##### 



LEGACY RESERVES LP
 UNAUDITED PRO FORMA COMBINED BALANCE SHEET
JUNE 30, 2007
 Pro FormaLegacy
    
    
    Adjustments
    
    
    Pro FormaASSETSCurrent assets:Cash and cash equivalents
    
    $
    5,128,787
    
    
    $
    (19,940,000
    )(r)
    
    $
    2,188,78717,000,000
    (s)Accounts receivable, net:Oil and natural gas
    
    
    9,417,275
    
    
    
    
    
    
    
    9,417,275Joint interest owners
    
    
    5,456,179
    
    
    
    
    
    
    
    5,456,179Affiliated entities and other
    
    
    9,293
    
    
    
    
    
    
    
    9,293Fair value of oil and natural gas swaps
    
    
    572,150
    
    
    
    
    
    
    
    572,150Prepaid expenses and other current assets
    
    
    1,158,450
    
    
    
    
    
    
    
    1,158,450Total current assets
    
    
    21,742,134
    
    
    
    (2,940,000
    )
    
    
    18,802,134Oil and natural gas properties, at cost:Proved oil and natural gas properties, using the
successful efforts method of accounting:
    
    
    377,734,338
    
    
    
    20,164,000
    (r)
    
    
    397,898,338Unproved properties
    
    
    78,025
    
    
    
    
    
    
    
    78,025Accumulated depletion, depreciation and amortization
    
    
    (53,793,719
    )
    
    
    
    
    
    
    (53,793,719
    )324,018,644
    
    
    
    20,164,000
    
    
    
    344,182,644Other property and equipment, net
    
    
    528,566
    
    
    
    
    
    
    
    528,566Fair value of oil and natural gas swaps
    
    
    81,152
    
    
    
    
    
    
    
    81,152Deposit on pending acquisition
    
    
    12,784
    
    
    
    
    
    
    
    12,784Equity method investment
    
    
    83,941
    
    
    
    
    
    
    
    83,941Operating rights
    
    
    6,433,918
    
    
    
    
    
    
    
    6,433,918Other assets, net
    
    
    564,120
    
    
    
    
    
    
    
    564,120$
    353,465,259
    
    
    $
    17,224,000
    
    
    $
    370,689,259
  1




---



##### 



LEGACY RESERVES LP
 UNAUDITED PRO FORMA COMBINED BALANCE SHEET
JUNE 30, 2007
 Pro FormaLegacy
    
    
    Adjustments
    
    
    Pro FormaLIABILITIES AND OWNERS EQUITYCurrent liabilities:Accounts payable
    
    $
    694,060
    
    
    $
    
    
    
    $
    694,060Accrued oil and natural gas liabilities
    
    
    6,672,719
    
    
    
    
    
    
    
    6,672,719Fair value of oil and natural gas swaps
    
    
    2,046,628
    
    
    
    
    
    
    
    2,046,628Asset retirement obligation
    
    
    643,262
    
    
    
    
    
    
    
    643,262Other
    
    
    2,416,702
    
    
    
    
    
    
    
    2,416,702Total current liabilities
    
    
    12,473,371
    
    
    
    
    
    
    
    12,473,371Long-term debt
    
    
    68,000,000
    
    
    
    17,000,000
    (s)
    
    
    85,000,000Asset retirement obligation
    
    
    6,691,354
    
    
    
    224,000
    (r)
    
    
    6,915,354Fair value of oil and natural gas swaps
    
    
    13,054,402
    
    
    
    
    
    
    
    13,054,402Total unitholders equity
    
    
    253,246,132
    
    
    
    
    
    
    
    253,246,132$
    353,465,259
    
    
    $
    17,224,000
    
    
    $
    370,689,259
  2




---



##### 



LEGACY RESERVES LP
 UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 2006
 Formation
    
    
    2006 Property
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    PreviousEntities
    
    
    Acquisitions
    
    
    Binger
    
    
    Ameristate
    
    
    TSF
    
    
    Transaction
    
    
    Previous
    
    
    Raven OBOLegacy
    
    
    Historical
    
    
    Historical
    
    
    Acquisition
    
    
    Acquisition
    
    
    Acquisition
    
    
    Pro Forma
    
    
    Transaction
    
    
    Acquisition
    
    
    Pro FormaHistorical
    
    
    Note 2
    
    
    Note 3
    
    
    Historical
    
    
    Historical
    
    
    Historical
    
    
    Adjustments
    
    
    Pro Forma
    
    
    Historical
    
    
    Adjustments
    
    
    Pro FormaRevenues:Oil sales
    
    $
    45,351,122
    
    
    $
    2,910,059
    
    
    $
    5,107,379
    
    
    $
    8,404,221
    
    
    $
    411,472
    
    
    $
    3,378,849
    
    
    $
    
    
    
    $
    65,563,102
    
    
    $
    4,181,662
    
    
    $
    
    
    
    $
    69,744,764Natural gas sales
    
    
    14,446,193
    
    
    
    829,695
    
    
    
    354,526
    
    
    
    1,883,982
    
    
    
    1,193,736
    
    
    
    1,181,403
    
    
    
    
    
    
    
    19,889,535
    
    
    
    1,363,610
    
    
    
    
    
    
    
    21,253,145Natural gas liquids sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,914,506
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,914,506
    
    
    
    507,721
    
    
    
    
    
    
    
    4,422,227Realized and unrealized loss on oil and natural
gas swaps
    
    
    9,288,470
    
    
    
    (1,304,472
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,983,998
    
    
    
    
    
    
    
    
    
    
    
    7,983,998Total revenues
    
    
    69,085,785
    
    
    
    2,435,282
    
    
    
    5,461,905
    
    
    
    14,202,709
    
    
    
    1,605,208
    
    
    
    4,560,252
    
    
    
    
    
    
    
    97,351,141
    
    
    
    6,052,993
    
    
    
    
    
    
    
    103,404,134Expenses:Oil and natural gas production
    
    
    15,938,276
    
    
    
    820,906
    
    
    
    1,549,329
    
    
    
    3,982,341
    
    
    
    282,689
    
    
    
    245,400
    
    
    
    
    
    
    
    22,818,941
    
    
    
    1,627,765
    
    
    
    
    
    
    
    24,446,706Production and other taxes
    
    
    3,745,793
    
    
    
    291,447
    
    
    
    419,175
    
    
    
    1,163,078
    
    
    
    151,469
    
    
    
    438,595
    
    
    
    
    
    
    
    6,209,557
    
    
    
    433,377
    
    
    
    
    
    
    
    6,642,934General and administrative
    
    
    3,691,018
    
    
    
    292,098
    
    
    
    (394,345
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    317,788
    (e)
    
    
    4,194,552
    
    
    
    
    
    
    
    
    
    
    
    4,194,552226,743
    (e)61,250
    (f)Depletion, depreciation, amortization and accretion
    
    
    18,394,674
    
    
    
    266,126
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,231,584
    (b)
    
    
    26,471,872
    
    
    
    
    
    
    
    1,694,810
    (r)
    
    
    28,166,682407,717
    (c)589,799
    (g)986,478
    (i)2,851,969
    (l)700,322
    (n)1,043,203
    (p)Impairment of long-lived assets
    
    
    16,113,300
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,113,300
    
    
    
    
    
    
    
    
    
    
    
    16,113,300Loss on sale of assets
    
    
    42,370
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,370
    
    
    
    
    
    
    
    
    
    
    
    42,370Total expenses
    
    
    57,925,431
    
    
    
    1,670,577
    
    
    
    1,574,159
    
    
    
    5,145,419
    
    
    
    434,158
    
    
    
    683,995
    
    
    
    8,416,853
    
    
    
    75,850,592
    
    
    
    2,061,142
    
    
    
    1,694,810
    
    
    
    79,606,544Operating income
    
    
    11,160,354
    
    
    
    764,705
    
    
    
    3,887,746
    
    
    
    9,057,290
    
    
    
    1,171,050
    
    
    
    3,876,257
    
    
    
    (8,416,853
    )
    
    
    21,500,549
    
    
    
    3,991,851
    
    
    
    (1,694,810
    )
    
    
    23,797,590Other income (expense):Interest income
    
    
    129,712
    
    
    
    301,380
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (301,380
    )(d)
    
    
    129,712
    
    
    
    
    
    
    
    
    
    
    
    129,712Interest expense
    
    
    (6,644,721
    )
    
    
    (207,905
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (434,070
    )(h)
    
    
    (1,431,851
    )
    
    
    
    
    
    
    (1,168,750
    )(s)
    
    
    (2,600,601
    )(578,760
    )(j)9,580,455
    (k)(1,939,375
    )(m)(346,875
    )(o)(860,600
    )(q)Equity in income (loss) of partnerships
    
    
    (317,788
    )
    
    
    (609,306
    )
    
    
    
    
    
    
    70,540
    
    
    
    
    
    
    
    
    
    
    
    317,788
    (e)
    
    
    70,540
    
    
    
    
    
    
    
    
    
    
    
    70,540226,743
    (e)382,563
    (e)Other
    
    
    29,328
    
    
    
    6,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35,928
    
    
    
    
    
    
    
    
    
    
    
    35,928Net income
    
    $
    4,356,885
    
    
    $
    255,474
    
    
    $
    3,887,746
    
    
    $
    9,127,830
    
    
    $
    1,171,050
    
    
    $
    3,876,257
    
    
    $
    (2,370,364
    )
    
    $
    20,304,878
    
    
    $
    3,991,851
    
    
    $
    (2,863,560
    )
    
    $
    21,433,169Net income per unit basic
    
    $
    0.26
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.83diluted
    
    $
    0.26
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    0.83Shares used in computing net income per unit:basic
    
    
    16,567,287
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,750,229
    (a)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,904,03475,271
    (g)6,900,000
    (k)611,247
    (l)diluted
    
    
    16,568,879
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,905,626
  3




---



##### 



LEGACY RESERVES LP
 UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2007
 PreviousBinger
    
    
    Ameristate
    
    
    TSF
    
    
    Transactions
    
    
    Previous
    
    
    Raven OBOLegacy
    
    
    Acquisition
    
    
    Acquisition
    
    
    Acquisition
    
    
    Pro Forma
    
    
    Transactions
    
    
    Acquisition
    
    
    Pro FormaHistorical
    
    
    Historical
    
    
    Historical
    
    
    Historical
    
    
    Adjustments
    
    
    Pro Forma
    
    
    Historical
    
    
    Adjustments
    
    
    Pro FormaRevenues:Oil sales
    
    $
    30,131,648
    
    
    $
    2,038,092
    
    
    $
    301,823
    
    
    $
    930,101
    
    
    $
    
    
    
    $
    33,401,664
    
    
    $
    1,842,567
    
    
    
    
    
    
    $
    35,244,231Natural gas sales
    
    
    8,535,538
    
    
    
    573,873
    
    
    
    196,596
    
    
    
    397,477
    
    
    
    
    
    
    
    9,703,484
    
    
    
    609,765
    
    
    
    
    
    
    
    10,313,249Natural gas liquids sales
    
    
    
    
    
    
    993,057
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    993,057
    
    
    
    268,917
    
    
    
    
    
    
    
    1,261,974Realized and unrealized loss on oil and
natural gas swaps
    
    
    (13,715,904
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,715,904
    )
    
    
    
    
    
    
    
    
    
    
    (13,715,904
    )Total revenues
    
    
    24,951,282
    
    
    
    3,605,022
    
    
    
    498,419
    
    
    
    1,327,578
    
    
    
    
    
    
    
    30,382,301
    
    
    
    2,721,249
    
    
    
    
    
    
    
    33,103,550Expenses:Oil and natural gas production
    
    
    10,827,679
    
    
    
    1,217,586
    
    
    
    89,361
    
    
    
    110,403
    
    
    
    
    
    
    
    12,245,029
    
    
    
    967,658
    
    
    
    
    
    
    
    13,212,687Production and other taxes
    
    
    2,474,759
    
    
    
    316,242
    
    
    
    43,794
    
    
    
    105,710
    
    
    
    
    
    
    
    2,940,505
    
    
    
    189,245
    
    
    
    
    
    
    
    3,129,750General and administrative
    
    
    4,596,181
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,596,181
    
    
    
    
    
    
    
    
    
    
    
    4,596,181Depletion, depreciation, amortization
and accretion
    
    
    12,105,713
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    674,516
    (l)
    
    
    13,165,722
    
    
    
    
    
    
    
    775,870
    (r)
    
    
    13,941,592166,169
    (n)219,324
    (p)Impairment of long-lived assets
    
    
    279,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    279,700
    
    
    
    
    
    
    
    
    
    
    
    279,700Loss on
disposal of assets
    
    
    231,133
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    231,133
    
    
    
    
    
    
    
    
    
    
    
    231,133Total expenses
    
    
    30,515,165
    
    
    
    1,533,828
    
    
    
    133,155
    
    
    
    216,113
    
    
    
    1,060,009
    
    
    
    33,458,270
    
    
    
    1,156,903
    
    
    
    775,870
    
    
    
    35,391,043Operating income (loss)
    
    
    (5,563,883
    )
    
    
    2,071,194
    
    
    
    365,264
    
    
    
    1,111,465
    
    
    
    (1,060,009
    )
    
    
    (3,075,969
    )
    
    
    1,564,346
    
    
    
    (775,870
    )
    
    
    (2,287,493
    )Other income (expense):Interest income
    
    
    151,158
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    151,158
    
    
    
    
    
    
    
    
    
    
    
    151,158Interest expense
    
    
    (1,518,052
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (565,863
    )(m)
    
    
    (2,543,822
    )
    
    
    
    
    
    
    (584,800
    )(s)
    
    
    (3,128,622
    )(115,667
    )(o)(344,240
    )(q)Equity in income (loss) of partnerships
    
    
    10,910
    
    
    
    12,210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23,120
    
    
    
    
    
    
    
    
    
    
    
    23,120Other
    
    
    1,014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,014
    
    
    
    
    
    
    
    
    
    
    
    1,014Net income (loss)
    
    $
    (6,918,853
    )
    
    $
    2,083,404
    
    
    $
    365,264
    
    
    $
    1,111,465
    
    
    $
    (2,085,779
    )
    
    $
    (5,444,499
    )
    
    $
    1,564,346
    
    
    $
    (1,360,670
    )
    
    $
    (5,240,823
    )Net loss per unit basic and diluted
    
    $
    (0.27
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    (0.20
    )Units used in computing net lossper unit: basic and diluted
    
    
    25,223,638
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    419,337
    (k)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,997,566354,591
    (l)
  4




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
 1. Basis of Presentation:
    
    
    the historical consolidated financial statements of Legacy; and
    
    the preliminary purchase price allocation of oil and natural gas
properties acquired from Raven.
   
    
    the historical consolidated financial statements of Legacy (formerly the
Moriah Group);
    
    the historical combined financial statements of the Brothers Group;
    
    the historical combined financial statements of the Selected Interests
of the Charities Support Foundation Inc. (Foundations);
    
    the historical financial statements of the oil and natural gas
operations of H2K Holdings Ltd. (H2K);
    
    the historical statements of revenues, operating fees and operating
expenses of certain oil and natural gas
 5




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
  properties acquired by Legacy from Henry Holding LP
(South Justis Unit);
    
    the historical statements of revenues and direct operating expenses of
certain oil and natural gas properties acquired by Legacy from Kinder Morgan (collectively
Kinder Morgan);
    
    the historical statements of revenues, direct operating expenses and
equity income of certain oil and natural gas properties and other interests acquired by Legacy
from Nielson (Binger Properties);
    
    the historical statements of revenues and direct operating expenses of
certain oil and natural gas properties acquired by Legacy from Ameristate (Ameristate
Properties);
    
    the historical statements of revenues and direct operating expenses of
certain oil and natural gas properties acquired by Legacy from Fields (TSF Properties);
    
    the historical statements of revenues and direct operating expenses of
certain oil and natural gas properties acquired by Legacy from Raven (Raven OBO Properties);
    
    pro forma adjustments based on assumptions we have deemed appropriate.
    2. Formation Entities Historical
  
    
    the historical combined statement of operations of the Brothers Group;
    
    the historical combined statement of operations of the Selected
Interests of the Charities Support Foundation Inc. (Foundations);
    
    the historical statements of the oil and natural gas operations of H2K
Holdings Ltd. (H2K);
 6




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
  For the period from January 1 through March 14, 2006Brothers
    
    
    Charitable
    
    
    
    
    
    
    FormationGroup
    
    
    Foundations
    
    
    H2K Holdings
    
    
    EntitiesHistorical
    
    
    Historical
    
    
    Historical
    
    
    HistoricalRevenues:Oil sales
    
    $
    2,614,139
    
    
    $
    255,280
    
    
    $
    40,640
    
    
    $
    2,910,059Natural gas sales
    
    
    748,765
    
    
    
    80,930
    
    
    
    
    
    
    
    829,695Realized and
unrealized loss on
oil and natural gas
swaps
    
    
    (1,286,784
    )
    
    
    
    
    
    
    (17,688
    )
    
    
    (1,304,472
    )Total revenues
    
    
    2,076,120
    
    
    
    336,210
    
    
    
    22,952
    
    
    
    2,435,282Expenses:Oil and natural gas
production
    
    
    696,077
    
    
    
    111,484
    
    
    
    13,345
    
    
    
    820,906Production and
other taxes
    
    
    261,143
    
    
    
    27,002
    
    
    
    3,302
    
    
    
    291,447General and
administrative
    
    
    277,241
    
    
    
    11,830
    
    
    
    3,027
    
    
    
    292,098Depletion,
depreciation,
amortization and
accretion
    
    
    200,722
    
    
    
    62,631
    
    
    
    2,773
    
    
    
    266,126Total expenses
    
    
    1,435,183
    
    
    
    212,947
    
    
    
    22,447
    
    
    
    1,670,577Operating income
    
    
    640,937
    
    
    
    123,263
    
    
    
    505
    
    
    
    764,705Other income (expense):Interest income
    
    
    301,380
    
    
    
    
    
    
    
    
    
    
    
    301,380Interest expense
    
    
    (207,905
    )
    
    
    
    
    
    
    
    
    
    
    (207,905
    )Equity in loss of
partnerships
    
    
    (609,306
    )
    
    
    
    
    
    
    
    
    
    
    (609,306
    )Other
    
    
    6,600
    
    
    
    
    
    
    
    
    
    
    
    6,600Net income
    
    $
    131,706
    
    
    $
    123,263
    
    
    $
    505
    
    
    $
    255,474
 3. 2006 Property Acquisitions Historical
  7




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
 
    
    the historical statements of revenues, operating fees and operating
expenses of certain oil and natural gas properties acquired by Legacy from Henry Holding LP
(South Justis Unit);
    
    the historical statements of revenues and direct operating expenses of
certain oil and natural gas properties acquired by Legacy from Kinder Morgan (collectively
Kinder Morgan);
  For the period
    
    
    For the periodfrom January 1
    
    
    from January 1through June 30,
    
    
    through July 31,2006
    
    
    2006
    
    
    2006 PropertySouth Justis
    
    
    Kinder Morgan
    
    
    AcquisitionsHistorical
    
    
    Historical
    
    
    HistoricalRevenues:Oil sales
    
    $
    1,067,065
    
    
    $
    4,040,314
    
    
    $
    5,107,379Natural gas sales
    
    
    246,866
    
    
    
    107,660
    
    
    
    354,526Total revenues
    
    
    1,313,931
    
    
    
    4,147,974
    
    
    
    5,461,905Operating expenses:Oil and natural gas production
    
    
    311,809
    
    
    
    1,237,520
    
    
    
    1,549,329Production and other taxes
    
    
    109,948
    
    
    
    309,227
    
    
    
    419,175General and administrative
    
    
    (394,345
    )
    
    
    
    
    
    
    (394,345
    )Total operating expenses
    
    
    27,412
    
    
    
    1,546,747
    
    
    
    1,574,159Excess of revenue over direct
operating expenses
    
    $
    1,286,519
    
    
    $
    2,601,227
    
    
    $
    3,887,746
 4. Pro Forma Adjustments
    8




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
   Number of unitsMoriah Properties LP
    
    
    7,334,070DAB Resources, Ltd.
    
    
    859,703Moriah Group
    
    
    8,193,773Brothers Group
    
    
    6,200,358H2K Holdings Ltd.
    
    
    83,499MBN Properties LP
    
    
    3,162,438Legacy units
    
    
    600,000Total units issued at Legacy Formation
    
    
    18,240,068
   Number of Units
    
    
    Purchase Priceat $17.00 per unit
    
    
    of Assets AcquiredBrothers Group
    
    
    6,200,358
    
    
    $
    105,406,069H2K Holdings Ltd.
    
    
    83,499
    
    
    
    1,419,483Cash paid to three charitable foundations
    
    
    
    
    
    
    7,682,854Total purchase price before liabilities assumed
    
    
    
    
    
    
    114,508,406Plus:Oil and natural gas swap liabilities assumed
    
    
    
    
    
    
    3,147,152Asset retirement obligations incurred
    
    
    
    
    
    
    1,467,241Less:Office furniture, equipment and vehicles
acquired
    
    
    
    
    
    
    (107,275
    )Total purchase price allocated to oil
and
natural gas properties acquired
    
    
    
    
    
    $
    119,015,524
  9




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
  Number of Units
    
    
    Purchase Price ofat $17.00 per unit
    
    
    Assets AcquiredUnits issued to MBN Properties LP
    
    
    3,162,438
    
    
    $
    53,761,446Cash paid to MBN Properties LP
    
    
    
    
    
    
    65,300,000Total purchase price
before liabilities assumed
    
    
    
    
    
    
    119,061,446Plus:Oil and natural gas swap liabilities assumed
    
    
    
    
    
    
    2,539,625ARO liabilities assumed
    
    
    
    
    
    
    453,913Less:Net book value of other property and equipment on
MBN Properties LP at March 14, 2006
    
    
    
    
    
    
    (39,056
    )122,015,928Less:Net book value of oil and gas assets on
MBN Properties LP at March 14, 2006
    
    
    
    
    
    
    (62,990,390
    )Purchase price in excess of net book value of assets
    
    
    
    
    
    
    59,025,538Less:Share already owned by Moriah via consolidation
of MBN Properties LP
    
    
    46.22
    %
    
    
    (27,281,604
    )Non-controlling interest share to record
    
    
    
    
    
    
    31,743,934Plus:Elimination of deferred financing costs related to
non-controlling interests share of MBN Properties LP
    
    
    
    
    
    
    164,202Reimbursement of Brothers Groups share of MBN
Management LLC losses from inception through
March 14, 2006
    
    
    
    
    
    
    780,239MBN Properties LP purchase price to allocate
to oil and natural gas properties
    
    
    
    
    
    $
    32,688,375Units related to purchase of non-controlling interest
    
    
    1,867,290Units related to interest previously owned by Moriah Group
    
    
    1,295,148Total units issued to MBN Properties LP
    
    
    3,162,438
  10




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
 
  Year EndedDecember 31, 2006Moriah Group  MBN Management LLC
    
    $
    317,788Brothers Group:MBN Properties LP
    
    $
    382,563MBN Management LLC
    
    
    226,743Total Brothers Group
    
    $
    609,306
      11




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
          12




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
          13




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
 5.
Oil, Natural Gas and NGL Reserve Disclosures
  Oil (MBbls)Legacy/
    
    
    Formation
    
    
    2006
    
    
    Historical
    
    
    Binger
    
    
    Ameristate
    
    
    TSF
    
    
    Legacy
    
    
    Raven OBO
    
    
    Pro FormaMoriah
    
    
    Entities
    
    
    Acquisitions
    
    
    Legacy
    
    
    Acquisition
    
    
    Acquisition
    
    
    Acquisition
    
    
    Previous
    
    
    Acquisition
    
    
    TotalTotal
Proved Reserves:Balance, December 31, 2005
    
    
    8,118
    
    
    
    4,191
    
    
    
    1,769
    
    
    
    14,078
    
    
    
    1,926
    
    
    
    55
    
    
    
    630
    
    
    
    16,689
    
    
    
    1,043
    
    
    
    17,732Purchases (sales) of minerals
in place
    
    
    6,352
    
    
    
    (4,141
    )
    
    
    (1,698
    )
    
    
    513
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    513
    
    
    
    
    
    
    
    513Extensions and discoveries
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75
    
    
    
    
    
    
    
    75Revisions of previous
estimates due to infill
drilling, recompletions and
stimulations
    
    
    233
    
    
    
    
    
    
    
    
    
    
    
    233
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    233
    
    
    
    
    
    
    
    233Revisions of previous
estimates due to prices and
performance
    
    
    (657
    )
    
    
    
    
    
    
    
    
    
    
    (657
    )
    
    
    (4
    )
    
    
    7
    
    
    
    13
    
    
    
    (641
    )
    
    
    (81
    )
    
    
    (722
    )Production
    
    
    (749
    )
    
    
    (50
    )
    
    
    (71
    )
    
    
    (870
    )
    
    
    (131
    )
    
    
    (7
    )
    
    
    (53
    )
    
    
    (1,061
    )
    
    
    (69
    )
    
    
    (1,130
    )Balance, December 31, 2006
    
    
    13,372
    
    
    
    
    
    
    
    
    
    
    
    13,372
    
    
    
    1,791
    
    
    
    55
    
    
    
    590
    
    
    
    15,808
    
    
    
    893
    
    
    
    16,701Proved
Developed Reserves:December 31, 2005
    
    
    6,380
    
    
    
    3,631
    
    
    
    1,695
    
    
    
    11,706
    
    
    
    1,526
    
    
    
    51
    
    
    
    630
    
    
    
    13,913
    
    
    
    1,043
    
    
    
    14,956December 31, 2006
    
    
    11,132
    
    
    
    
    
    
    
    
    
    
    
    11,132
    
    
    
    1,391
    
    
    
    51
    
    
    
    590
    
    
    
    13,164
    
    
    
    893
    
    
    
    14,057
 Gas
(MMef)Legacy/
    
    
    Formation
    
    
    2006
    
    
    Historical
    
    
    Binger
    
    
    Ameristate
    
    
    TSF
    
    
    Legacy
    
    
    Raven OBO
    
    
    Pro FormaMoriah
    
    
    Entities
    
    
    Acquisitions
    
    
    Legacy
    
    
    Acquisition
    
    

Acquisition
    
    
    Acquisition
    
    
    Previous
    
    
    Acquisition
    
    
    TotalTotal
Proved Reserves:Balance, December 31, 2005
    
    
    24,457
    
    
    
    9,322
    
    
    
    1,624
    
    
    
    35,403
    
    
    
    6,641
    
    
    
    1,462
    
    
    
    1,691
    
    
    
    45,197
    
    
    
    2,380
    
    
    
    47,577Purchases (sales) of minerals
in place
    
    
    11,871
    
    
    
    (9,204
    )
    
    
    (1,569
    )
    
    
    1,098
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,098
    
    
    
    
    
    
    
    1,098Extensions and discoveries
    
    
    207
    
    
    
    
    
    
    
    
    
    
    
    207
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    207
    
    
    
    
    
    
    
    207Revisions of previous
estimates due to infill
drilling, recompletions and
stimulations
    
    
    494
    
    
    
    
    
    
    
    
    
    
    
    494
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    494
    
    
    
    
    
    
    
    494Revisions of previous
estimates due to prices and
performance
    
    
    (2,296
    )
    
    
    
    
    
    
    
    
    
    
    (2,296
    )
    
    
    (27
    )
    
    
    (12
    )
    
    
    100
    
    
    
    (2,235
    )
    
    
    (106
    )
    
    
    (2,341
    )Production
    
    
    (2,200
    )
    
    
    (118
    )
    
    
    (55
    )
    
    
    (2,373
    )
    
    
    (331
    )
    
    
    (192
    )
    
    
    (150
    )
    
    
    (3,046
    )
    
    
    (201
    )
    
    
    (3,247
    )Balance, December 31, 2006
    
    
    32,533
    
    
    
    
    
    
    
    
    
    
    
    32,533
    
    
    
    6,283
    
    
    
    1,258
    
    
    
    1,641
    
    
    
    41,715
    
    
    
    2,073
    
    
    
    43,788Proved
Developed Reserves:December 31, 2005
    
    
    20,618
    
    
    
    8,535
    
    
    
    1,498
    
    
    
    30,651
    
    
    
    5,957
    
    
    
    1,330
    
    
    
    1,691
    
    
    
    39,629
    
    
    
    2,380
    
    
    
    42,009December 31, 2006
    
    
    28,126
    
    
    
    
    
    
    
    
    
    
    
    28,126
    
    
    
    5,599
    
    
    
    1,126
    
    
    
    1,641
    
    
    
    36,492
    
    
    
    2,073
    
    
    
    38,565
 14




---



##### 



LEGACY
RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
 NGL (MBbls)Legacy/
    
    
    Formation
    
    
    2006
    
    
    Historical
    
    
    Binger
    
    
    Ameristate
    
    
    TSF
    
    
    Legacy
    
    
    Raven OBO
    
    
    Pro FormaMoriah
    
    
    Entities
    
    
    Acquisitions
    
    
    Legacy
    
    
    Acquisition
    
    
    Acquisition
    
    
    Acquisition
    
    
    Previous
    
    
    Acquisition
    
    
    TolalTotal Proved Reserves:Balance, December 31, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,479
    
    
    
    
    
    
    
    
    
    
    
    1,479
    
    
    
    194
    
    
    
    1,673Purchases of
minerals-in-place
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Extensions and discoveries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Revisions of previous
estimates due to infill
drilling, recompletions and
stimulations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Revisions of previous
estimates due to prices and
performance
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (4
    )
    
    
    1
    
    
    
    (3
    )Production
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (87
    )
    
    
    
    
    
    
    
    
    
    
    (87
    )
    
    
    (11
    )
    
    
    (98
    )Balance, December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,388
    
    
    
    
    
    
    
    
    
    
    
    1,388
    
    
    
    184
    
    
    
    1,572Proved Developed Reserves:December 31, 2005
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,246
    
    
    
    
    
    
    
    
    
    
    
    1,246
    
    
    
    194
    
    
    
    1,440December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,155
    
    
    
    
    
    
    
    
    
    
    
    1,155
    
    
    
    184
    
    
    
    1,339
 15




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
  Oil (MBbls)Brothers
    
    Charitable
    
    H2K
    
    Pro FormaGroup
    
    Foundations
    
    Holdings
    
    TotalTotal Proved Reserves:Balance, December 31, 2005
    
    
    3,685
    
    
    
    457
    
    
    
    49
    
    
    
    4,191Purchases (sales) of
minerals
in place
    
    
    (3,640
    )
    
    
    (453
    )
    
    
    (48
    )
    
    
    (4,141
    )Production
    
    
    (45
    )
    
    
    (4
    )
    
    
    (1
    )
    
    
    (50
    )Balance, December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Proved Developed Reserves:December 31, 2005
    
    
    3,213
    
    
    
    377
    
    
    
    41
    
    
    
    3,631December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 Gas (MMcf)Brothers
    
    Charitable
    
    H2K
    
    Pro FormaGroup
    
    Foundations
    
    Holdings
    
    TotalTotal Proved Reserves:Balance, December 31, 2005
    
    
    8,013
    
    
    
    1,185
    
    
    
    124
    
    
    
    9,322Purchases (sales) of
minerals
in place
    
    
    (7,907
    )
    
    
    (1,174
    )
    
    
    (123
    )
    
    
    (9,204
    )Production
    
    
    (106
    )
    
    
    (11
    )
    
    
    (1
    )
    
    
    (118
    )Balance, December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Proved Developed Reserves:December 31, 2005
    
    
    7,346
    
    
    
    1,076
    
    
    
    113
    
    
    
    8,535December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 16




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
  Oil (MBbls)South
    
    Kinder
    
    Pro FormaJustis
    
    Morgan
    
    TotalTotal Proved Reserves:Balance, December 31, 2005
    
    
    538
    
    
    
    1,231
    
    
    
    1,769Purchases (sales) of
minerals
in place
    
    
    (522
    )
    
    
    (1,176
    )
    
    
    (1,698
    )Production
    
    
    (16
    )
    
    
    (55
    )
    
    
    (71
    )Balance, December 31, 2006
    
    
    
    
    
    
    
    
    
    
    Proved Developed Reserves:December 31, 2005
    
    
    464
    
    
    
    1,231
    
    
    
    1,695December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
 Gas (MMcf)South
    
    Kinder
    
    Pro FormaJustis
    
    Morgan
    
    TotalTotal Proved Reserves:Balance, December 31, 2005
    
    
    1,079
    
    
    
    545
    
    
    
    1,624Purchases (sales) of
minerals
in place
    
    
    (1,044
    )
    
    
    (525
    )
    
    
    (1,569
    )Production
    
    
    (35
    )
    
    
    (20
    )
    
    
    (55
    )Balance, December 31, 2006
    
    
    
    
    
    
    
    
    
    
    Proved Developed Reserves:December 31, 2005
    
    
    953
    
    
    
    545
    
    
    
    1,498December 31, 2006
    
    
    
    
    
    
    
    
    
    
    
 17




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
  December 31, 2006Legacy/
    
    
    Binger
    
    
    Ameristate
    
    
    TSF
    
    
    Raven OBO
    
    
    Pro FormaMoriah
    
    
    Acquisition
    
    
    Acquisition
    
    
    Acquisition
    
    
    Acquisition
    
    
    Total(in thousands)Future production revenues
    
    $
    947,914
    
    
    $
    195,500
    
    
    $
    10,186
    
    
    $
    44,923
    
    
    $
    71,096
    
    
    $
    1,269,619Future costs:Production
    
    
    (387,238
    )
    
    
    (118,403
    )
    
    
    (3,306
    )
    
    
    (15,323
    )
    
    
    (35,318
    )
    
    
    (559,588
    )Development
    
    
    (43,419
    )
    
    
    (7,904
    )
    
    
    (959
    )
    
    
    
    
    
    
    (272
    )
    
    
    (52,554
    )Future net cash flows
before income taxes
    
    
    517,257
    
    
    
    69,193
    
    
    
    5,921
    
    
    
    29,600
    
    
    
    35,506
    
    
    
    657,47710% annual discount for
estimated timing of
cash flows
    
    
    (276,694
    )
    
    
    (30,474
    )
    
    
    (2,348
    )
    
    
    (15,671
    )
    
    
    (17,565
    )
    
    
    (342,752
    )Standardized measure of
discounted net cash
flows
    
    $
    240,563
    
    
    $
    38,719
    
    
    $
    3,573
    
    
    $
    13,929
    
    
    $
    17,941
    
    
    $
    314,725
 18




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
  December 31, 2006Legacy/
    
    
    Formation
    
    
    2006
    
    
    Historical
    
    
    Binger
    
    
    Ameristate
    
    
    TSF
    
    
    Legacy
    
    
    Raven OBO
    
    
    Pro FormaMoriah
    
    
    Entities
    
    
    Acquisitions
    
    
    Legacy
    
    
    Acquisition
    
    
    Acquisition
    
    
    Acquisition
    
    
    Previous
    
    
    Acquisition
    
    
    Total(in thousands)Increase (decrease):Sales, net of production
costs
    
    $
    (40,113
    )
    
    $
    (2,628
    )
    
    $
    (3,493
    )
    
    $
    (46,234
    )
    
    $
    (9,057
    )
    
    $
    (1,171
    )
    
    $
    (3,876
    )
    
    $
    (60,338
    )
    
    $
    (3,992
    )
    
    $
    (64,330
    )Net change in sales prices,
net of production costs
    
    
    (60,531
    )
    
    
    
    
    
    
    
    
    
    
    (60,531
    )
    
    
    (15,785
    )
    
    
    (2,539
    )
    
    
    (3,275
    )
    
    
    (82,130
    )
    
    
    (4,480
    )
    
    
    (86,610
    )Changes in
estimated future
development costs
    
    
    4,582
    
    
    
    
    
    
    
    
    
    
    
    4,582
    
    
    
    18
    
    
    
    (89
    )
    
    
    
    
    
    
    4,511
    
    
    
    (258
    )
    
    
    4,253Extensions and discoveries,
net of future production
and development costs
    
    
    2,723
    
    
    
    
    
    
    
    
    
    
    
    2,723
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,723
    
    
    
    
    
    
    
    2,723Previously estimated
development costs
incurred
    
    
    9,517
    
    
    
    
    
    
    
    
    
    
    
    9,517
    
    
    
    1,759
    
    
    
    100
    
    
    
    141
    
    
    
    11,517
    
    
    
    44
    
    
    
    11,561Revisions of previous
estimates due to infill
drilling, recompletions
and stimulations
    
    
    7,919
    
    
    
    
    
    
    
    
    
    
    
    7,919
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,919
    
    
    
    
    
    
    
    7,919Revisions of previous
estimates due to prices
and performance
    
    
    (12,232
    )
    
    
    
    
    
    
    
    
    
    
    (12,232
    )
    
    
    (122
    )
    
    
    78
    
    
    
    468
    
    
    
    (11,808
    )
    
    
    (1,246
    )
    
    
    (13,054
    )Purchases (sales) of minerals
in place
    
    
    127,009
    
    
    
    (82,563
    )
    
    
    (27,125
    )
    
    
    17,321
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,321
    
    
    
    
    
    
    
    17,321Other
    
    
    (2,971
    )
    
    
    
    
    
    
    
    
    
    
    (2,971
    )
    
    
    4,852
    
    
    
    (615
    )
    
    
    877
    
    
    
    2,143
    
    
    
    1,608
    
    
    
    3,751Accretion of discount
    
    
    12,663
    
    
    
    
    
    
    
    
    
    
    
    12,663
    
    
    
    5,005
    
    
    
    701
    
    
    
    1,575
    
    
    
    19,944
    
    
    
    2,354
    
    
    
    22,298Net Increase (decrease)
    
    
    48,566
    
    
    
    (85,191
    )
    
    
    (30,618
    )
    
    
    (67,243
    )
    
    
    (13,330
    )
    
    
    (3,535
    )
    
    
    (4,090
    )
    
    
    (88,198
    )
    
    
    (5,970
    )
    
    
    (94,168
    )Standardized measure of
discounted net cash
flows:Beginning of year
    
    
    191,997
    
    
    
    85,191
    
    
    
    30,618
    
    
    
    307,806
    
    
    
    52,049
    
    
    
    7,108
    
    
    
    18,019
    
    
    
    384,982
    
    
    
    23,911
    
    
    
    408,893End of year
    
    $
    240,563
    
    
    $
    
    
    
    $
    
    
    
    $
    240,563
    
    
    $
    38,719
    
    
    $
    3,573
    
    
    $
    13,929
    
    
    $
    296,784
    
    
    $
    17,941
    
    
    $
    314,725
  19




---



##### 



LEGACY RESERVES LP (FORMERLY MORIAH GROUP)
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
(continued)
 December 31, 2006Brothers
    
    
    Charitable
    
    
    H2K
    
    
    Pro FormaGroup
    
    
    Foundations
    
    
    Holdings
    
    
    Total(in thousands)Increase (decrease):Sales, net of production
costs
    
    $
    (2,406
    )
    
    $
    (198
    )
    
    $
    (24
    )
    
    $
    (2,628
    )Purchase (sales) of minerals
in place
    
    
    (72,441
    )
    
    
    (9,140
    )
    
    
    (982
    )
    
    
    (82,563
    )Net increase (decrease)
    
    
    (74,847
    )
    
    
    (9,338
    )
    
    
    (1,006
    )
    
    
    (85,191
    )Standardized measure of
discounted net cash
flows:Beginning of year
    
    
    74,847
    
    
    
    9,338
    
    
    
    1,006
    
    
    
    85,191End of year
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
  December 31, 2006South
    
    
    Kinder
    
    
    Pro FormaJustis
    
    
    Morgan
    
    
    Total(in thousands)Increase (decrease):Sales, net of production
costs
    
    $
    (892
    )
    
    $
    (2,601
    )
    
    $
    (3,493
    )Purchase of minerals-in-place
    
    
    (10,096
    )
    
    
    (17,029
    )
    
    
    (27,125
    )Net Increase (decrease)
    
    
    (10,988
    )
    
    
    (19,630
    )
    
    
    (30,618
    )Standardized measure of
discounted net cash
flows:Beginning of year
    
    
    10,988
    
    
    
    19,630
    
    
    
    30,618End of year
    
    $
    
    
    
    $
    
    
    
    $
    
 20