Legacy Reserves LP (LGCY)

Impairment

     As previously discussed, the combination of low year-end prices and increased production and capital costs reduced the calculated economic life of properties. The reduction in economic life and lower net revenues associated with lower hydrocarbon prices was the primary cause of impairment on 101 of our 239 fields, which amounted to $76.9 million for the year ended December 31, 2008, an increase from $3.2 million for the year ended December 31, 2007. Legacy compares the net capitalized costs of proved oil and natural gas properties to the estimated undiscounted future net cash flows using management’s expectations of future oil and natural gas prices. These future price scenarios reflect our estimation of future price volatility. If net capitalized costs exceed estimated undiscounted future net cash flows, the net capitalized costs are written down, or impaired, so that net capitalized costs equal the present value, discounted at 10%, of future net cash flows using management’s expectations of future oil and natural gas prices.

Impairment

     As previously discussed, the combination of low year-end prices and increased production and capital costs reduced the calculated economic life of properties. The reduction in economic life and lower net revenues associated with lower hydrocarbon prices was the primary cause of impairment on 101 of our 239 fields, which amounted to $76.9 million for the year ended December 31, 2008, an increase from $3.2 million for the year ended December 31, 2007. Legacy compares the net capitalized costs of proved oil and natural gas properties to the estimated undiscounted future net cash flows using management’s expectations of future oil and natural gas prices. These future price scenarios reflect our estimation of future price volatility. If net capitalized costs exceed estimated undiscounted future net cash flows, the net capitalized costs are written down, or impaired, so that net capitalized costs equal the present value, discounted at 10%, of future net cash flows using management’s expectations of future oil and natural gas prices.

Impairment

     As previously discussed, the combination of low year-end prices and increased production and capital costs reduced the calculated economic life of properties. The reduction in economic life and lower net revenues associated with lower hydrocarbon prices was the primary cause of impairment on 101 of our 239 fields, which amounted to $76.9 million for the year ended December 31, 2008, an increase from $3.2 million for the year ended December 31, 2007. Legacy compares the net capitalized costs of proved oil and natural gas properties to the estimated undiscounted future net cash flows using management’s expectations of future oil and natural gas prices. These future price scenarios reflect our estimation of future price volatility. If net capitalized costs exceed estimated undiscounted future net cash flows, the net capitalized costs are written down, or impaired, so that net capitalized costs equal the present value, discounted at 10%, of future net cash flows using management’s expectations of future oil and natural gas prices.

Impairment

     As
previously discussed, the combination of low year-end prices and increased
production and capital costs reduced the calculated economic life of properties.
The reduction in economic life and lower net revenues associated with lower
hydrocarbon prices was the primary cause of impairment on 101 of our 239 fields,
which amounted to $76.9 million for the year ended December 31, 2008, an
increase from $3.2 million for the year ended December 31, 2007. Legacy compares
the net capitalized costs of proved oil and natural gas properties to the
estimated undiscounted future net cash flows using management’s expectations of
future oil and natural gas prices. These future price scenarios reflect our
estimation of future price volatility. If net capitalized costs exceed estimated
undiscounted future net cash flows, the net capitalized costs are written down,
or impaired, so that net capitalized costs equal the present value, discounted
at 10%, of future net cash flows using management’s expectations of future oil
and natural gas prices.

Impairment

     As
previously discussed, the combination of low year-end prices and increased
production and capital costs reduced the calculated economic life of properties.
The reduction in economic life and lower net revenues associated with lower
hydrocarbon prices was the primary cause of impairment on 101 of our 239 fields,
which amounted to $76.9 million for the year ended December 31, 2008, an
increase from $3.2 million for the year ended December 31, 2007. Legacy compares
the net capitalized costs of proved oil and natural gas properties to the
estimated undiscounted future net cash flows using management’s expectations of
future oil and natural gas prices. These future price scenarios reflect our
estimation of future price volatility. If net capitalized costs exceed estimated
undiscounted future net cash flows, the net capitalized costs are written down,
or impaired, so that net capitalized costs equal the present value, discounted
at 10%, of future net cash flows using management’s expectations of future oil
and natural gas prices.

Impairment

     As
previously discussed, the combination of low year-end prices and increased
production and capital costs reduced the calculated economic life of properties.
The reduction in economic life and lower net revenues associated with lower
hydrocarbon prices was the primary cause of impairment on 101 of our 239 fields,
which amounted to $76.9 million for the year ended December 31, 2008, an
increase from $3.2 million for the year ended December 31, 2007. Legacy compares
the net capitalized costs of proved oil and natural gas properties to the
estimated undiscounted future net cash flows using management’s expectations of
future oil and natural gas prices. These future price scenarios reflect our
estimation of future price volatility. If net capitalized costs exceed estimated
undiscounted future net cash flows, the net capitalized costs are written down,
or impaired, so that net capitalized costs equal the present value, discounted
at 10%, of future net cash flows using management’s expectations of future oil
and natural gas prices.

Impairment

     As
previously discussed, the combination of low year-end prices and increased
production and capital costs reduced the calculated economic life of properties.
The reduction in economic life and lower net revenues associated with lower
hydrocarbon prices was the primary cause of impairment on 101 of our 239 fields,
which amounted to $76.9 million for the year ended December 31, 2008, an
increase from $3.2 million for the year ended December 31, 2007. Legacy compares
the net capitalized costs of proved oil and natural gas properties to the
estimated undiscounted future net cash flows using management’s expectations of
future oil and natural gas prices. These future price scenarios reflect our
estimation of future price volatility. If net capitalized costs exceed estimated
undiscounted future net cash flows, the net capitalized costs are written down,
or impaired, so that net capitalized costs equal the present value, discounted
at 10%, of future net cash flows using management’s expectations of future oil
and natural gas prices.