in some of the other states in which we do business. In some states, including
Delaware, a limited partner is only liable if he participates in the &#147;control&#148; of the business of
the partnership. These statutes generally do not define control, but do permit limited partners to
engage in certain activities, including, among other actions, taking any action with respect to the
dissolution of the partnership, the sale, exchange, lease or mortgage of any asset of the
partnership, the admission or removal of the general partner and the amendment of the partnership
agreement. Our unitholders could, however, be liable for any and all of our obligations as if our
unitholders were a general partner if:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>a court or government agency determined that we were conducting business in a state but
had not complied with that particular state&#146;s partnership statute; or</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->11<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our unitholders&#146; right to act with other unitholders to take other actions under our
partnership agreement that constitute &#147;control&#148; of our business.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Unitholders may have liability to repay distributions that were wrongfully distributed to them.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under certain circumstances, unitholders may have to repay amounts wrongfully returned or
distributed to them. Under Section&nbsp;17-607 of the Delaware Revised Uniform Limited Partnership Act,
we may not make a distribution to our unitholders if the distribution would cause our liabilities
to exceed the fair value of our assets. Delaware law provides that for a period of three years from
the date of the distribution, limited partners who received an impermissible distribution and who
knew at the time of the distribution that it violated Delaware law will be liable to the limited
partnership for the distribution amount. Substituted limited partners are liable for the
obligations of the transferring limited partner to make contributions to the partnership that are
known to such substitute limited partner at the time it became a limited partner and for unknown
obligations if the liabilities could be determined from the partnership agreement. Liabilities to
partners on account of their partnership interest and liabilities that are non-recourse to the
partnership are not counted for purposes of determining whether a distribution is permitted.
</DIV>
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>TAX RISKS TO UNITHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our tax treatment depends on our status as a partnership for federal income tax purposes, as well
as our not being subject to entity-level taxation by individual states. If the IRS were to treat us
as a corporation for federal income tax purposes or we were to become subject to entity-level
taxation for state tax purposes, taxes paid, if any, will reduce our cash available for
distribution to our unitholders.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The anticipated after-tax benefit of an investment in our units depends largely on our being
treated as a partnership for federal income tax purposes. We have not requested, and do not plan to
request, a ruling from the IRS on this or any other tax matter that affects us.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If we were treated as a corporation for federal income tax purposes, we would pay federal
income tax on our taxable income at the corporate tax rates, currently at a maximum rate of 35%,
and would likely pay state income tax at varying rates. Distributions to our unitholders would
generally be taxed as corporate distributions, and no income, gain, loss, deduction or credit would
flow through to our unitholders. Because a tax may be imposed on us as a corporation, our cash
available for distribution to our unitholders could be reduced. Thus, any treatment of us as a
corporation could result in a material reduction in the anticipated cash flow and after-tax return
to our unitholders and, therefore, result in a substantial reduction in the value of our units.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Current law or our business may change so as to cause us to be treated as a corporation for
federal income tax purposes or otherwise subject us to entity-level taxation. In addition, because
of widespread state budget deficits, several states are evaluating ways to subject partnerships to
entity-level taxation through the imposition of state income, franchise or other forms of taxation.
For example, we will be subject to a new entity-level state tax on the portion of our income that
is generated in Texas beginning for tax reports due on or after January&nbsp;1, 2008. Specifically, the
Texas margin tax will be imposed at a maximum effective rate of 0.7% of our gross income that is
apportioned to Texas. If any additional states were to impose a tax upon us as an entity, the cash
available for distribution to our unitholders would be reduced.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our unitholders may be required to pay taxes on their share of our income even if they do not
receive any cash distributions from us.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our unitholders are required to pay federal income taxes and, in some cases, state and local
income taxes on their share of our taxable income, whether or not they receive cash distributions
from us. Our unitholders may not receive cash distributions from us equal to their share of our
taxable income or even equal to the actual tax liability that results from their share of our
taxable income.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->12<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>A successful IRS contest of the federal income tax positions we take may adversely affect the
market for our units, and the costs of any contest will reduce our cash available for distribution
to our unitholders.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have not requested a ruling from the IRS with respect to our treatment as a partnership for
federal income tax purposes or any other matter that affects us. The IRS may adopt positions that
differ from the positions we take. It may be necessary to resort to administrative or court
proceedings to sustain some or all of the positions we take and a court may disagree with some or
all of those positions. Any contest with the IRS may materially and adversely impact the market for
our units and the price at which they trade. In addition, our costs of any contest with the IRS
will result in a reduction in cash available for distribution to our unitholders and thus will be
borne indirectly by our unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Tax-exempt entities and foreign persons face unique tax issues from owning units that may result in
adverse tax consequences to them.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investment in units by tax-exempt entities, including employee benefit plans and individual
retirement accounts (known as IRAs) and non-U.S. persons raises issues unique to them. For example,
virtually all of our income allocated to organizations exempt from federal income tax, including
individual retirement accounts and other retirement plans, will be unrelated business taxable
income and will be taxable to such a unitholder. Distributions to non-U.S. persons will be reduced
by withholding taxes imposed at the highest effective applicable tax rate, and non-U.S. persons
will be required to file United States federal income tax returns and pay tax on their share of our
taxable income.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Tax gain or loss on the disposition of our units could be more or less than expected because prior
distributions in excess of allocations of income will decrease our unitholders tax basis in their
units.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If our unitholders sell any of their units, they will recognize gain or loss equal to the
difference between the amount realized and their tax basis in those units. Prior distributions to
our unitholders in excess of the total net taxable income they were allocated for a unit, which
decreased their tax basis in that unit, will, in effect, become taxable income to our unitholders
if the unit is sold at a price greater than their tax basis in that unit, even if the price our
unitholders receive is less than their original cost. A substantial portion of the amount realized,
whether or not representing gain, may be ordinary income to our unitholders. In addition, if our
unitholders sell units, our unitholders may incur a tax liability in excess of the amount of cash
our unitholders receive from the sale.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We will treat each purchaser of our units as having the same tax benefits without regard to the
units purchased. The IRS may challenge this treatment, which could adversely affect the value of
the units.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Because we cannot match transferors and transferees of units, we will adopt depreciation and
amortization positions that may not conform with all aspects of existing Treasury regulations. A
successful IRS challenge to those positions could adversely affect the amount of tax benefits
available to our unitholders. It also could affect the timing of these tax benefits or the amount
of gain on the sale of units and could have a negative impact on the value of our units or result
in audits of and adjustments to our unitholders&#146; tax returns.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our unitholders may be subject to state and local taxes and return filing requirements in states
where they do not live as a result of investing in our units.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to federal income taxes, our unitholders will likely be subject to other taxes,
including state and local taxes, unincorporated business taxes and estate, inheritance or
intangible taxes that are imposed by the various jurisdictions in which we do business or own
property now or in the future, even if they do not reside in any of those jurisdictions. Our
unitholders will likely be required to file foreign, state and local income tax returns and pay
state and local income taxes in some or all of these jurisdictions. Further, our unitholders may be
subject to penalties for failure to comply with those requirements. We currently do business and
own assets in Texas, New Mexico, Oklahoma and Mississippi. As we make acquisitions or expand our
business, we may do business or own assets in other states in the future. It is the responsibility
of each unitholder to file all United States federal, foreign, state and local tax returns that may
be required of such unitholder. Our counsel has not rendered an opinion on the state or local tax
consequences of an investment in the units.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->13<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We will be considered to have terminated for tax purposes due to a sale or exchange of 50% or more
of our interests within a twelve-month period.</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will be considered to have terminated for tax purposes if there is a sale or exchange of
50% or more of the total interests in our capital and profits within a twelve-month period. A
constructive termination results in the closing of our taxable year for all unitholders and in the
case of a unitholder reporting on a taxable year other than a fiscal year ending December&nbsp;31, may
result in more than twelve months of our taxable income or loss being includable in his taxable
income for the year of termination. A constructive termination occurring on a date other than
December&nbsp;31 will result in us filing two tax returns (and unitholders receiving two Schedule&nbsp;K-1s)
for one fiscal year and the cost of the preparation of these returns will be borne by all
unitholders.
</DIV>
<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CAUTIONARY STATEMENT<BR>
REGARDING FORWARD-LOOKING INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This document contains forward-looking statements that are subject to a number of risks and
uncertainties, many of which are beyond our control, which may include statements about our:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>business strategy;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>financial strategy;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>drilling locations;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>oil and natural gas reserves;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>technology;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>realized oil and natural gas prices;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>production volumes;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>lease operating expenses, general and administrative costs and finding and development costs;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>future operating results; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>plans, objectives, expectations and intentions.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of these types of statements, other than statements of historical fact included in this
document, are forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as &#147;may,&#148; &#147;could,&#148; &#147;should,&#148; &#147;expect,&#148; &#147;plan,&#148; &#147;project,&#148; &#147;intend,&#148;
&#147;anticipate,&#148; &#147;believe,&#148; &#147;estimate,&#148; &#147;predict,&#148; &#147;potential,&#148; &#147;pursue,&#148; &#147;target,&#148; &#147;continue,&#148; the
negative of such terms or other comparable terminology.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The forward-looking statements contained in this document are largely based on our
expectations, which reflect estimates and assumptions made by our management. These estimates and
assumptions reflect our best judgment based on currently known market conditions and other factors.
Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain
and involve a number of risks and uncertainties that are beyond our control. In addition,
management&#146;s assumptions about future events may prove to be inaccurate. All readers are cautioned
that the forward-looking statements contained in this document are not guarantees of future
performance, and we cannot assure any reader that such statements will be realized or the
forward-looking events and circumstances will occur. Actual results may differ materially from
those anticipated or implied in the forward-looking statements due to factors described in under
&#147;Risk Factors&#148;. The forward-looking statements in this document speak only as of the date of this
document; we disclaim any obligation to update these statements unless required by securities law,
and we caution you not to rely on them unduly. These cautionary statements qualify all
forward-looking statements attributable to us or persons acting on our behalf.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGACY RESERVES LP</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are an independent oil and natural gas limited partnership headquartered in Midland, Texas,
and are focused on the acquisition and exploitation of oil and natural gas properties primarily
located in the Permian Basin of West Texas and southeast New Mexico. We were formed in October&nbsp;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&nbsp;15, 2006. On January&nbsp;18, 2007, we completed an initial public offering of 6,900,000 units
representing limited partner interests at an initial public offering price of $19.00 per unit. Net
proceeds to the partnership after underwriting discounts and estimated offering expenses were
approximately $120&nbsp;million, all of which were used to repay all indebtedness outstanding under the
partnership&#146;s credit facility and for general partnership purposes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our primary business objective is to generate stable cash flows allowing us to make cash
distributions to our unitholders and to increase quarterly cash distributions per unit over time
through a combination of acquisitions of new and exploitation of our existing oil and natural gas
properties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have grown primarily through two activities: the acquisition of producing oil and natural
gas properties and the exploitation of proved properties as opposed to higher risk exploration of
unproved properties.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our oil and natural gas production and reserve data as of December&nbsp;31, 2006 are as follows:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>we had proved reserves of approximately 18.8 MMBoe, of which 71% were oil and 79% were
classified as proved developed producing, 5% were proved developed non-producing, and 16%
were proved undeveloped;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our proved reserves had a standardized measure of $240.6&nbsp;million; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our proved reserves to production ratio was approximately 14&nbsp;years based on the average
daily net production of 3,625 Boe/d for the three months ended December&nbsp;31, 2006.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our reserves are located primarily in the Permian Basin, one of the largest and most prolific
oil and natural gas producing basins in the United States. The Permian Basin extends over 100,000
square miles in West Texas and southeast New Mexico and has produced over 24&nbsp;billion Bbls of oil
since its discovery in 1921. The Permian Basin is characterized by oil and natural gas fields with
long production histories and multiple producing formations. Our producing properties in the
Permian Basin are mature fields with established decline curves.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal executive offices are located at 303 W. Wall, Suite&nbsp;1400, Midland, Texas 79701,
and our telephone number is (432)&nbsp;689&#8209;5200. Information on our website or any other website is not
incorporated into this prospectus by reference and does not constitute a part of this prospectus.
</DIV>
<DIV align="left">
<A name="107"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>USE OF PROCEEDS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The units offered by this prospectus are being registered for the account of the selling
unitholders identified in this prospectus under the caption &#147;Selling Unitholders.&#148; We will not
receive any proceeds from the sale of the units by the selling unitholders.
</DIV>
<DIV align="left">
<A name="108"></A>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SELLING UNITHOLDERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus relates to offers and sales by the selling unitholders of units acquired under
the Legacy Reserves LP Long-Term Incentive Plan. As noted in the table below, one of the selling
unitholders is our Executive Vice President, Chief Accounting Officer and Controller.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As the selling unitholders may sell all or some part of the units that they hold under this
prospectus and this offering is not being underwritten on a firm commitment basis, we are unable to
estimate the amount of units that will be held by the selling unitholders upon termination of this
offering. Our units offered by this prospectus may be offered from time to time, in whole or in part, by the persons named below or by their
transferees, as to whom applicable information will, to the extent required, be set forth in a
prospectus supplement. There can be no assurance that the selling unitholders will offer or sell
any of their units registered in this offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth information as of July&nbsp;12, 2007 regarding the
beneficial ownership of our units by the selling unitholders prior to this offering, the units to
be offered by the selling unitholders in this offering and the beneficial ownership of our units by
the selling unitholders after this offering. As of July&nbsp;12,
2007, there were 26,066,596 units outstanding.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except under applicable community property laws or as otherwise indicated in the footnotes to
the table below, the persons named in the table have sole voting and investment power with respect
to all units beneficially owned. The address of the selling unitholders is c/o Legacy Reserves LP,
303 W. Wall, Suite&nbsp;1400, Midland, Texas 79701.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="10%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="5"><B>Units Beneficially Owned</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="5"><B>Units Beneficially Owned</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="5" style="border-bottom: 1px solid #000000"><B>Prior to the Offering(a)</B></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="5" style="border-bottom: 1px solid #000000"><B>After the Offering (a)(b)</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Selling</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Percent of Units</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Units</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Percent of Units</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Unitholder</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>of Units</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Outstanding</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>to be Offered</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>of Units</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Outstanding</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">William M. Morris
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">35,077</TD>
    <TD nowrap valign="top">(c)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">*
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">35,077</TD>
    <TD nowrap valign="top">(c)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Michael Hargesheimer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17,539</TD>
    <TD nowrap valign="top">(d)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">*
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">17,539</TD>
    <TD nowrap valign="top">(d)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">0</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">*</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">David Hartman
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">25,860</TD>
    <TD nowrap valign="top">(e)(f)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">*
</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">12,500</TD>
    <TD nowrap valign="top">(f)</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">13,360</TD>
    <TD nowrap valign="top">(e)</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">*</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Percentage of units beneficially owned is less than 1%.</TD>
</TR>

</TABLE>



<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amounts and percentages of units beneficially owned are reported on the basis of
regulations of the Commission governing the determination of beneficial ownership of securities.
Under the rules of the Commission, a person is deemed to be a &#147;beneficial owner&#148; of a security if
that person has or shares &#147;voting power,&#148; which includes the power to vote or to direct the
voting of such security, or &#147;investment power,&#148; which includes the power to dispose of or to
direct the disposition of such security. A person is also deemed to be a beneficial owner of
any securities of which that person has a right to acquire beneficial ownership within 60
days, including through the exercise of options or warrants. Under these rules, more than one
person may be deemed a beneficial owner of the same securities and a person may be deemed a
beneficial owner of securities as to which he has no economic interest.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Assumes that all units that may be offered are sold.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes 35,077 restricted units Mr.&nbsp;Morris was granted on March&nbsp;15, 2006, 23,385 of which
remain subject to vesting.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes 17,539 restricted units Mr.&nbsp;Hargesheimer was
granted on March&nbsp;15, 2006, 11,693 of
which remain subject to vesting.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(e)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes 13,360 units that may be acquired upon the exercise of vested options.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(f)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Includes 12,500 restricted units Mr.&nbsp;Hartman was granted on May&nbsp;5, 2006, 10,000 of which
remain subject to vesting.</TD>
</TR>

</TABLE>
</DIV>
<DIV align="left">
<A name="109"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PLAN OF DISTRIBUTION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are registering the units covered by this prospectus for the selling unitholders listed in
the table set forth under the caption &#147;Selling Unitholders.&#148; As used in this prospectus, the term
&#147;selling unitholders&#148; includes the selling unitholders named in the table above and any of their
permitted donees, pledges, transferees, successors-in-interest or others who may later hold such
selling unitholder&#146;s interests in the units covered by this prospectus and are entitled to resell
the units using this prospectus. We have registered the selling unitholders&#146; units for resale to
provide the selling unitholders with freely tradeable units. However, resales pursuant to this
prospectus must still comply with the limitation on amount of securities sold specified in Rule&nbsp;144
of the Securities Act. Registration of the selling unitholders&#146; units does not necessarily mean
that the selling stockholders will offer or sell any of their units. We will not receive any
proceeds from the offering or sale of the selling unitholders&#146; units.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->16<!-- /Folio -->
</DIV>

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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling unitholders may sell the units being offered by this prospectus in one or more of
the following ways at various times, which may include block transactions or crosses:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>underwriters for resale to the public or to institutional investors;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>directly to the public or institutional investors; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>through brokers, dealers or agents to the public or to institutional investors.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling
unitholders will act independently of us in making decisions with respect to the
timing, manner and size of each sale. We have advised the selling unitholders that the
anti-manipulative rules of Regulation&nbsp;M under the Securities Exchange Act of 1934, as amended, may
apply to sales in the market and have informed them of the possible need for delivery of copies of
this prospectus. The selling unitholders may sell the units on The NASDAQ Global Select Market or any
other exchange or automated quotation system on which our units may be listed in the future, in
negotiated transactions or through a combination of these methods. Those sales may be made at fixed
prices, at market prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. If underwriters are used in the sale, the units will be
acquired by the underwriters for their own account and may be resold at various times in one or
more transactions, including negotiated transactions, at a fixed public offering price or prices,
which may be changed, at market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. We are paying the expenses incurred in
registering the units, but all selling and other expenses incurred by the selling unitholders will
be borne by the selling unitholders. A distribution of the units by the selling unitholders may
also be effected through the issuance by the selling unitholders or others of derivative
securities, including warrants, exchangeable securities, forward delivery contracts and the writing
of put or call options, or a combination of any of those derivative securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the selling unitholders may sell some or all of the units covered by this
prospectus through:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>block trades in which a broker-dealer will attempt to sell as agent, but may position or
resell a portion of the block, as principal, in order to facilitate the transaction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ordinary brokerage transactions and transactions in which a broker solicits purchasers; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>privately negotiated transactions.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;When selling the units, the selling unitholders may enter into hedging transactions with
broker-dealers or other financial institutions. For example, the selling unitholders may:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>enter into transactions involving short sales of the units by broker-dealers or other financial institutions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sell units short themselves and redeliver such units to close out their short positions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>enter into options or other types of transactions that require the selling unitholders
to deliver units to a broker-dealer or other financial institution, who will then resell or
transfer the units under this prospectus (as supplemented or amended to reflect the
transaction); or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>loan or pledge the units to a broker-dealer or other financial institution, who may sell
the loaned units or, in the event of default, sell the pledged units.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Broker-dealers engaged in connection with the sale of units covered by this prospectus may
receive compensation in the form of discounts, concessions or commissions from the selling
unitholders or purchasers of the units for whom those broker-dealers may act as agents or to whom
they sell as principal, or both. The compensation of a particular broker-dealer may be less than or
in excess of customary commissions. Broker-dealers engaged by the selling unitholders may allow
other broker-dealers to participate in resales. The selling unitholders and any
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">broker-dealers or agents involved in the sale or resale of the units may be deemed to be
&#147;underwriters&#148; within the meaning of the<BR> Section&nbsp;2(a)(11) of the Securities Act. In addition, the
commissions, discounts or concessions paid to any such broker-dealers or agents in connection with
the sale or resale of the units may be deemed to be underwriting commissions or discounts under the
Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to selling units under this prospectus, the selling unitholders may:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>transfer units in other ways not involving market makers or established trading markets,
including directly by gift, distribution, or other transfer;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sell units pursuant to Rule&nbsp;144 under the Securities Act rather than under this
prospectus, if the transaction meets the requirements of Rule&nbsp;144; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>sell units by any other legally available means.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are not aware of any agreements, arrangements or understandings between the selling
unitholders and any brokers, dealers, agents or underwriters regarding the sale of units by the
selling unitholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Upon our being notified by the selling unitholders that any material arrangement has been
entered into with an underwriter, broker-dealer or agent for the sale of units through a block
trade, special offering, exchange distribution or secondary distribution, we will file a supplement
to this prospectus, if one is required, under Rule 424(b) under the Securities Act. That
supplement, if required, will disclose to the extent applicable:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the name of the selling unitholders and of any participating underwriter, broker-dealer or agent;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the number of units involved;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the price at which those units were sold;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the commissions paid or discounts or concessions allowed; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>other facts material to the transaction.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, if required by the Securities Act, we will file a supplement to this prospectus
upon being notified by the selling unitholders that any successor-in-interest that is entitled to
sell units using this prospectus intends to sell more than 500 units.
</DIV>
<DIV align="left">
<A name="110"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LEGAL MATTERS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Andrews
Kurth LLP, Houston, Texas will pass upon the validity of the units offered by this prospectus.
</DIV>
<DIV align="left">
<A name="111"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPERTS</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
financial statements of Legacy Reserves LP, TSF
Properties, Ameristate Properties and Binger Properties,
incorporated by reference in this Prospectus have been audited by BDO
Seidman, LLP, an independent registered public accounting firm,
to the extent and for the periods set forth in their reports incorporated herein by reference, and
are incorporated herein in reliance upon such reports given upon the authority of said firm as experts in
auditing and accounting.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Information included in this prospectus regarding our estimated quantities of oil and natural
gas reserves was prepared by LaRoche Petroleum Consultants, Ltd., independent petroleum engineers,
geologists and geophysicists, as stated in their reserve report with respect thereto and is
included in reliance upon the authority of said firm as experts with respect to the matters covered
by their report and the giving of their report.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left">
<A name="112"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>INFORMATION INCORPORATED BY REFERENCE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following documents and information previously filed by us with the Commission are incorporated
by reference in this prospectus:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;The Partnership&#146;s annual report on Form 10-K for the year ended December&nbsp;31, 2006, as
filed with the Commission on March&nbsp;29, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;The Partnership&#146;s quarterly report on Form 10-Q for the three months ended March&nbsp;31, 2007,
as filed with the Commission on May&nbsp;14, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;The current reports on Form 8-K as filed by the Partnership with the Commission (File No.
001-33249) on January&nbsp;18, 2007 (except for Item&nbsp;7.01 thereof and the related exhibit), March&nbsp;20,
2007, March&nbsp;21, 2007 (except for Item&nbsp;7.01 thereof and the related exhibit), March&nbsp;28, 2007, April
3, 2007, April&nbsp;19, 2007, May&nbsp;4, 2007, May&nbsp;8, 2007
(containing Item&nbsp;1.01), May&nbsp;22, 2007, June&nbsp;4, 2007,
June&nbsp;5, 2007 (containing Item&nbsp;2.01), June&nbsp;18, 2007,
and June&nbsp;29, 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)&nbsp;The
current reports on Form&nbsp;8-K/A as filed by the Partnership with the Commission (File No.
001-33249) on June&nbsp;29, 2007.</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)&nbsp;The
description of the Partnership&#146;s units, as set forth in the Partnership&#146;s Registration
Statement on Form 8-A, as filed with the Commission on January&nbsp;10, 2007, and any amendment or report
subsequently filed for the purpose of updating such description.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents filed with the Commission by the Partnership pursuant to Sections&nbsp;13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;) (excluding any
information furnished pursuant to Item&nbsp;2.02 and Item&nbsp;7.01 on any current report on Form 8-K),
subsequent to the date of this prospectus and prior to the termination of the offering relating to
this prospectus shall be deemed to be incorporated by reference in this prospectus and to be a part
of this prospectus from the date such documents are filed. Any statement contained in this
prospectus or in a document incorporated or deemed to be incorporated in this prospectus by
reference shall be deemed to be modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus or in any subsequently filed document which
also is, or is deemed to be, incorporated by reference in this prospectus modifies or supersedes
such statement. Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Documents incorporated by reference in this prospectus are available from us without charge,
excluding any exhibits to those documents, unless the exhibit is specifically incorporated by
reference in those documents. You may request a copy of documents incorporated by reference in this
prospectus by contacting us in writing or by telephone at our principal executive offices:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Legacy Reserves LP<BR>
Attention: Investor Relations<BR>
303 W. Wall, Suite&nbsp;1400<BR>
Midland, Texas 79701<BR>
Telephone: (432)&nbsp;689-5200
</DIV>

<DIV align="left">
<A name="113"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>WHERE YOU CAN FIND MORE INFORMATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the Commission a registration statement on Form S-8, of which this prospectus is a
part, under the Securities Act with respect to the units offered by this prospectus. The prospectus
does not contain all of the information included in the registration statement or in the exhibits
to the registration statement. Statements contained in this prospectus concerning the provisions of
any document are not necessarily complete. You should refer to the copies of these documents filed
as exhibits to the registration statement or otherwise filed by us with the Commission for a more complete
understanding of the matter involved. Each statement concerning these documents is qualified in its
entirety by that reference.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We are also subject to the informational requirements of the Exchange Act of 1934. In
accordance with the Exchange Act, we file periodic reports, proxy and information statements and
other information with the Commission. The registration statement on Form S-8, of which this prospectus is
a part, including the attached exhibits and schedules
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">thereto, and any other information that we may file with the Commission may be inspected and copied
at the public reference room maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549.
Copies of the material may also be obtained from the Commission at prescribed rates by writing to the
public reference room maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain information on the operation of the public reference room by calling the Commission at
1-800-SEC-0330. The Commission maintains a web site on the Internet at http://www.sec.gov. that contains
reports, proxy and information statements and other information regarding issuers that file
electronically with the Commission. Our registration statement, of which this prospectus constitutes a
part, can be downloaded from the Commission&#146;s website.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We intend to furnish our unitholders annual reports containing our audited financial
statements and furnish or make available quarterly reports containing our unaudited interim
financial information for the first three fiscal quarters of each of our fiscal years.
</DIV>
<DIV align="left">
<A name="114"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>DISCLOSURE OF COMMISSION POSITION ON<BR>
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will generally indemnify officers, directors and affiliates of our general partner to the
fullest extent permitted by the law against all losses, claims, damages or similar events as set out more fully by Section
7.7 and Section 7.8 of our Amended and Restated Agreement of Limited Partnership, which is
incorporated herein by reference. Subject to any terms, conditions or restrictions set forth
in the partnership agreement, Section&nbsp;17-108 of the Delaware Revised Uniform Limited Partnership
Act empowers a Delaware limited partnership to indemnify and hold harmless any partner or other
persons from and against all claims and demands whatsoever.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have obtained directors&#146; and officers&#146; insurance to cover the directors and officers of our
general partner and some of our employees for certain liabilities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;To the extent that the indemnification provisions of our partnership agreement purport to
include indemnification for liabilities arising under the Securities Act, in the opinion of the
Commission, such indemnification is contrary to public policy and is therefore unenforceable.
</DIV>
<DIV align="left">
<A name="115"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXEMPTION FROM REGISTRATION</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Units that may be reoffered or resold by the selling unitholders pursuant to this
prospectus were issued to the selling unitholders pursuant to the Legacy Reserves LP Long-Term
Incentive Plan and such issuances were exempt from the registration requirements of the Securities
Act pursuant to Rule&nbsp;701.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<!-- link1 "PART II<BR> INFORMATION REQUIRED IN THE REGISTRATION STATEMENT" -->
<DIV align="left"><A NAME="001"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>PART II<BR>
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>
</DIV>

<!-- link2 "Item&nbsp;3. Incorporation of Documents by Reference" -->
<DIV align="left"><A NAME="002"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Incorporation of Documents by Reference</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Partnership incorporates by reference in this registration statement the following
documents filed with the Commission:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(1)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Partnership&#146;s annual report on Form 10-K for the year ended December&nbsp;31,
2006, as filed with the Commission on March&nbsp;29, 2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(2)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Partnership&#146;s quarterly report on Form&nbsp;10-Q for
the three months ended March&nbsp;31, 2007, as filed with the Commission on
May&nbsp;14, 2007.</TD>
</TR>
<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>


<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(3)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The current reports on Form 8-K as filed with the Commission
(File No.&nbsp;001-33249) on January&nbsp;18, 2007 (except for Item&nbsp;7.01 thereof and the related
exhibit), March&nbsp;20, 2007, March&nbsp;21, 2007 (except for Item&nbsp;7.01 thereof and the related
exhibit), March&nbsp;28, 2007, April&nbsp;3, 2007, April&nbsp;19,
2007, May&nbsp;4, 2007, May&nbsp;8, 2007 (containing Item&nbsp;1.01),
May&nbsp;22, 2007, June&nbsp;4, 2007,
June&nbsp;5, 2007 (containing Item&nbsp;2.01), June&nbsp;18, 2007,
and June&nbsp;29, 2007.</TD>
</TR>


<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(4)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The
current reports on Form&nbsp;8-K/A as filed with the Commission (File No.
001-33249) on June&nbsp;29, 2007.</TD>
</TR>


<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR>

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(5)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The description of the Partnership&#146;s units, as set forth in the Partnership&#146;s
Registration Statement on Form 8-A, as filed with the Commission on January&nbsp;10, 2007, and any
amendment or report subsequently filed for the purpose of updating such description.</TD>
</TR>


</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All documents filed with the Commission by the Partnership pursuant to Sections&nbsp;13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended (the &#147;Exchange Act&#148;) (excluding any
information furnished pursuant to Item&nbsp;2.02 and Item&nbsp;7.01 on any current report on Form 8-K),
subsequent to the date of this registration statement and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be
a part hereof from the date of filing of such documents. Any statement contained in this
registration statement or in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this registration statement
to the extent that a statement contained herein or in any subsequently filed document which also
is, or is deemed to be, incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this registration statement.
</DIV>
<!-- link2 "Item&nbsp;4. Description of Securities" -->
<DIV align="left"><A NAME="003"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Description of Securities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>
<!-- link2 "Item&nbsp;5. Interests of Named Experts and Counsel" -->
<DIV align="left"><A NAME="004"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. Interests of Named Experts and Counsel</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>
<!-- link2 "Item&nbsp;6. Indemnification of Directors and Officers" -->
<DIV align="left"><A NAME="005"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. Indemnification of Directors and Officers</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;17-108 of the Delaware Revised Uniform Limited Partnership Act empowers a Delaware
limited partnership to indemnify and hold harmless any partner or other person from and against any
and all claims and demands whatsoever. Section&nbsp;7.7 of the Amended and Restated Agreement of
Limited Partnership (the &#147;Partnership Agreement&#148;) of the Partnership provides that to the fullest
extent permitted by law but subject to the limitations expressly provided in the Partnership
Agreement, (a)&nbsp;Legacy Reserves GP, LLC (the &#147;General Partner&#148;),
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II-1<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(b)&nbsp;any former general partner (a &#147;Departing General Partner&#148;), (c)&nbsp;any individual, corporation,
firm, limited liability company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity (collectively, a
&#147;Person&#148;) who is or was an affiliate of the General Partner or any Departing General Partner, (d)
any officer of the Partnership or a subsidiary of the Partnership, (e)&nbsp;any Person who is or was a
member, partner, director, officer, fiduciary or trustee of the General Partner, a Departing
General Partner or any affiliate thereof, (f)&nbsp;any Person who is or was serving at the request of
the General Partner or any Departing General Partner or any affiliate of the General Partner or any
Departing General Partner as an officer, director, member, partner, fiduciary or trustee of another
Person; provided that that Person shall not be included by reason of providing, on a
fee-for-services basis, trustee, fiduciary, or custodial services, and (g)&nbsp;any Person the General
Partner designates as an &#147;Indemnitee&#148; for purposes of the Partnership Agreement (collectively the
&#147;Indemnitees&#148;), shall be indemnified and held harmless by the Partnership from and against any and
all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and
expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and
all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or
investigative, in which any Indemnitee may be involved, or is threatened to be involved, as a party
or otherwise, by reason of its status as an Indemnitee; <I>provided</I>, that the Indemnitee shall not be
indemnified and held harmless if there has been a final and non-appealable judgment entered by a
court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee
is seeking indemnification pursuant to Section&nbsp;7.7 of the Partnership Agreement, the Indemnitee
acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter,
acted with knowledge that the Indemnitee&#146;s conduct was unlawful; <I>provided</I>, further, no
indemnification pursuant to Section&nbsp;7.7 of the Partnership Agreement shall be available to the
General Partner or its affiliates (other than the Partnership or any of its subsidiaries) with
respect to its or their obligations incurred pursuant to the Purchase Agreement, the Omnibus
Agreement or the Contribution Agreement (other than obligations incurred by the General Partner on
behalf of the Partnership). Any indemnification pursuant to Section&nbsp;7.7 of the Partnership
Agreement shall be made only out of the assets of the Partnership, it being agreed that the General
Partner shall not be personally liable for such indemnification and shall have no obligation to
contribute or loan any monies or property to the Partnership to enable it to effectuate such
indemnification.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.7(b) of the Partnership Agreement also states that to the fullest extent permitted
by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified
pursuant to Section&nbsp;7.7(a) of the Partnership Agreement in defending any claim, demand, action,
suit or proceeding shall, from time to time, be advanced by the Partnership prior to a
determination that the Indemnitee is not entitled to be indemnified upon receipt by the Partnership
of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined
that the Indemnitee is not entitled to be indemnified as authorized in Section&nbsp;7.7 of the
Partnership Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;7.8(a) of the Partnership Agreement provides that no Indemnitee shall be liable for
monetary damages to the Partnership, the limited partners of the Partnership or any other Persons
who have acquired interests in units representing limited partner interests in the Partnership or
any other class or series of equity interest of the Partnership (but excluding any options, rights,
warrants and appreciation rights relating to an equity interest in the Partnership), for losses
sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there
has been a final and non-appealable judgment entered by a court of competent jurisdiction
determining that, in respect of the matter in question, the Indemnitee acted in bad faith or
engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge
that the Indemnitee&#146;s conduct was criminal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Underwriting
Agreement entered into by the Partnership in connection with its initial
public offering of units provides for the indemnification of the directors and officers of
the General Partner in certain circumstances by the underwriters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, the Partnership Agreement provides that the Partnership may purchase and maintain
(or reimburse the General Partner or its affiliates for the cost of) insurance, on behalf of the
General Partner, its affiliates and such other Persons as the General Partner shall determine,
which insurance may include directors&#146; and officers&#146; liability insurance policies for the directors
and officers of the General Partner.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Reference is made to
Item&nbsp;9 for the Partnership&#146;s undertakings with respect to indemnification
for liabilities arising under the Securities Act.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II-2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
</DIV>
<!-- link2 "Item&nbsp;7. Exemption from Registration Claimed" -->
<DIV align="left"><A NAME="006"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;7. Exemption from Registration Claimed</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>
<!-- link2 "Item&nbsp;8. Exhibits" -->
<DIV align="left"><A NAME="007"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;8. Exhibits</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">

<TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Exhibit<br>Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<DIV align="left">
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amended and Restated Limited Partnership Agreement of Legacy Reserves LP
(Incorporated by reference to Legacy Reserves LP&#146;s Registration Statement on Form&nbsp;S-1
(File No.&nbsp;333-134056) filed May&nbsp;12, 2006, included as Appendix&nbsp;A to the Prospectus and
including specimen unit certificate for the units).</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amended and Restated Limited Liability Company Agreement of Legacy Reserves GP,
LLC (Incorporated by reference to Legacy Reserves LP&#146;s Registration Statement on Form
S-1 (File No.&nbsp;333-134056) filed May&nbsp;12, 2006, Exhibit&nbsp;3.4).</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Legacy Reserves, LP Long-Term Incentive Plan (Incorporated by reference to
Legacy Reserves LP&#146;s Registration Statement on Form&nbsp;S-1 (File No.&nbsp;333-134056) filed May
12, 2006, Exhibit&nbsp;10.5).</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*5.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Opinion of Andrews Kurth LLP with respect to legality of the securities.</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*23.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>

<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Consent of BDO Seidman, LLP.</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*23.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Consent of LaRoche Petroleum Consultants, Ltd.</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">*23.3</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Consent of Andrews Kurth LLP (included as part of Exhibit&nbsp;5.1).</DIV></TD>
</TR>
<!-- End Table Body -->
</DIV>
</TABLE>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Filed herewith.</TD>
</TR>

</TABLE>


<!-- link2 "Item&nbsp;9. Undertakings" -->
<DIV align="left"><A NAME="008"></A></DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9. Undertakings</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The undersigned registrant hereby undertakes:</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) To include any prospectus required by Section&nbsp;10(a)(3) of the Securities Act of
1933;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) To reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering price set forth in the
&#147;Calculation of Registration Fee&#148; table in the effective registration statement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) To include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such
information in the registration statement;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 4%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>Provided, however, </I>that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II-3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)&nbsp;To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(b)&nbsp;The undersigned registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the registrant&#146;s annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan&#146;s annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">(c)&nbsp;Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
provisions described under Item&nbsp;6 above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment of the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Act and will be governed by the final adjudication of such issue.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->II-4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "SIGNATURES" -->
<DIV align="left"><A NAME="009"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Midland,
State of Texas, on
July 13, 2007.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">LEGACY RESERVES LP<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" align="left">LEGACY RESERVES GP, LLC,&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">its general partner&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">/s/ Steven H. Pruett</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">Steven H. Pruett&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">President, Chief Financial Officer and Secretary&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left"><A NAME="011"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>POWER OF ATTORNEY</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each person whose signature appears below appoints Cary D. Brown and Steven H. Pruett, and
each of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments thereto) to this Registration Statement and any Registration Statement
(including any amendment thereto) for this offering that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents or any of them of their or his substitute and substitutes, may lawfully
do or cause to be done by virtue hereof.
</DIV>




<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates indicated.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">/s/ Cary D. Brown</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Cary D. Brown
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chief Executive Officer and Director<BR>
(Principal Executive Officer)
</TD>
    <TD>&nbsp;</TD>

<TD align="center" valign="top">July 13, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">/s/ Steven H. Pruett</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Steven H. Pruett
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">President, Chief Financial Officer <BR>
and Secretary (Principal Financial <BR>
Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">July 13, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">/s/ William M. Morris</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
William M. Morris
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Vice President, Chief Accounting <BR>
Officer and Controller (Principal <BR>
Accounting Officer)
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">July 13, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">/s/ Kyle A. McGraw</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Kyle A. McGraw
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Executive Vice President and Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">July 13, 2007</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">/s/ Dale A. Brown</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Dale A. Brown</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">July 13, 2007</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">/s/ G. Larry Lawrence</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
G. Larry Lawrence
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">July 13, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">/s/ William D. Sullivan</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
William D. Sullivan
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">July 13, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>


<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-5<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="30%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">/s/ S. Wil VanLoh, Jr.</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
S. Wil VanLoh, Jr.
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">July 13, 2007</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>


<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">/s/ Kyle D. Vann</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Kyle D. Vann
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">July 13, 2007</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->II-6<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<!-- link1 "EXHIBIT INDEX" -->
<DIV align="left"><A NAME="010"></A></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="3">Exhibit</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000">Number</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" style="border-bottom: 1px solid #000000">Description</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.1</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amended and Restated Limited Partnership Agreement of Legacy Reserves LP
(Incorporated by reference to Legacy Reserves LP&#146;s Registration Statement on Form&nbsp;S-1
(File No.&nbsp;333-134056) filed May&nbsp;12, 2006, included as Appendix&nbsp;A to the Prospectus and
including specimen unit certificate for the units).</DIV></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">&nbsp;</TD>
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
</TR>
<TR valign="bottom">
    <TD nowrap align="right" valign="top">&nbsp;</TD>
    <TD align="right" valign="top">4.2</TD>
    <TD nowrap valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Amended and Restated Limited Liability Company Agreement of Legacy Reserves GP,
LLC (Incorporated by reference to Legacy Reserves LP&#146;s Registration Statement on Form
S-1 (File No.&nbsp;333-134056) filed May&nbsp;12, 2006, Exhibit&nbsp;3.4).</DIV></TD>
</TR>
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    <TD nowrap align="right" valign="top">&nbsp;</TD>
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Legacy Reserves LP&#146;s Registration Statement on Form&nbsp;S-1 (File No.&nbsp;333-134056) filed May
12, 2006, Exhibit&nbsp;10.5).</DIV></TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Opinion of Andrews Kurth LLP with respect to legality of the securities.</DIV></TD>
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<TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Consent of BDO Seidman, LLP.</DIV></TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Consent of LaRoche Petroleum Consultants, Ltd.</DIV></TD>
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    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Consent of Andrews Kurth LLP (included as part of Exhibit&nbsp;5.1).</DIV></TD>
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[{"type": "S-8", "sequence": "1", "filename": "h47934asv8.htm", "description": "FORM S-8 - REGISTRATION STATEMENT", "secsgml_size_bytes": 213985}]
{"company-data": {"conformed-name": "LEGACY RESERVES L P", "cik": "0001358831", "assigned-sic": "1311", "irs-number": "000000000"}, "filing-values": {"form-type": "S-8", "act": "33", "file-number": "333-144586", "film-number": "07979569"}, "business-address": {"street1": "303 W WALL ST SUITE 1600", "city": "MIDLAND", "state": "TX", "zip": "79701", "phone": "432-682-2516"}, "mail-address": {"street1": "303 W WALL ST SUITE 1600", "city": "MIDLAND", "state": "TX", "zip": "79701"}}
sv8
Table of Contents
As filed with the
Securities and Exchange Commission on July 13, 2007
Registration
No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Legacy Reserves LP
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation or organization)
16-1751069
(I.R.S. Employer
Identification No.)
303 W. Wall, Suite 1400
Midland, Texas
(Address of Principal Executive Offices)
79701
(Zip Code)
Legacy Reserves LP Long-Term Incentive Plan
(Full title of the plan)
Steven H. Pruett
President and Chief Financial Officer
Legacy Reserves GP, LLC
303 W. Wall, Suite 1400
Midland, Texas 79701
(Name and address of agent for service)
(432) 689-5200
(Telephone number, including area code, of agent for service)
Copies to:
Gislar Donnenberg
Andrews Kurth LLP
600 Travis, Suite 4200
Houston, Texas 77002
Telephone: (713) 220-4200
CALCULATION OF REGISTRATION FEE
Proposed
Proposed
maximum
maximum
Amount of
Title of securities
Amount to be
offering price
aggregate
registration
to be registered
registered (1)(2)
per unit (3)
offering price
fee
Units representing limited partner interests
65,116
Units
$
26.88
$
1,750,319
$
54
(1)
Pursuant to Rule 416 under the Securities Act of 1933, as amended (the "Securities Act"),
this registration statement also covers an indeterminate number of additional units as may be
necessary to adjust the number of units being offered or issued pursuant to the plan as a
result of unit splits, unit distributions or similar transactions.
(2)
Represents units issued and reserved for issuance under the Legacy Reserves LP Long-Term Incentive Plan.
(3)
The registration fee for such units was calculated in accordance with Rule 457(c) and (h)
under the Securities Act and based upon the average of the high and low sales prices of the
units as reported on The NASDAQ Global Select Market on July 11, 2007.
TABLE OF CONTENTS
EXPLANATORY NOTE
2
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
2
2
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
II-1
II-1
Item 3. Incorporation of Documents by Reference
II-1
Item 4. Description of Securities
II-1
Item 5. Interests of Named Experts and Counsel
II-1
Item 6. Indemnification of Directors and Officers
II-1
Item 7. Exemption from Registration Claimed
II-3
Item 8. Exhibits
II-3
Item 9. Undertakings
II-3
SIGNATURES
II-5
POWER OF ATTORNEY
II-5
EXHIBIT INDEX
II-7
Opinion of Andrews Kurth LLP
Consent of BDO Seidman, LLP
Consent of LaRoche Petroleum Consultants, Ltd.
EXPLANATORY NOTE
The
material which follows, up to but not including the page beginning
Part II of this Registration Statement, constitutes a
"reoffer" prospectus prepared in accordance with
Part I of Form S-3 to be used in connection with resales of
restricted units issued under an employee benefit plan. These units
may be considered "control securities" or "restricted
securities" as defined in General Instruction C(1) to
Form S-8.
This registration statement registers 65,116 units representing limited partner interests
(the "Units") in Legacy Reserves LP (the
"Partnership") issued or reserved for issuance under the Legacy Reserves LP
Long-Term Incentive Plan (the "Plan") to be offered pursuant to the reoffer prospectus included
herein. This registration of 65,116 Units increases the number of Units registered
for issuance under the Plan to 1,991,250. As permitted by General Instruction E to Form S-8,
this registration statement incorporates by reference the registration statement on Form S-8, File
No. 333-141824, which was filed by the Partnership with the Securities and Exchange Commission (the
"Commission") on April 3, 2007.
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
The document(s) containing the information specified in Part I of Form S-8 (plan information
and registrant information) will be sent or given to employees as specified by Rule 428(b)(1) under
the Securities Act of 1933, as amended (the "Securities Act"). In accordance with Rule 428 and the
requirements of Part I of Form S-8, such documents are not being filed with the Commission either as part of this registration statement or as
prospectuses or prospectus supplements pursuant to Rule 424
under the Securities Act. The Partnership shall maintain a file of such documents in accordance with the
provisions of Rule 428(a)(2) of the Securities Act. Upon request, the Partnership shall furnish to
the Commission or its staff a copy of any or all of the documents included in the file.
-2-
Table of Contents
PROSPECTUS
Legacy Reserves LP
65,116 Units
Representing Limited Partner Interests
The selling unitholders identified in this prospectus will from time to time sell the units
offered by this prospectus. Please read "Selling Unitholders." The units to be sold by the
selling unitholders were acquired pursuant to the Legacy Reserves LP Long-Term Incentive Plan.
The sales
may occur on the NASDAQ Global Select Market at prevailing market prices, in negotiated
transactions or through a combination of these methods. The selling unitholders may offer the units
at fixed prices, at market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. We will not receive proceeds from any of these
sales. We are paying the expenses incurred in registering the units, but all selling and other
expenses incurred by the selling unitholders will be borne by the selling unitholders.
The units included in this prospectus are "restricted securities" under the Securities Act of
1933, as amended (the "Securities Act"), before their sale under this prospectus as such units were
not previously registered. This prospectus has been prepared for the purpose of registering the
units under the Securities Act to allow for future sales by the selling unitholders, on a
continuous or delayed basis, to the public without restriction (except that all sales hereunder
must comply with the limitation on amount of securities sold specified in Rule 144 of the
Securities Act).
The selling unitholders and any broker-dealer or agents involved in the sale or resale of the
unit may be deemed to be "underwriters" within the meaning of the Securities Act. In addition, any
commissions, discounts or concessions paid to any such broker-dealer or agent in connection with
the sale or resale of the shares may be deemed to be underwriting commissions or discounts under
the Securities Act. Please read "Plan of Distribution."
Our units
are listed for quotation on the NASDAQ Global Select Market under the symbol "LGCY."
On July 12, 2007 the last reported sales price of our units, as reported on the NASDAQ Global
Select Market, was $26.78 per unit. Our principal executive offices are located at 303 W. Wall, Suite
1400, Midland, Texas 79701, and our telephone number is
(432) 689-5200.
Investing in our units involves a high degree of risk. See "Risk Factors" beginning on page 1.
These risks include the following:
•
We may not have sufficient available cash to pay the full amount of our current
quarterly distribution or any distribution at all following establishment of cash reserves
and payment of fees and expenses, including payments to our general partner.
•
If we are not able to acquire additional oil and natural gas reserves on economically
acceptable terms, our reserves and production will decline, which would adversely affect
our business, results of operations and financial condition and our ability to make cash
distributions to our unitholders.
•
If commodity prices decline significantly for a prolonged period, we may be forced to
reduce our distribution or not be able to pay distributions at all.
•
Our Founding Investors, including members of our management,
own a 51% limited partner
interest in us and control our general partner, which has sole responsibility for
conducting our business and managing our operations. Our general partner has conflicts of
interest and limited fiduciary duties, which may permit it to favor its own interests to
the detriment of our unitholders.
•
Even if unitholders are dissatisfied they cannot remove our general partner without the
consent of unitholders owning at least
66
2
/
3
% of our units, including units owned by our
general partner and its affiliates.
•
Our unitholders may be required to pay taxes on their share of our income even if they
do not receive any cash distributions from us.
Neither
the Securities and Exchange Commission (the "Commission") nor any state securities commission
has approved or disapproved of these securities or determined whether this prospectus is truthful
or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is July 13, 2007.
Table of Contents
TABLE OF CONTENTS
RISK FACTORS
1
RISKS RELATED TO OUR BUSINESS
1
RISKS RELATED TO OUR LIMITED PARTNERSHIP STRUCTURE
8
TAX RISKS TO UNITHOLDERS
12
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
14
LEGACY RESERVES LP
15
USE OF PROCEEDS
15
SELLING UNITHOLDERS
15
PLAN OF DISTRIBUTION
16
LEGAL MATTERS
18
EXPERTS
18
INFORMATION INCORPORATED BY REFERENCE
19
WHERE YOU CAN FIND MORE INFORMATION
19
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
20
EXEMPTION FROM REGISTRATION
20
References in this prospectus to "Legacy Reserves," "Legacy," the "Partnership," "we," "our,"
"us," or like terms prior to March 15, 2006 refer to the Moriah Group, Legacy
Reserves LP's predecessor, including the oil and natural gas properties we acquired in exchange for units and
cash from the Moriah Group, the Brothers Group, H2K Holdings, MBN Properties (our "Founding
Investors") and certain charitable foundations in connection with our private equity offering on
March 15, 2006. When used for periods from March 15, 2006 forward, those terms refer to Legacy
Reserves LP and its subsidiaries.
You should rely only on the information contained in or incorporated by reference in this
prospectus. We have not authorized anyone to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on it. The selling
unitholders are offering to sell, and seeking offers to buy, units only in jurisdictions where
offers and sales of our units are permitted. The information contained in this prospectus is
accurate only as of the date of this prospectus, regardless of the date of delivery of this
prospectus or any sale of units. The information contained in the documents incorporated by
reference in this prospectus is accurate only as of the date of the document incorporated by
reference. Neither the delivery of this prospectus nor any sale or offer to sell the units made
hereunder shall under any circumstances create any implication that there has been no change in our
affairs since the date hereof or that the information contained herein is correct as of any time
subsequent to the date hereof.
i
Table of Contents
RISK FACTORS
RISKS RELATED TO OUR BUSINESS
We may not have sufficient available cash to pay the full amount of our current quarterly
distribution or any distribution at all following establishment of cash reserves and payment of
fees and expenses, including payments to our general partner.
We may not have sufficient available cash each quarter to pay the full amount of our current
quarterly distribution or any distribution at all. The amount of cash we distribute in any quarter
to our unitholders may fluctuate significantly from quarter to quarter and may be significantly
less than our current quarterly distribution of $0.41 per unit. Under the terms of our partnership
agreement, the amount of cash otherwise available for distribution will be reduced by our operating
expenses and the amount of any cash reserves that our general partner establishes to provide for
future operations, future capital expenditures, future debt service requirements and future cash
distributions to our unitholders. Further, our debt agreements contain restrictions on our ability
to pay distributions. The amount of cash we can distribute on our units principally depends upon
the amount of cash we generate from our operations, which will fluctuate from quarter to quarter
based on, among other things:
•
the amount of oil and natural gas we produce;
•
the price at which we are able to sell our oil and natural gas production;
•
whether we are able to acquire additional oil and natural gas properties at economically attractive prices;
•
whether we are able to continue our exploitation activities at economically attractive costs;
•
the level of our operating costs, including payments to our general partner;
•
the level of our interest expense, which depends on the amount of our indebtedness and
the interest payable thereon; and
•
the level of our capital expenditures.
If we are not able to acquire additional oil and natural gas reserves on economically acceptable
terms, our reserves and production will decline, which would adversely affect our business, results
of operations and financial condition and our ability to make cash distributions to our
unitholders.
If we are unable to develop our proved undeveloped reserves and our wells do not produce as
expected, our reserves may decline more rapidly than we have estimated. Our future oil and natural
gas reserves and production and, therefore, our cash flow and income are highly dependent on our
success in efficiently developing and exploiting our current reserves and economically finding or
acquiring additional recoverable reserves. We may not be able to develop, find or acquire
additional reserves to replace our current and future production at acceptable costs, which would
adversely affect our business, results of operations, financial condition and our ability to make
cash distributions to our unitholders.
Because we distribute all of our available cash to our unitholders, our future growth may be
limited.
Since we will distribute all of our available cash as defined in our partnership agreement to
our unitholders, our growth may not be as fast as businesses that reinvest their available cash to
expand ongoing operations. We will depend on financing provided by commercial banks and other
lenders and the issuance of debt and equity securities to finance any significant growth or
acquisitions. If we are unable to obtain adequate financing from these sources, our ability to grow
will be limited.
1
Table of Contents
If commodity prices decline significantly for a prolonged period, we may be forced to reduce our
distribution or not be able to pay distributions at all.
A significant decline in oil and natural gas prices over a prolonged period would have a
significant impact on the value of our reserves and on our cash flow, which would force us to
reduce or suspend our distribution. Prices for oil and natural gas may fluctuate widely in response
to relatively minor changes in the supply of and demand for oil and natural gas, market uncertainty
and a variety of additional factors that are beyond our control, such as:
•
domestic and foreign supply of and demand for oil and natural gas;
•
the price and quantity of imports of crude oil and natural gas;
•
overall domestic and global economic conditions;
•
political and economic conditions in other oil and natural gas producing countries,
including embargoes and continued hostilities in the Middle East and other sustained
military campaigns, and acts of terrorism or sabotage;
•
the ability of members of the Organization of Petroleum Exporting Countries to agree to
and maintain oil price and production controls;
•
the level of consumer product demand;
•
conditions;
•
the impact of the U.S. dollar exchange rates on oil and natural gas prices; and
•
the price and availability of alternative fuels.
In the past, the prices of oil and natural gas have been extremely volatile, and we expect
this volatility to continue. For example, during the year ended December 31, 2006, the NYMEX
monthly oil index price ranged from a high of $77.03 per Bbl to a low of $55.81 per Bbl and the
NYMEX gas index price (near month contract) ranged from a high of $10.63 per MMbtu to a low of
$4.20 per MMBtu.
If commodity prices decline significantly for a prolonged period, a significant portion of our
exploitation projects may become uneconomic, which may adversely affect our ability to make
distributions to our unitholders.
Lower oil and natural gas prices may not only decrease our revenues, but also reduce the
amount of oil and natural gas that we can produce economically. Furthermore, substantial decreases
in oil and natural gas prices as were experienced as recently as 2002, when prices of less than
$20.00 per Bbl of oil and $2.00 per Mcf of natural gas were received at the wellhead in the Permian
Basin, would render a significant portion of our exploitation projects uneconomic. This may result
in our having to make substantial downward adjustments to our estimated proved reserves. If this
occurs, or if our estimates of development costs increase, production data factors change or
drilling results deteriorate, accounting rules may require us to write down, as a non-cash charge
to earnings, the carrying value of our oil and natural gas properties for impairments. We may incur
impairment charges in the future, which could have a material adverse effect on our results of
operations in the period taken and our ability to borrow funds under our credit facility to pay
distributions to our unitholders.
Our estimated reserves are based on many assumptions that may prove inaccurate. Any material
inaccuracies in these reserve estimates or underlying assumptions will materially affect the
quantities and present value of our reserves.
No one can measure underground accumulations of oil and natural gas in an exact way. Oil and
natural gas reserve engineering requires subjective estimates of underground accumulations of oil
and natural gas and assumptions concerning future oil and natural gas prices, production levels,
and operating and development costs.
2
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As a result, estimated quantities of proved reserves and projections of future production
rates and the timing of development expenditures may prove to be inaccurate. Any material
inaccuracies in these reserve estimates or underlying assumptions will materially affect the
quantities and present value of our reserves which could adversely affect our business, results of
operations, financial condition and our ability to make cash distributions to our unitholders.
Our credit facility has substantial restrictions and financial covenants, and our borrowing base is
subject to redetermination by our lenders which could adversely affect our business, results of
operations, financial condition and our ability to make cash distributions to our unitholders.
We will depend on our revolving credit facility for future capital needs. Our revolving credit
facility restricts, among other things, our ability to incur debt and pay distributions, and
requires us to comply with certain financial covenants and ratios. Our ability to comply with these
restrictions and covenants in the future is uncertain and will be affected by the levels of cash
flow from our operations and events or circumstances beyond our control. Our failure to comply with
any of the restrictions and covenants under our revolving credit facility could result in a default
under our revolving credit facility. A default under our revolving credit facility could cause all
of our existing indebtedness to be immediately due and payable. Additionally, our revolving credit
facility limits the amounts we can borrow to a borrowing base amount, determined by the lenders in
their sole discretion.
We are prohibited from borrowing under our revolving credit facility to pay distributions to
unitholders if the amount of borrowings outstanding under our revolving credit facility reaches or
exceeds 90% of the borrowing base, which is the amount of money available for borrowing, as
determined semi-annually by our lenders in their sole discretion. The lenders will redetermine the
borrowing base based on an engineering report with respect to our oil and natural gas reserves,
which will take into account the prevailing oil and natural gas prices at such time. Any time our
borrowings exceed 90% of the then specified borrowing base, our ability to pay distributions to our
unitholders in any such quarter is solely dependent on our ability to generate sufficient cash from
our operations.
Outstanding borrowings in excess of the borrowing base must be repaid, and, if mortgaged
properties represent less than 80% of total value of oil and gas properties used to determine the
borrowing base, we must pledge other oil and natural gas properties as additional collateral. We
may not have the financial resources in the future to make any mandatory principal prepayments
required under our revolving credit facility.
The occurrence of an event of default or a negative redetermination of our borrowing base
could adversely affect our business, results of operations, financial condition and our ability to
make distributions to our unitholders.
Our business depends on gathering and transportation facilities owned by others. Any limitation in
the availability of those facilities would interfere with our ability to market the oil and natural
gas we produce.
The marketability of our oil and natural gas production depends in part on the availability,
proximity and capacity of gathering and pipeline systems owned by third parties. The amount of oil
and natural gas that can be produced and sold is subject to curtailment in certain circumstances,
such as pipeline interruptions due to scheduled and unscheduled maintenance, excessive pressure,
physical damage to the gathering or transportation system, or lack of contracted capacity on such
systems. The curtailments arising from these and similar circumstances may last from a few days to
several months. In many cases, we are provided only with limited, if any, notice as to when these
circumstances will arise and their duration. Any significant curtailment in gathering system or
pipeline capacity, or significant delay in the construction of necessary gathering and
transportation facilities, could adversely affect our business, results of operations, financial
condition and our ability to make cash distributions to our unitholders.
Our exploitation projects require substantial capital expenditures, which will reduce our cash
available for distribution. We may be unable to obtain needed capital or financing on satisfactory
terms, which could lead to a decline in our oil and natural gas reserves.
We make and expect to continue to make substantial capital expenditures in our business for
the exploitation, development, production and acquisition of oil and natural gas reserves. These
expenditures will reduce our cash available for distribution. We intend to finance our future
capital expenditures with cash flow from operations and
3
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borrowings under our revolving credit facility. Our cash flow from operations and access to
capital are subject to a number of variables, including:
•
our proved reserves;
•
the level of oil and natural gas we are able to produce from existing wells;
•
the prices at which our oil and natural gas are sold; and
•
our ability to acquire, locate and produce new reserves.
If our revenues or the borrowing base under our credit facility decrease as a result of lower
oil and/or natural gas prices, operating difficulties, declines in reserves or for any other
reason, we may have limited ability to obtain the capital necessary to sustain our operations at
current levels. Our credit facility restricts our ability to obtain new financing. If additional
capital is needed, we may not be able to obtain debt or equity financing. If cash generated by
operations or available under our revolving credit facility is not sufficient to meet our capital
requirements, the failure to obtain additional financing could result in a curtailment of our
operations relating to development of our prospects, which in turn could lead to a decline in our
oil and natural gas reserves, and could adversely affect our business, results of operations,
financial condition and our ability to make cash distributions to our unitholders.
We do not control all of our operations and exploitation projects and failure of an operator of
wells in which we own partial interests to adequately perform could adversely affect our business,
results of operations, financial condition and our ability to make cash distributions to our
unitholders.
Much of our business activities are conducted through joint operating agreements under which
we own partial interests in oil and natural gas wells. We currently operate approximately 66% of
our production.
If we do not operate wells in which we own an interest, we do not have control over normal
operating procedures, expenditures or future development of underlying properties. The success and
timing of our exploitation activities on properties operated by others is outside of our control.
The failure of an operator of wells in which we own partial interests to adequately perform
operations, or an operator's breach of the applicable agreements, could reduce our production and
revenues and could adversely affect our business, results of operations, financial condition and
our ability to make cash distributions to our unitholders.
Shortages of drilling rigs, equipment and crews could delay our operations, adversely affect our
ability to increase our reserves and production and reduce our cash available for distribution to
our unitholders.
Higher oil and natural gas prices generally increase the demand for drilling rigs, equipment
and crews and can lead to shortages of, and increasing costs for, drilling equipment, services and
personnel. Shortages of, or increasing costs for, experienced drilling crews and oil field
equipment and services could restrict our ability to drill the wells and conduct the operations
which we currently have planned. Any delay in the drilling of new wells or significant increase in
drilling costs could adversely affect our ability to increase our reserves and production and
reduce our revenues and cash available for distribution to our unitholders.
Increases in the cost of drilling rigs, service rigs, pumping services and other costs in drilling
and completing wells could reduce the viability of certain of our exploitation projects.
The rig count and the cost of rigs and oil field services necessary to implement our
exploitation projects have risen significantly with the increases in oil and natural gas prices.
Increased capital requirements for our projects will result in higher reserve replacement costs
which could reduce cash available for distribution. Higher project costs could cause certain of our
projects to become uneconomic and therefore not to be implemented, reducing our production and cash
available for distribution.
4
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Drilling for and producing oil and natural gas are high risk activities with many uncertainties
that could adversely affect our business, results of operations, financial condition and our
ability to make cash distributions to our unitholders.
Our drilling activities are subject to many risks, including the risk that we will not
discover commercially productive reservoirs. Drilling for oil and natural gas can be uneconomic,
not only from dry holes, but also from productive wells that do not produce sufficient revenues to
be commercially viable.
In addition, our drilling and producing operations may be curtailed, delayed or canceled as a
result of other factors, including:
•
the high cost, shortages or delivery delays of equipment and services;
•
unexpected operational events;
•
adverse weather conditions;
•
facility or equipment malfunctions;
•
title disputes;
•
pipeline ruptures or spills;
•
collapses of wellbore, casing or other tubulars;
•
unusual or unexpected geological formations;
•
of drilling fluid circulation;
•
formations with abnormal pressures;
•
fires;
•
blowouts, craterings and explosions; and
•
uncontrollable flows of oil, natural gas or well fluids.
Any of these events can cause substantial losses, including personal injury or loss of life,
damage to or destruction of property, natural resources and equipment, pollution, environmental
contamination, loss of wells and regulatory penalties.
We ordinarily maintain insurance against various losses and liabilities arising from our
operations; however, insurance against all operational risks is not available to us. Additionally,
we may elect not to obtain insurance if we believe that the cost of available insurance is
excessive relative to the perceived risks presented. Losses could therefore occur for uninsurable
or uninsured risks or in amounts in excess of existing insurance coverage. The occurrence of an
event that is not fully covered by insurance could have a material adverse impact on our business,
results of operations, financial condition and our ability to make cash distributions to our
unitholders.
Increases in interest rates, which have recently experienced record lows, will reduce our cash
available for distribution.
The credit markets recently have experienced 50-year record lows in interest rates. If the
overall economy strengthens, it is likely that monetary policy will tighten further, resulting in
higher interest rates to counter possible inflation. Additionally, interest rates on future credit
facilities and debt offerings could be higher than current levels,
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causing our financing costs to increase accordingly. Increased interest expense and financing
costs will reduce our cash available for distribution.
We may have assumed unknown liabilities in connection with the formation transactions and our
subsequent acquisitions.
As part of the formation transactions and subsequent acquisitions, our properties may be
subject to existing liabilities, some of which may have been unknown at the closing of such
transactions. Unknown liabilities might include liabilities for cleanup or remediation of
undisclosed or unknown environmental conditions, claims of vendors or other persons (that had not
been asserted or threatened prior to the closing of such transactions), tax liabilities and accrued
but unpaid liabilities incurred in the ordinary course of business.
Properties that we buy may not produce as projected, and we may be unable to determine reserve
potential, identify liabilities associated with the properties or obtain protection from sellers
against such liabilities.
One of our growth strategies is to acquire additional oil and natural gas reserves. However,
our reviews of acquired properties are inherently incomplete because it generally is not feasible
to review in depth every individual property involved in each acquisition. Even a detailed review
of records and properties may not necessarily reveal existing or potential problems, nor will it
permit a buyer to become sufficiently familiar with the properties to assess fully their
deficiencies and potential. Inspections may not always be performed on every well, and
environmental problems, such as ground water contamination, are not necessarily observable even
when an inspection is undertaken. Even when problems are identified, we often assume environmental
and other risks and liabilities in connection with acquired properties.
Our identified drilling location inventories are scheduled out over several years, making them
susceptible to uncertainties that could materially alter the occurrence or timing of their
drilling.
Our management team has specifically identified and scheduled drilling locations as an
estimation of our future multi-year drilling activities on our acreage. We have identified, as of
December 31, 2006, 119 gross (69.1 net) proved undeveloped drilling locations. These identified
drilling locations represent a significant part of our growth strategy. Our ability to drill and
develop these locations depends on a number of factors, including the availability of capital,
seasonal conditions, regulatory approvals, oil and natural gas prices, costs and drilling results.
Our final determination on whether to drill any of these drilling locations will be dependent upon
the factors described above as well as, to some degree, the results of our drilling activities with
respect to our proved drilling locations. Because of these uncertainties, we do not know if the
numerous drilling locations we have identified will be drilled within our expected timeframe or
will ever be drilled or if we will be able to produce oil or natural gas from these or any other
potential drilling locations. As such, our actual drilling activities may be materially different
from those presently identified, which could adversely affect our business, results of operations,
financial condition and our ability to make cash distributions to our unitholders.
Our hedging activities could result in cash losses, could reduce our cash available for
distributions and may limit potential gains.
We have entered into, and we may in the future enter into, hedging arrangements for a
significant portion of our oil and natural gas production. Many derivative instruments that we
employ require us to make cash payments to the extent the applicable index exceeds a predetermined
price, thereby limiting our ability to realize the benefit of increases in oil and natural gas
prices. For example, during the year ended December 31, 2006 our average historical unhedged sales
price for oil was $60.55 per Bbl and our average historical sales price including the effects of
realized hedge settlements was $51.65 per Bbl. For the same period, our average historical unhedged
sales price for natural gas was $6.57 per Mcf and our average historical sales price including the
effects of realized hedge settlements was $9.48 per Mcf. Net hedge settlement losses were
approximately $0.3 million for the year ended December 31, 2006. During the year ended December 31,
2006, 89% of our oil and 79% of our natural gas production was hedged.
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If our actual production and sales for any period are less than our hedged production and
sales for that period (including reductions in production due to operational delays) or if we are
unable to perform our drilling activities as planned, we might be forced to satisfy all or a
portion of our hedging obligations without the benefit of the cash flow from our sale of the
underlying physical commodity, resulting in a substantial diminution of our liquidity. Lastly, an
attendant risk exists in hedging activities that the counterparty in any derivative transaction
cannot or will not perform under the instrument and that we will not realize the benefit of the
hedge. Under our credit facility, we are prohibited from hedging all of our production, and we
therefore retain the risk of a price decrease on our unhedged volumes.
The inability of one or more of our customers to meet their obligations may adversely affect our
financial condition and results of operations.
Substantially all of our accounts receivable result from oil and natural gas sales or joint
interest billings to third parties in the energy industry. This concentration of customers and
joint interest owners may impact our overall credit risk in that these entities may be similarly
affected by changes in economic and other conditions. In addition, our oil and natural gas hedging
arrangements expose us to credit risk in the event of nonperformance by counterparties.
We depend on a limited number of key personnel who would be difficult to replace.
Our operations are dependent on the continued efforts of our executive officers, senior
management and key employees. The loss of any member of our senior management or other key
employees could negatively impact our ability to execute our strategy.
We may be unable to compete effectively with larger companies, which could have a material adverse
effect on our business, results of operations, financial condition and our ability to make cash
distributions to our unitholders.
The oil and natural gas industry is intensely competitive, and we compete with other companies
that have greater resources than us. Our ability to acquire additional properties and to discover
reserves in the future will be dependent upon our ability to evaluate and select suitable
properties and to consummate transactions in a highly competitive environment. Many of our larger
competitors not only explore for and produce oil and natural gas, but also carry on refining
operations and market petroleum and other products on a regional, national or worldwide basis.
These companies may be able to pay more for productive natural gas properties and exploratory
prospects or define, evaluate, bid for and purchase a greater number of properties and prospects
than our financial or human resources permit. In addition, these companies may have a greater
ability to continue exploration and exploitation activities during periods of low oil and natural
gas market prices and to absorb the burden of present and future federal, state, local and other
laws and regulations. Our inability to compete effectively with larger companies could have a
material adverse effect on our business, results of operations, financial condition and our ability
to make cash distributions to our unitholders.
If we fail to develop or maintain an effective system of internal controls, we may not be able to
accurately report our financial results or prevent fraud. As a result, current and potential
unitholders could lose confidence in our financial reporting, which would harm our business and the
trading price of our units.
A company's internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting
principles. Because of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate. If we
cannot provide reliable financial reports or prevent fraud, our reputation and operating results
could be harmed. We cannot be certain that our efforts to develop and maintain our internal
controls will be successful, that we will be able to maintain adequate controls over our financial
processes and reporting in the future or that we will be able to comply with our obligations under
Section 404 of the Sarbanes-Oxley Act of 2002 by our initial compliance date of December 31, 2007.
Any failure to develop or maintain effective internal controls, or difficulties encountered in
implementing or improving our internal
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controls, could harm our operating results or cause us to fail to meet certain reporting
obligations. Ineffective internal controls could also cause investors to lose confidence in our
reported financial information, which could have a negative effect on the trading price of our
units.
We are subject to complex federal, state, local and other laws and regulations that could adversely
affect the cost, manner or feasibility of conducting our operations.
Our oil and natural gas exploration and production operations are subject to complex and
stringent laws and regulations. In order to conduct our operations in compliance with these laws
and regulations, we must obtain and maintain numerous permits, approvals and certificates from
various federal, state and local governmental authorities. We may incur substantial costs in order
to maintain compliance with these existing laws and regulations. In addition, our costs of
compliance may increase if existing laws and regulations are revised or reinterpreted, or if new
laws and regulations become applicable to our operations. All such costs may have a negative effect
on our business, results of operations, financial condition and ability to make cash distributions
to our unitholders.
Our business is subject to federal, state and local laws and regulations as interpreted and
enforced by governmental authorities possessing jurisdiction over various aspects of the
exploration for and the production of, oil and natural gas. Failure to comply with such laws and
regulations, as interpreted and enforced, could have a material adverse effect on our business,
results of operations, financial condition and our ability to make cash distributions to our
unitholders.
Our operations expose us to significant costs and liabilities with respect to environmental and
operational safety matters.
We may incur significant costs and liabilities as a result of environmental and safety
requirements applicable to our oil and natural gas exploration and production activities. These
costs and liabilities could arise under a wide range of federal, state and local environmental and
safety laws and regulations, including regulations and enforcement policies, which have tended to
become increasingly strict over time. Failure to comply with these laws and regulations may result
in the assessment of administrative, civil and criminal penalties, imposition of cleanup and site
restoration costs and liens, and to a lesser extent, issuance of injunctions to limit or cease
operations. In addition, claims for damages to persons or property may result from environmental
and other impacts of our operations.
Strict, joint and several liability may be imposed under certain environmental laws, which
could cause us to become liable for the conduct of others or for consequences of our own actions
that were in compliance with all applicable laws at the time those actions were taken. New laws,
regulations or enforcement policies could be more stringent and impose unforeseen liabilities or
significantly increase compliance costs. If we were not able to recover the resulting costs through
insurance or increased revenues, our ability to make cash distributions to our unitholders could be
adversely affected.
RISKS RELATED TO OUR LIMITED PARTNERSHIP STRUCTURE
Our
Founding Investors, including members of our management, own a 51% limited partner interest in
us and control our general partner, which has sole responsibility for conducting our business and
managing our operations. Our general partner has conflicts of interest and limited fiduciary
duties, which may permit it to favor its own interests to the detriment of our unitholders.
Our
Founding Investors, including members of our management, own a 51% limited partner
interest in us and control our general partner. Although our general partner has a fiduciary duty
to manage us in a manner beneficial to us and our unitholders, the directors and officers of our
general partner have a fiduciary duty to manage our general partner in a manner beneficial to its
owners, our Founding Investors and their affiliates. Conflicts of interest may arise between our
Founding Investors and their affiliates, including our general partner, on the one hand, and us and
our unitholders, on the other hand. In resolving these conflicts of interest, our general partner
may favor its own interests and the interests of its affiliates over the interests of our
unitholders. These conflicts include, among others, the following situations:
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•
neither our partnership agreement nor any other agreement requires our Founding
Investors or their affiliates, other than our executive officers, to pursue a business
strategy that favors us;
•
our general partner is allowed to take into account the interests of parties other than
us, such as our Founding Investors, in resolving conflicts of interest, which has the
effect of limiting its fiduciary duty to our unitholders;
•
our Founding Investors and their affiliates (other than our executive officers and their
affiliates) may engage in competition with us;
•
our general partner has limited its liability and reduced its fiduciary duties under our
partnership agreement and has also restricted the remedies available to our unitholders for
actions that, without the limitations, might constitute breaches of fiduciary duty. As a
result of purchasing units, unitholders consent to some actions and conflicts of interest
that might otherwise constitute a breach of fiduciary or other duties under applicable
state law;
•
general partner determines the amount and timing of asset purchases and sales, capital
expenditures, borrowings, issuance of additional partnership securities, and reserves, each
of which can affect the amount of cash that is distributed to our unitholders;
•
our general partner determines the amount and timing of any capital expenditures and
whether a capital expenditure is a maintenance capital expenditure, which reduces operating
surplus, or a growth capital expenditure, which does not. Such determination can affect the
amount of cash that is distributed to our unitholders;
•
our general partner determines which costs incurred by it and its affiliates are
reimbursable by us;
•
our partnership agreement does not restrict our general partner from causing us to pay
it or its affiliates for any services rendered to us or entering into additional
contractual arrangements with any of these entities on our behalf;
•
our general partner intends to limit its liability regarding our contractual and other obligations;
•
our general partner controls the enforcement of obligations owed to us by it and its affiliates; and
•
our general partner decides whether to retain separate counsel, accountants, or others
to perform services for us.
Unitholders have limited voting rights and are not entitled to elect our general partner on an
annual or other continuing basis.
Unlike the holders of common stock in a corporation, unitholders have only limited voting
rights on matters affecting our business and, therefore, limited ability to influence management
decisions regarding our business. Unitholders did not elect our general partner or its board of
directors, and while our unitholders will annually elect the board of directors of our general
partner, they will have no right to elect our general partner on an annual or other continuing
basis. As a result of these limitations, the price at which the units will trade could be
diminished because of the absence or reduction of a takeover premium in the trading price.
Even if unitholders are dissatisfied they cannot remove our general partner without the consent of
unitholders owning at least
66
2
/
3
% of our units, including units owned by our general partner and its
affiliates.
Currently, the unitholders are unable to remove our general partner without its consent
because our general partner's affiliates own sufficient units to be able to prevent our general
partner's removal. The vote of the holders of at least
66
2
/
3
% of all outstanding units voting
together as a single class is required to remove the general partner. Affiliates of our general
partner, including members of our management, own 51% of our units.
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Our partnership agreement restricts the voting rights of those unitholders owning 20% or more of
our units.
Unitholders' voting rights are further restricted by the partnership agreement provision
providing that any units held by a person that owns 20% or more of any class of units then
outstanding, other than our general partner, its affiliates, their transferees, and persons who
acquired such units with the prior approval of the board of directors of our general partner,
cannot vote on any matter. Our partnership agreement also contains provisions limiting the ability
of unitholders to call meetings or to acquire information about our operations, as well as other
provisions limiting the unitholders' ability to influence the manner or direction of management.
Our Founding Investors and their affiliates (other than our executive officers and their
affiliates) may compete directly with us.
Our Founding Investors and their affiliates, other than our general partner and our executive
officers and their affiliates, are not prohibited from owning assets or engaging in businesses that
compete directly or indirectly with us. In addition, our Founding Investors or their affiliates,
other than our general partner and our executive officers and their affiliates, may acquire,
develop and operate oil and natural gas properties or other assets in the future, without any
obligation to offer us the opportunity to acquire, develop or operate those assets.
Cost reimbursements due our general partner and its affiliates will reduce our cash available for
distribution to our unitholders.
Prior to making any distribution on our outstanding units, we will reimburse our general
partner and its affiliates for all expenses they incur on our behalf. Any such reimbursement will
be determined by our general partner in its sole discretion. These expenses will include all costs
incurred by our general partner and its affiliates in managing and operating us. The reimbursement
of expenses of our general partner and its affiliates could adversely affect our ability to pay
cash distributions to our unitholders.
Our partnership agreement limits our general partner's fiduciary duties to our unitholders and
restricts the remedies available to unitholders for actions taken by our general partner that might
otherwise constitute breaches of fiduciary duty.
Our partnership agreement contains provisions that reduce the standards to which our general
partner would otherwise be held by state fiduciary duty law. For example, our partnership
agreement:
•
permits our general partner to make a number of decisions in its individual capacity, as
opposed to in its capacity as our general partner. This entitles our general partner to
consider only the interests and factors that it desires, and it has no duty or obligation
to give any consideration to any interest of, or factors affecting, us, our affiliates or
any unitholder;
•
provides that our general partner will not have any liability to us or our unitholders
for decisions made in its capacity as a general partner so long as it acted in good faith,
meaning it believed the decision was in the best interests of our partnership;
•
provides that our general partner is entitled to make other decisions in "good faith" if
it believes that the decision is in our best interest;
•
provides generally that affiliated transactions and resolutions of conflicts of interest
not approved by the conflicts committee of the board of directors of our general partner
and not involving a vote of unitholders must be on terms no less favorable to us than those
generally being provided to or available from unrelated third parties or be "fair and
reasonable" to us, as determined by our general partner in good faith, and that, in
determining whether a transaction or resolution is "fair and reasonable," our general
partner may consider the totality of the relationships between the parties involved,
including other transactions that may be particularly advantageous or beneficial to us; and
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•
provides that our general partner and its officers and directors will not be liable for
monetary damages to us, our unitholders or assignees for any acts or omissions unless there
has been a final and non-appealable judgment entered by a court of competent jurisdiction
determining that the general partner or those other persons acted in bad faith or engaged
in fraud or willful misconduct.
Our partnership agreement permits our general partner to redeem any partnership interests held by a
limited partner who is a non-citizen assignee.
If we are or become subject to federal, state or local laws or regulations that, in the
reasonable determination of our general partner, create a substantial risk of cancellation or
forfeiture of any property that we have an interest in because of the nationality, citizenship or
other related status of any limited partner, our general partner may redeem the units held by the
limited partner at their current market price. In order to avoid any cancellation or forfeiture,
our general partner may require each limited partner to furnish information about his nationality,
citizenship or related status. If a limited partner fails to furnish information about his
nationality, citizenship or other related status within 30 days after a request for the information
or our general partner determines after receipt of the information that the limited partner is not
an eligible citizen, our general partner may elect to treat the limited partner as a non-citizen
assignee. A non-citizen assignee is entitled to an interest equivalent to that of a limited partner
for the right to share in allocations and distributions from us, including liquidating
distributions. A non-citizen assignee does not have the right to direct the voting of his units and
may not receive distributions in kind upon our liquidation.
We may issue an unlimited number of additional units without the approval of our unitholders, which
would dilute their existing ownership interest in us.
Our general partner, without the approval of our unitholders, may cause us to issue an
unlimited number of additional units. The issuance by us of additional units or other equity
securities of equal or senior rank will have the following effects:
•
our unitholders' proportionate ownership interests in us will decrease;
•
the amount of cash available for distribution on each unit may decrease;
•
the risk that a shortfall in the payment of our current quarterly distribution will increase;
•
the relative voting strength of each previously outstanding unit may be diminished; and
•
the market price of the units may decline.
The liability of our unitholders may not be limited if a court finds that unitholder action
constitutes control of our business.
A general partner of a partnership generally has unlimited liability for the obligations of
the partnership, except for those contractual obligations of the partnership that are expressly
made without recourse to the general partner. Our partnership is organized under Delaware law, and
we conduct business in a number of other states. The limitations on the liability of holders of
limited partner interests for the obligations of a limited partnership have not been clearly
established in some of the other states in which we do business. In some states, including
Delaware, a limited partner is only liable if he participates in the "control" of the business of
the partnership. These statutes generally do not define control, but do permit limited partners to
engage in certain activities, including, among other actions, taking any action with respect to the
dissolution of the partnership, the sale, exchange, lease or mortgage of any asset of the
partnership, the admission or removal of the general partner and the amendment of the partnership
agreement. Our unitholders could, however, be liable for any and all of our obligations as if our
unitholders were a general partner if:
•
a court or government agency determined that we were conducting business in a state but
had not complied with that particular state's partnership statute; or
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•
our unitholders' right to act with other unitholders to take other actions under our
partnership agreement that constitute "control" of our business.
Unitholders may have liability to repay distributions that were wrongfully distributed to them.
Under certain circumstances, unitholders may have to repay amounts wrongfully returned or
distributed to them. Under Section 17-607 of the Delaware Revised Uniform Limited Partnership Act,
we may not make a distribution to our unitholders if the distribution would cause our liabilities
to exceed the fair value of our assets. Delaware law provides that for a period of three years from
the date of the distribution, limited partners who received an impermissible distribution and who
knew at the time of the distribution that it violated Delaware law will be liable to the limited
partnership for the distribution amount. Substituted limited partners are liable for the
obligations of the transferring limited partner to make contributions to the partnership that are
known to such substitute limited partner at the time it became a limited partner and for unknown
obligations if the liabilities could be determined from the partnership agreement. Liabilities to
partners on account of their partnership interest and liabilities that are non-recourse to the
partnership are not counted for purposes of determining whether a distribution is permitted.
TAX RISKS TO UNITHOLDERS
Our tax treatment depends on our status as a partnership for federal income tax purposes, as well
as our not being subject to entity-level taxation by individual states. If the IRS were to treat us
as a corporation for federal income tax purposes or we were to become subject to entity-level
taxation for state tax purposes, taxes paid, if any, will reduce our cash available for
distribution to our unitholders.
The anticipated after-tax benefit of an investment in our units depends largely on our being
treated as a partnership for federal income tax purposes. We have not requested, and do not plan to
request, a ruling from the IRS on this or any other tax matter that affects us.
If we were treated as a corporation for federal income tax purposes, we would pay federal
income tax on our taxable income at the corporate tax rates, currently at a maximum rate of 35%,
and would likely pay state income tax at varying rates. Distributions to our unitholders would
generally be taxed as corporate distributions, and no income, gain, loss, deduction or credit would
flow through to our unitholders. Because a tax may be imposed on us as a corporation, our cash
available for distribution to our unitholders could be reduced. Thus, any treatment of us as a
corporation could result in a material reduction in the anticipated cash flow and after-tax return
to our unitholders and, therefore, result in a substantial reduction in the value of our units.
Current law or our business may change so as to cause us to be treated as a corporation for
federal income tax purposes or otherwise subject us to entity-level taxation. In addition, because
of widespread state budget deficits, several states are evaluating ways to subject partnerships to
entity-level taxation through the imposition of state income, franchise or other forms of taxation.
For example, we will be subject to a new entity-level state tax on the portion of our income that
is generated in Texas beginning for tax reports due on or after January 1, 2008. Specifically, the
Texas margin tax will be imposed at a maximum effective rate of 0.7% of our gross income that is
apportioned to Texas. If any additional states were to impose a tax upon us as an entity, the cash
available for distribution to our unitholders would be reduced.
Our unitholders may be required to pay taxes on their share of our income even if they do not
receive any cash distributions from us.
Our unitholders are required to pay federal income taxes and, in some cases, state and local
income taxes on their share of our taxable income, whether or not they receive cash distributions
from us. Our unitholders may not receive cash distributions from us equal to their share of our
taxable income or even equal to the actual tax liability that results from their share of our
taxable income.
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A successful IRS contest of the federal income tax positions we take may adversely affect the
market for our units, and the costs of any contest will reduce our cash available for distribution
to our unitholders.
We have not requested a ruling from the IRS with respect to our treatment as a partnership for
federal income tax purposes or any other matter that affects us. The IRS may adopt positions that
differ from the positions we take. It may be necessary to resort to administrative or court
proceedings to sustain some or all of the positions we take and a court may disagree with some or
all of those positions. Any contest with the IRS may materially and adversely impact the market for
our units and the price at which they trade. In addition, our costs of any contest with the IRS
will result in a reduction in cash available for distribution to our unitholders and thus will be
borne indirectly by our unitholders.
Tax-exempt entities and foreign persons face unique tax issues from owning units that may result in
adverse tax consequences to them.
Investment in units by tax-exempt entities, including employee benefit plans and individual
retirement accounts (known as IRAs) and non-U.S. persons raises issues unique to them. For example,
virtually all of our income allocated to organizations exempt from federal income tax, including
individual retirement accounts and other retirement plans, will be unrelated business taxable
income and will be taxable to such a unitholder. Distributions to non-U.S. persons will be reduced
by withholding taxes imposed at the highest effective applicable tax rate, and non-U.S. persons
will be required to file United States federal income tax returns and pay tax on their share of our
taxable income.
Tax gain or loss on the disposition of our units could be more or less than expected because prior
distributions in excess of allocations of income will decrease our unitholders tax basis in their
units.
If our unitholders sell any of their units, they will recognize gain or loss equal to the
difference between the amount realized and their tax basis in those units. Prior distributions to
our unitholders in excess of the total net taxable income they were allocated for a unit, which
decreased their tax basis in that unit, will, in effect, become taxable income to our unitholders
if the unit is sold at a price greater than their tax basis in that unit, even if the price our
unitholders receive is less than their original cost. A substantial portion of the amount realized,
whether or not representing gain, may be ordinary income to our unitholders. In addition, if our
unitholders sell units, our unitholders may incur a tax liability in excess of the amount of cash
our unitholders receive from the sale.
We will treat each purchaser of our units as having the same tax benefits without regard to the
units purchased. The IRS may challenge this treatment, which could adversely affect the value of
the units.
Because we cannot match transferors and transferees of units, we will adopt depreciation and
amortization positions that may not conform with all aspects of existing Treasury regulations. A
successful IRS challenge to those positions could adversely affect the amount of tax benefits
available to our unitholders. It also could affect the timing of these tax benefits or the amount
of gain on the sale of units and could have a negative impact on the value of our units or result
in audits of and adjustments to our unitholders' tax returns.
Our unitholders may be subject to state and local taxes and return filing requirements in states
where they do not live as a result of investing in our units.
In addition to federal income taxes, our unitholders will likely be subject to other taxes,
including state and local taxes, unincorporated business taxes and estate, inheritance or
intangible taxes that are imposed by the various jurisdictions in which we do business or own
property now or in the future, even if they do not reside in any of those jurisdictions. Our
unitholders will likely be required to file foreign, state and local income tax returns and pay
state and local income taxes in some or all of these jurisdictions. Further, our unitholders may be
subject to penalties for failure to comply with those requirements. We currently do business and
own assets in Texas, New Mexico, Oklahoma and Mississippi. As we make acquisitions or expand our
business, we may do business or own assets in other states in the future. It is the responsibility
of each unitholder to file all United States federal, foreign, state and local tax returns that may
be required of such unitholder. Our counsel has not rendered an opinion on the state or local tax
consequences of an investment in the units.
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We will be considered to have terminated for tax purposes due to a sale or exchange of 50% or more
of our interests within a twelve-month period.
We will be considered to have terminated for tax purposes if there is a sale or exchange of
50% or more of the total interests in our capital and profits within a twelve-month period. A
constructive termination results in the closing of our taxable year for all unitholders and in the
case of a unitholder reporting on a taxable year other than a fiscal year ending December 31, may
result in more than twelve months of our taxable income or loss being includable in his taxable
income for the year of termination. A constructive termination occurring on a date other than
December 31 will result in us filing two tax returns (and unitholders receiving two Schedule K-1s)
for one fiscal year and the cost of the preparation of these returns will be borne by all
unitholders.
CAUTIONARY STATEMENT
REGARDING FORWARD-LOOKING INFORMATION
This document contains forward-looking statements that are subject to a number of risks and
uncertainties, many of which are beyond our control, which may include statements about our:
•
business strategy;
•
financial strategy;
•
drilling locations;
•
oil and natural gas reserves;
•
technology;
•
realized oil and natural gas prices;
•
production volumes;
•
lease operating expenses, general and administrative costs and finding and development costs;
•
future operating results; and
•
plans, objectives, expectations and intentions.
All of these types of statements, other than statements of historical fact included in this
document, are forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may," "could," "should," "expect," "plan," "project," "intend,"
"anticipate," "believe," "estimate," "predict," "potential," "pursue," "target," "continue," the
negative of such terms or other comparable terminology.
The forward-looking statements contained in this document are largely based on our
expectations, which reflect estimates and assumptions made by our management. These estimates and
assumptions reflect our best judgment based on currently known market conditions and other factors.
Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain
and involve a number of risks and uncertainties that are beyond our control. In addition,
management's assumptions about future events may prove to be inaccurate. All readers are cautioned
that the forward-looking statements contained in this document are not guarantees of future
performance, and we cannot assure any reader that such statements will be realized or the
forward-looking events and circumstances will occur. Actual results may differ materially from
those anticipated or implied in the forward-looking statements due to factors described in under
"Risk Factors". The forward-looking statements in this document speak only as of the date of this
document; we disclaim any obligation to update these statements unless required by securities law,
and we caution you not to rely on them unduly. These cautionary statements qualify all
forward-looking statements attributable to us or persons acting on our behalf.
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LEGACY RESERVES LP
We are an independent oil and natural gas limited partnership headquartered in Midland, Texas,
and are focused on the acquisition and exploitation of oil and natural gas properties primarily
located in the Permian Basin of West Texas and southeast New Mexico. 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 an initial public offering of 6,900,000 units
representing limited partner interests at an initial public offering price of $19.00 per unit. Net
proceeds to the partnership after underwriting discounts and estimated offering expenses were
approximately $120 million, all of which were used to repay all indebtedness outstanding under the
partnership's credit facility and for general partnership purposes.
Our primary business objective is to generate stable cash flows allowing us to make cash
distributions to our unitholders and to increase quarterly cash distributions per unit over time
through a combination of acquisitions of new and exploitation of our existing oil and natural gas
properties.
We have grown primarily through two activities: the acquisition of producing oil and natural
gas properties and the exploitation of proved properties as opposed to higher risk exploration of
unproved properties.
Our oil and natural gas production and reserve data as of December 31, 2006 are as follows:
•
we had proved reserves of approximately 18.8 MMBoe, of which 71% were oil and 79% were
classified as proved developed producing, 5% were proved developed non-producing, and 16%
were proved undeveloped;
•
our proved reserves had a standardized measure of $240.6 million; and
•
our proved reserves to production ratio was approximately 14 years based on the average
daily net production of 3,625 Boe/d for the three months ended December 31, 2006.
Our reserves are located primarily in the Permian Basin, one of the largest and most prolific
oil and natural gas producing basins in the United States. The Permian Basin extends over 100,000
square miles in West Texas and southeast New Mexico and has produced over 24 billion Bbls of oil
since its discovery in 1921. The Permian Basin is characterized by oil and natural gas fields with
long production histories and multiple producing formations. Our producing properties in the
Permian Basin are mature fields with established decline curves.
Our principal executive offices are located at 303 W. Wall, Suite 1400, Midland, Texas 79701,
and our telephone number is (432) 689‑5200. Information on our website or any other website is not
incorporated into this prospectus by reference and does not constitute a part of this prospectus.
USE OF PROCEEDS
The units offered by this prospectus are being registered for the account of the selling
unitholders identified in this prospectus under the caption "Selling Unitholders." We will not
receive any proceeds from the sale of the units by the selling unitholders.
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SELLING UNITHOLDERS
This prospectus relates to offers and sales by the selling unitholders of units acquired under
the Legacy Reserves LP Long-Term Incentive Plan. As noted in the table below, one of the selling
unitholders is our Executive Vice President, Chief Accounting Officer and Controller.
As the selling unitholders may sell all or some part of the units that they hold under this
prospectus and this offering is not being underwritten on a firm commitment basis, we are unable to
estimate the amount of units that will be held by the selling unitholders upon termination of this
offering. Our units offered by this prospectus may be offered from time to time, in whole or in part, by the persons named below or by their
transferees, as to whom applicable information will, to the extent required, be set forth in a
prospectus supplement. There can be no assurance that the selling unitholders will offer or sell
any of their units registered in this offering.
The
following table sets forth information as of July 12, 2007 regarding the
beneficial ownership of our units by the selling unitholders prior to this offering, the units to
be offered by the selling unitholders in this offering and the beneficial ownership of our units by
the selling unitholders after this offering. As of July 12,
2007, there were 26,066,596 units outstanding.
Except under applicable community property laws or as otherwise indicated in the footnotes to
the table below, the persons named in the table have sole voting and investment power with respect
to all units beneficially owned. The address of the selling unitholders is c/o Legacy Reserves LP,
303 W. Wall, Suite 1400, Midland, Texas 79701.
Units Beneficially Owned
Units Beneficially Owned
Prior to the Offering(a)
After the Offering (a)(b)
Selling
Number
Percent of Units
Units
Number
Percent of Units
Unitholder
of Units
Outstanding
to be Offered
of Units
Outstanding
William M. Morris
35,077
(c)
*
35,077
(c)
0
*
Michael Hargesheimer
17,539
(d)
*
17,539
(d)
0
*
David Hartman
25,860
(e)(f)
*
12,500
(f)
13,360
(e)
*
*
Percentage of units beneficially owned is less than 1%.
(a)
The amounts and percentages of units beneficially owned are reported on the basis of
regulations of the Commission governing the determination of beneficial ownership of securities.
Under the rules of the Commission, a person is deemed to be a "beneficial owner" of a security if
that person has or shares "voting power," which includes the power to vote or to direct the
voting of such security, or "investment power," which includes the power to dispose of or to
direct the disposition of such security. A person is also deemed to be a beneficial owner of
any securities of which that person has a right to acquire beneficial ownership within 60
days, including through the exercise of options or warrants. Under these rules, more than one
person may be deemed a beneficial owner of the same securities and a person may be deemed a
beneficial owner of securities as to which he has no economic interest.
(b)
Assumes that all units that may be offered are sold.
(c)
Includes 35,077 restricted units Mr. Morris was granted on March 15, 2006, 23,385 of which
remain subject to vesting.
(d)
Includes 17,539 restricted units Mr. Hargesheimer was
granted on March 15, 2006, 11,693 of
which remain subject to vesting.
(e)
Includes 13,360 units that may be acquired upon the exercise of vested options.
(f)
Includes 12,500 restricted units Mr. Hartman was granted on May 5, 2006, 10,000 of which
remain subject to vesting.
PLAN OF DISTRIBUTION
We are registering the units covered by this prospectus for the selling unitholders listed in
the table set forth under the caption "Selling Unitholders." As used in this prospectus, the term
"selling unitholders" includes the selling unitholders named in the table above and any of their
permitted donees, pledges, transferees, successors-in-interest or others who may later hold such
selling unitholder's interests in the units covered by this prospectus and are entitled to resell
the units using this prospectus. We have registered the selling unitholders' units for resale to
provide the selling unitholders with freely tradeable units. However, resales pursuant to this
prospectus must still comply with the limitation on amount of securities sold specified in Rule 144
of the Securities Act. Registration of the selling unitholders' units does not necessarily mean
that the selling stockholders will offer or sell any of their units. We will not receive any
proceeds from the offering or sale of the selling unitholders' units.
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The selling unitholders may sell the units being offered by this prospectus in one or more of
the following ways at various times, which may include block transactions or crosses:
•
underwriters for resale to the public or to institutional investors;
•
directly to the public or institutional investors; or
•
through brokers, dealers or agents to the public or to institutional investors.
The selling
unitholders will act independently of us in making decisions with respect to the
timing, manner and size of each sale. We have advised the selling unitholders that the
anti-manipulative rules of Regulation M under the Securities Exchange Act of 1934, as amended, may
apply to sales in the market and have informed them of the possible need for delivery of copies of
this prospectus. The selling unitholders may sell the units on The NASDAQ Global Select Market or any
other exchange or automated quotation system on which our units may be listed in the future, in
negotiated transactions or through a combination of these methods. Those sales may be made at fixed
prices, at market prices prevailing at the time of sale, at prices related to such prevailing
market prices or at negotiated prices. If underwriters are used in the sale, the units will be
acquired by the underwriters for their own account and may be resold at various times in one or
more transactions, including negotiated transactions, at a fixed public offering price or prices,
which may be changed, at market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. We are paying the expenses incurred in
registering the units, but all selling and other expenses incurred by the selling unitholders will
be borne by the selling unitholders. A distribution of the units by the selling unitholders may
also be effected through the issuance by the selling unitholders or others of derivative
securities, including warrants, exchangeable securities, forward delivery contracts and the writing
of put or call options, or a combination of any of those derivative securities.
In addition, the selling unitholders may sell some or all of the units covered by this
prospectus through:
•
block trades in which a broker-dealer will attempt to sell as agent, but may position or
resell a portion of the block, as principal, in order to facilitate the transaction;
•
purchases by a broker-dealer, as principal, and resale by the broker-dealer for its account;
•
ordinary brokerage transactions and transactions in which a broker solicits purchasers; or
•
privately negotiated transactions.
When selling the units, the selling unitholders may enter into hedging transactions with
broker-dealers or other financial institutions. For example, the selling unitholders may:
•
enter into transactions involving short sales of the units by broker-dealers or other financial institutions;
•
sell units short themselves and redeliver such units to close out their short positions;
•
enter into options or other types of transactions that require the selling unitholders
to deliver units to a broker-dealer or other financial institution, who will then resell or
transfer the units under this prospectus (as supplemented or amended to reflect the
transaction); or
•
loan or pledge the units to a broker-dealer or other financial institution, who may sell
the loaned units or, in the event of default, sell the pledged units.
Broker-dealers engaged in connection with the sale of units covered by this prospectus may
receive compensation in the form of discounts, concessions or commissions from the selling
unitholders or purchasers of the units for whom those broker-dealers may act as agents or to whom
they sell as principal, or both. The compensation of a particular broker-dealer may be less than or
in excess of customary commissions. Broker-dealers engaged by the selling unitholders may allow
other broker-dealers to participate in resales. The selling unitholders and any
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broker-dealers or agents involved in the sale or resale of the units may be deemed to be
"underwriters" within the meaning of the
Section 2(a)(11) of the Securities Act. In addition, the
commissions, discounts or concessions paid to any such broker-dealers or agents in connection with
the sale or resale of the units may be deemed to be underwriting commissions or discounts under the
Securities Act.
In addition to selling units under this prospectus, the selling unitholders may:
•
transfer units in other ways not involving market makers or established trading markets,
including directly by gift, distribution, or other transfer;
•
sell units pursuant to Rule 144 under the Securities Act rather than under this
prospectus, if the transaction meets the requirements of Rule 144; or
•
sell units by any other legally available means.
We are not aware of any agreements, arrangements or understandings between the selling
unitholders and any brokers, dealers, agents or underwriters regarding the sale of units by the
selling unitholders.
Upon our being notified by the selling unitholders that any material arrangement has been
entered into with an underwriter, broker-dealer or agent for the sale of units through a block
trade, special offering, exchange distribution or secondary distribution, we will file a supplement
to this prospectus, if one is required, under Rule 424(b) under the Securities Act. That
supplement, if required, will disclose to the extent applicable:
•
the name of the selling unitholders and of any participating underwriter, broker-dealer or agent;
•
the number of units involved;
•
the price at which those units were sold;
•
the commissions paid or discounts or concessions allowed; and
•
other facts material to the transaction.
In addition, if required by the Securities Act, we will file a supplement to this prospectus
upon being notified by the selling unitholders that any successor-in-interest that is entitled to
sell units using this prospectus intends to sell more than 500 units.
LEGAL MATTERS
Andrews
Kurth LLP, Houston, Texas will pass upon the validity of the units offered by this prospectus.
EXPERTS
The
financial statements of Legacy Reserves LP, TSF
Properties, Ameristate Properties and Binger Properties,
incorporated by reference in this Prospectus have been audited by BDO
Seidman, LLP, an independent registered public accounting firm,
to the extent and for the periods set forth in their reports incorporated herein by reference, and
are incorporated herein in reliance upon such reports given upon the authority of said firm as experts in
auditing and accounting.
Information included in this prospectus regarding our estimated quantities of oil and natural
gas reserves was prepared by LaRoche Petroleum Consultants, Ltd., independent petroleum engineers,
geologists and geophysicists, as stated in their reserve report with respect thereto and is
included in reliance upon the authority of said firm as experts with respect to the matters covered
by their report and the giving of their report.
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INFORMATION INCORPORATED BY REFERENCE
The following documents and information previously filed by us with the Commission are incorporated
by reference in this prospectus:
(1) The Partnership's annual report on Form 10-K for the year ended December 31, 2006, as
filed with the Commission on March 29, 2007.
(2) The Partnership's quarterly report on Form 10-Q for the three months ended March 31, 2007,
as filed with the Commission on May 14, 2007.
(3) The current reports on Form 8-K as filed by the Partnership with the Commission (File No.
001-33249) on January 18, 2007 (except for Item 7.01 thereof and the related exhibit), March 20,
2007, March 21, 2007 (except for Item 7.01 thereof and the related exhibit), March 28, 2007, April
3, 2007, April 19, 2007, May 4, 2007, May 8, 2007
(containing Item 1.01), May 22, 2007, June 4, 2007,
June 5, 2007 (containing Item 2.01), June 18, 2007,
and June 29, 2007.
(4) The
current reports on Form 8-K/A as filed by the Partnership with the Commission (File No.
001-33249) on June 29, 2007.
(5) The
description of the Partnership's units, as set forth in the Partnership's Registration
Statement on Form 8-A, as filed with the Commission on January 10, 2007, and any amendment or report
subsequently filed for the purpose of updating such description.
All documents filed with the Commission by the Partnership pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (excluding any
information furnished pursuant to Item 2.02 and Item 7.01 on any current report on Form 8-K),
subsequent to the date of this prospectus and prior to the termination of the offering relating to
this prospectus shall be deemed to be incorporated by reference in this prospectus and to be a part
of this prospectus from the date such documents are filed. Any statement contained in this
prospectus or in a document incorporated or deemed to be incorporated in this prospectus by
reference shall be deemed to be modified or superseded for purposes of this prospectus to the
extent that a statement contained in this prospectus or in any subsequently filed document which
also is, or is deemed to be, incorporated by reference in this prospectus modifies or supersedes
such statement. Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this prospectus.
Documents incorporated by reference in this prospectus are available from us without charge,
excluding any exhibits to those documents, unless the exhibit is specifically incorporated by
reference in those documents. You may request a copy of documents incorporated by reference in this
prospectus by contacting us in writing or by telephone at our principal executive offices:
Legacy Reserves LP
Attention: Investor Relations
303 W. Wall, Suite 1400
Midland, Texas 79701
Telephone: (432) 689-5200
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Commission a registration statement on Form S-8, of which this prospectus is a
part, under the Securities Act with respect to the units offered by this prospectus. The prospectus
does not contain all of the information included in the registration statement or in the exhibits
to the registration statement. Statements contained in this prospectus concerning the provisions of
any document are not necessarily complete. You should refer to the copies of these documents filed
as exhibits to the registration statement or otherwise filed by us with the Commission for a more complete
understanding of the matter involved. Each statement concerning these documents is qualified in its
entirety by that reference.
We are also subject to the informational requirements of the Exchange Act of 1934. In
accordance with the Exchange Act, we file periodic reports, proxy and information statements and
other information with the Commission. The registration statement on Form S-8, of which this prospectus is
a part, including the attached exhibits and schedules
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thereto, and any other information that we may file with the Commission may be inspected and copied
at the public reference room maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549.
Copies of the material may also be obtained from the Commission at prescribed rates by writing to the
public reference room maintained by the Commission at 100 F Street, N.E., Washington, D.C. 20549. You may
obtain information on the operation of the public reference room by calling the Commission at
1-800-SEC-0330. The Commission maintains a web site on the Internet at http://www.sec.gov. that contains
reports, proxy and information statements and other information regarding issuers that file
electronically with the Commission. Our registration statement, of which this prospectus constitutes a
part, can be downloaded from the Commission's website.
We intend to furnish our unitholders annual reports containing our audited financial
statements and furnish or make available quarterly reports containing our unaudited interim
financial information for the first three fiscal quarters of each of our fiscal years.
DISCLOSURE OF COMMISSION POSITION ON
INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
We will generally indemnify officers, directors and affiliates of our general partner to the
fullest extent permitted by the law against all losses, claims, damages or similar events as set out more fully by Section
7.7 and Section 7.8 of our Amended and Restated Agreement of Limited Partnership, which is
incorporated herein by reference. Subject to any terms, conditions or restrictions set forth
in the partnership agreement, Section 17-108 of the Delaware Revised Uniform Limited Partnership
Act empowers a Delaware limited partnership to indemnify and hold harmless any partner or other
persons from and against all claims and demands whatsoever.
We have obtained directors' and officers' insurance to cover the directors and officers of our
general partner and some of our employees for certain liabilities.
To the extent that the indemnification provisions of our partnership agreement purport to
include indemnification for liabilities arising under the Securities Act, in the opinion of the
Commission, such indemnification is contrary to public policy and is therefore unenforceable.
EXEMPTION FROM REGISTRATION
The
Units that may be reoffered or resold by the selling unitholders pursuant to this
prospectus were issued to the selling unitholders pursuant to the Legacy Reserves LP Long-Term
Incentive Plan and such issuances were exempt from the registration requirements of the Securities
Act pursuant to Rule 701.
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PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
The Partnership incorporates by reference in this registration statement the following
documents filed with the Commission:
(1)
The Partnership's annual report on Form 10-K for the year ended December 31,
2006, as filed with the Commission on March 29, 2007.
(2)
The Partnership's quarterly report on Form 10-Q for
the three months ended March 31, 2007, as filed with the Commission on
May 14, 2007.
(3)
The current reports on Form 8-K as filed with the Commission
(File No. 001-33249) on January 18, 2007 (except for Item 7.01 thereof and the related
exhibit), March 20, 2007, March 21, 2007 (except for Item 7.01 thereof and the related
exhibit), March 28, 2007, April 3, 2007, April 19,
2007, May 4, 2007, May 8, 2007 (containing Item 1.01),
May 22, 2007, June 4, 2007,
June 5, 2007 (containing Item 2.01), June 18, 2007,
and June 29, 2007.
(4)
The
current reports on Form 8-K/A as filed with the Commission (File No.
001-33249) on June 29, 2007.
(5)
The description of the Partnership's units, as set forth in the Partnership's
Registration Statement on Form 8-A, as filed with the Commission on January 10, 2007, and any
amendment or report subsequently filed for the purpose of updating such description.
All documents filed with the Commission by the Partnership pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (excluding any
information furnished pursuant to Item 2.02 and Item 7.01 on any current report on Form 8-K),
subsequent to the date of this registration statement and prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by reference herein and to be
a part hereof from the date of filing of such documents. Any statement contained in this
registration statement or in a document incorporated or deemed to be incorporated herein by
reference shall be deemed to be modified or superseded for purposes of this registration statement
to the extent that a statement contained herein or in any subsequently filed document which also
is, or is deemed to be, incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this registration statement.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
Section 17-108 of the Delaware Revised Uniform Limited Partnership Act empowers a Delaware
limited partnership to indemnify and hold harmless any partner or other person from and against any
and all claims and demands whatsoever. Section 7.7 of the Amended and Restated Agreement of
Limited Partnership (the "Partnership Agreement") of the Partnership provides that to the fullest
extent permitted by law but subject to the limitations expressly provided in the Partnership
Agreement, (a) Legacy Reserves GP, LLC (the "General Partner"),
II-1
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(b) any former general partner (a "Departing General Partner"), (c) any individual, corporation,
firm, limited liability company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity (collectively, a
"Person") who is or was an affiliate of the General Partner or any Departing General Partner, (d)
any officer of the Partnership or a subsidiary of the Partnership, (e) any Person who is or was a
member, partner, director, officer, fiduciary or trustee of the General Partner, a Departing
General Partner or any affiliate thereof, (f) any Person who is or was serving at the request of
the General Partner or any Departing General Partner or any affiliate of the General Partner or any
Departing General Partner as an officer, director, member, partner, fiduciary or trustee of another
Person; provided that that Person shall not be included by reason of providing, on a
fee-for-services basis, trustee, fiduciary, or custodial services, and (g) any Person the General
Partner designates as an "Indemnitee" for purposes of the Partnership Agreement (collectively the
"Indemnitees"), shall be indemnified and held harmless by the Partnership from and against any and
all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and
expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and
all claims, demands, actions, suits or proceedings, whether civil, criminal, administrative or
investigative, in which any Indemnitee may be involved, or is threatened to be involved, as a party
or otherwise, by reason of its status as an Indemnitee;
provided
, that the Indemnitee shall not be
indemnified and held harmless if there has been a final and non-appealable judgment entered by a
court of competent jurisdiction determining that, in respect of the matter for which the Indemnitee
is seeking indemnification pursuant to Section 7.7 of the Partnership Agreement, the Indemnitee
acted in bad faith or engaged in fraud, willful misconduct or, in the case of a criminal matter,
acted with knowledge that the Indemnitee's conduct was unlawful;
provided
, further, no
indemnification pursuant to Section 7.7 of the Partnership Agreement shall be available to the
General Partner or its affiliates (other than the Partnership or any of its subsidiaries) with
respect to its or their obligations incurred pursuant to the Purchase Agreement, the Omnibus
Agreement or the Contribution Agreement (other than obligations incurred by the General Partner on
behalf of the Partnership). Any indemnification pursuant to Section 7.7 of the Partnership
Agreement shall be made only out of the assets of the Partnership, it being agreed that the General
Partner shall not be personally liable for such indemnification and shall have no obligation to
contribute or loan any monies or property to the Partnership to enable it to effectuate such
indemnification.
Section 7.7(b) of the Partnership Agreement also states that to the fullest extent permitted
by law, expenses (including legal fees and expenses) incurred by an Indemnitee who is indemnified
pursuant to Section 7.7(a) of the Partnership Agreement in defending any claim, demand, action,
suit or proceeding shall, from time to time, be advanced by the Partnership prior to a
determination that the Indemnitee is not entitled to be indemnified upon receipt by the Partnership
of any undertaking by or on behalf of the Indemnitee to repay such amount if it shall be determined
that the Indemnitee is not entitled to be indemnified as authorized in Section 7.7 of the
Partnership Agreement.
Section 7.8(a) of the Partnership Agreement provides that no Indemnitee shall be liable for
monetary damages to the Partnership, the limited partners of the Partnership or any other Persons
who have acquired interests in units representing limited partner interests in the Partnership or
any other class or series of equity interest of the Partnership (but excluding any options, rights,
warrants and appreciation rights relating to an equity interest in the Partnership), for losses
sustained or liabilities incurred as a result of any act or omission of an Indemnitee unless there
has been a final and non-appealable judgment entered by a court of competent jurisdiction
determining that, in respect of the matter in question, the Indemnitee acted in bad faith or
engaged in fraud, willful misconduct or, in the case of a criminal matter, acted with knowledge
that the Indemnitee's conduct was criminal.
The Underwriting
Agreement entered into by the Partnership in connection with its initial
public offering of units provides for the indemnification of the directors and officers of
the General Partner in certain circumstances by the underwriters.
In addition, the Partnership Agreement provides that the Partnership may purchase and maintain
(or reimburse the General Partner or its affiliates for the cost of) insurance, on behalf of the
General Partner, its affiliates and such other Persons as the General Partner shall determine,
which insurance may include directors' and officers' liability insurance policies for the directors
and officers of the General Partner.
Reference is made to
Item 9 for the Partnership's undertakings with respect to indemnification
for liabilities arising under the Securities Act.
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Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
Exhibit
Number
Description
4.1
Amended and Restated Limited Partnership Agreement of Legacy Reserves LP
(Incorporated by reference to Legacy Reserves LP's Registration Statement on Form S-1
(File No. 333-134056) filed May 12, 2006, included as Appendix A to the Prospectus and
including specimen unit certificate for the units).
4.2
Amended and Restated Limited Liability Company Agreement of Legacy Reserves GP,
LLC (Incorporated by reference to Legacy Reserves LP's Registration Statement on Form
S-1 (File No. 333-134056) filed May 12, 2006, Exhibit 3.4).
4.3
Legacy Reserves, LP Long-Term Incentive Plan (Incorporated by reference to
Legacy Reserves LP's Registration Statement on Form S-1 (File No. 333-134056) filed May
12, 2006, Exhibit 10.5).
*5.1
Opinion of Andrews Kurth LLP with respect to legality of the securities.
*23.1
Consent of BDO Seidman, LLP.
*23.2
Consent of LaRoche Petroleum Consultants, Ltd.
*23.3
Consent of Andrews Kurth LLP (included as part of Exhibit 5.1).
*
Filed herewith.
Item 9. Undertakings
(a)
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective
amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date
of the registration statement (or the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in the form of prospectus filed with
the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan of distribution not
previously disclosed in the registration statement or any material change to such
information in the registration statement;
Provided, however,
that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
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(2) That, for the purpose of determining any liability under the Securities Act of 1933, each
such post-effective amendment shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities
being registered which remain unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability
under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange
Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers and controlling persons of the registrant pursuant to the
provisions described under Item 6 above, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment of the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant in the successful
defense of any action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Act and will be governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant
certifies that it has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Midland,
State of Texas, on
July 13, 2007.
LEGACY RESERVES LP
By:
LEGACY RESERVES GP, LLC,
its general partner
By:
/s/ Steven H. Pruett
Steven H. Pruett
President, Chief Financial Officer and Secretary
POWER OF ATTORNEY
Each person whose signature appears below appoints Cary D. Brown and Steven H. Pruett, and
each of them, any of whom may act without the joinder of the other, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments thereto) to this Registration Statement and any Registration Statement
(including any amendment thereto) for this offering that is to be effective upon filing pursuant to
Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with all exhibits
thereto, and all other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or would do in person, hereby ratifying and confirming all that said
attorney-in-fact and agents or any of them of their or his substitute and substitutes, may lawfully
do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has
been signed by the following persons in the capacities and on the dates indicated.
Signature
Title
Date
/s/ Cary D. Brown
Cary D. Brown
Chief Executive Officer and Director
(Principal Executive Officer)
July 13, 2007
/s/ Steven H. Pruett
Steven H. Pruett
President, Chief Financial Officer
and Secretary (Principal Financial
Officer)
July 13, 2007
/s/ William M. Morris
William M. Morris
Vice President, Chief Accounting
Officer and Controller (Principal
Accounting Officer)
July 13, 2007
/s/ Kyle A. McGraw
Kyle A. McGraw
Executive Vice President and Director
July 13, 2007
/s/ Dale A. Brown
Dale A. Brown
Director
July 13, 2007
/s/ G. Larry Lawrence
G. Larry Lawrence
Director
July 13, 2007
/s/ William D. Sullivan
William D. Sullivan
Director
July 13, 2007
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Signature
Title
Date
/s/ S. Wil VanLoh, Jr.
S. Wil VanLoh, Jr.
Director
July 13, 2007
/s/ Kyle D. Vann
Kyle D. Vann
Director
July 13, 2007
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EXHIBIT INDEX
Exhibit
Number
Description
4.1
Amended and Restated Limited Partnership Agreement of Legacy Reserves LP
(Incorporated by reference to Legacy Reserves LP's Registration Statement on Form S-1
(File No. 333-134056) filed May 12, 2006, included as Appendix A to the Prospectus and
including specimen unit certificate for the units).
4.2
Amended and Restated Limited Liability Company Agreement of Legacy Reserves GP,
LLC (Incorporated by reference to Legacy Reserves LP's Registration Statement on Form
S-1 (File No. 333-134056) filed May 12, 2006, Exhibit 3.4).
4.3
Legacy Reserves, LP Long-Term Incentive Plan (Incorporated by reference to
Legacy Reserves LP's Registration Statement on Form S-1 (File No. 333-134056) filed May
12, 2006, Exhibit 10.5).
*5.1
Opinion of Andrews Kurth LLP with respect to legality of the securities.
*23.1
Consent of BDO Seidman, LLP.
*23.2
Consent of LaRoche Petroleum Consultants, Ltd.
*23.3
Consent of Andrews Kurth LLP (included as part of Exhibit 5.1).
*
Filed herewith.
II-7