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:

• the amount of oil and natural gas we produce;

• the level of capital expenditures;

• the price at which we are able to sell our oil and natural gas production;

• our ability to acquire additional oil and natural gas properties at economically attractive prices;

• our drilling locations and our ability to continue our development activities at economically attractive costs;

• the level of our lease operating expenses, general and administrative costs and finding and development costs, including payments to our general partner;

• our future operating results; and

• our business strategy, 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 our expectations may not be realized or the forward-looking events and circumstances may not occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to factors described in Legacy's Annual Report on Form 10-K for the year ended December 31, 2008 and this Quarterly Report on Form 10-Q in Item 1A 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.

We were formed in October 2005. Upon completion of our private equity offering and as a result of the formation of Legacy Reserves LP on March 15, 2006, we acquired oil and natural gas properties and business operations from our Founding Investors and three charitable foundations.

Because of our rapid growth through acquisitions and development of properties, historical results of operations and period-to-period comparisons of these results and certain financial data may not be meaningful or indicative of future results. The operating results from the COP III Acquisition have been included from April 30, 2008 and the operating results from the Pantwist Acquisition have been included from October 1, 2008.

Acquisitions have been financed with a combination of proceeds from bank borrowings, issuances of units and cash flow from operations. Post-acquisition activities are focused on evaluating and developing the acquired properties and evaluating potential add-on acquisitions.

Our revenues, cash flow from operations and future growth depend substantially on factors beyond our control, such as economic, political and regulatory developments and competition from other sources of energy. Oil and natural gas prices historically have been volatile and may fluctuate widely in the future.

Sustained periods of low prices for oil or natural gas could materially and adversely affect our financial position, our results of operations, the quantities of oil and natural gas reserves that we can economically produce, our access to capital and the amount of our cash distributions.

We face the challenge of natural production declines. As initial reservoir pressures are depleted, oil and natural gas production from a given well or formation decreases. We attempt to overcome this natural decline by utilizing multiple types of recovery techniques such as secondary (waterflood) and tertiary (CO2) recovery methods to repressure the reservoir and recover additional oil, drilling to find additional reserves, re-stimulating existing wells and acquiring more reserves than we produce. Our future growth will depend on our ability to continue to add reserves in excess of production. We will maintain our focus on adding reserves through acquisitions and exploitation projects. Our ability to add reserves through acquisitions and exploitation projects is dependent upon many factors including our ability to raise capital and obtain regulatory approvals.

Our revenues are highly sensitive to changes in oil and natural gas prices and to levels of production. As set forth under "Cash Flow from Operations" below, we have entered into derivative transactions covering a significant portion of our expected production, which allows us to mitigate, but not eliminate, oil and natural gas price risk. We continuously conduct financial sensitivity analyses to assess the effect of changes in pricing and production. These analyses allow us to determine how changes in oil and natural gas prices will affect our ability to execute our capital investment programs and to meet future financial obligations. Further, the financial analyses allow us to monitor any impact such changes in oil and natural gas prices may have on the value of our proved reserves and their impact, if any, on any redetermination of our borrowing base under our revolving credit facility.

Legacy does not specifically designate derivative instruments as cash flow hedges; therefore, the mark-to-market adjustment reflecting the unrealized gain or loss associated with these instruments is recorded in current earnings.

We strive to increase our production levels to maximize our revenue and cash available for distribution. Additionally, we continuously monitor our operations to ensure that we are incurring operating costs at the optimal level. Accordingly, we continuously monitor our production and operating costs per well to determine if any wells or properties should be shut-in, recompleted or sold.

Such costs include, but are not limited to, the cost of electricity to lift produced fluids, chemicals to treat wells, field personnel to monitor the wells, well repair expenses to restore production, well workover expenses intended to increase production, and ad valorem taxes. We incur and separately report severance taxes paid to the states in which our properties are located. These taxes are reported as production taxes and are a percentage of oil and natural gas revenue. Ad valorem taxes are a percentage of property valuation and are reported with production costs. Gathering and transportation costs are generally borne by the purchasers of our oil and natural gas as the price paid for our products reflects these costs.

                                 Operating Data

The following table sets forth selected unaudited financial and operating data
of Legacy for the periods indicated.

                                           Three Months Ended September 30,     Nine Months Ended September 30,
                                                2009                2008             2009               2008
                                                           (In thousands, except per unit data)
Revenues:
Oil sales                                  $        28,637       $   47,912     $       69,706       $  132,400
Natural gas liquid sales                             3,367            5,031              7,914           13,314
Natural gas sales                                    5,894           12,668             15,192           35,293
Total revenue                              $        37,898       $   65,611     $       92,812       $  181,007

Expenses:
Oil and natural gas production             $        11,462       $   14,751     $       32,671       $   36,005
Ad valorem taxes                           $         1,055       $    1,033     $        3,317       $    2,822
Total oil and natural gas production       $        12,517       $   15,784     $       35,988       $   38,827
Production and other taxes                 $         2,251       $    4,096     $        5,491       $   10,654
General and administrative                 $         4,001       $    2,158     $       11,269       $    8,872
Depletion, depreciation,
amortization and accretion                 $        13,302       $   13,082     $       43,472       $   33,223

Realized swap settlements
Realized gain (loss) on oil swaps          $         6,386       $  (17,463 )   $       33,981       $  (36,636 )
Realized gain (loss) on natural gas
liquid swaps                               $            77       $   (1,359 )   $          749       $   (3,092 )
Realized gain (loss) on natural gas
swaps                                      $         3,663       $     (928 )   $       11,030       $   (1,931 )

Production:
Oil - barrels                                          438              416              1,339            1,191
Natural gas liquids - gallons                        4,084            3,301             11,316            8,843
Natural gas - Mcf                                    1,306            1,222              3,813            3,518
Total (MBoe)                                           753              698              2,244            1,988
Average daily production (Boe/d)                     8,185            7,587              8,220            7,255

Average sales price per unit (excluding
swaps):
Oil price per barrel                       $         65.38       $   115.17     $        52.06       $   111.17
Natural gas liquid price per gallon        $          0.82       $     1.52     $         0.70       $     1.51
Natural gas price per Mcf                  $          4.51       $    10.37     $         3.98       $    10.03
Combined (per Boe)                         $         50.33       $    94.00     $        41.36       $    91.05

Average sales price per unit (including
realized swap gains/losses):
Oil price per barrel                       $         79.96       $    73.19     $        77.44       $    80.41
Natural gas liquid price per gallon        $          0.84       $     1.11     $         0.77       $     1.16
Natural gas price per Mcf                  $          7.32       $     9.61     $         6.88       $     9.48
Combined (per Boe)                         $         63.78       $    65.70     $        61.75       $    70.09

NYMEX oil index prices per barrel:
Beginning of Period                        $         69.89       $   140.00     $        44.60       $    95.98
End of Period                              $         70.61       $   100.64     $        70.61       $   100.64

NYMEX gas index prices per Mcf:
Beginning of Period                        $          3.84       $    13.35     $         5.62       $     7.48
End of Period                              $          4.84       $     7.72     $         4.84       $     7.72

Average unit costs per Boe:
Oil and natural gas production             $         15.22       $    21.13     $        14.56       $    18.11
Ad valorem taxes                           $          1.40       $     1.48     $         1.48       $     1.42
Production and other taxes                 $          2.99       $     5.87     $         2.45       $     5.36
General and administrative                 $          5.31       $     3.09     $         5.02       $     4.46
Depletion, depreciation, amortization
and accretion                              $         17.67       $    18.74     $        19.37       $    16.71

Results of Operations

Three-Month Period Ended September 30, 2009 Compared to Three-Month Period Ended September 30, 2008

Legacy's revenues from the sale of oil were $28.6 million and $47.9 million for the three-month periods ended September 30, 2009 and 2008, respectively. Legacy's revenues from the sale of NGLs were $3.4 million and $5.0 for the three-month periods ended September 30, 2009 and 2008, respectively. Legacy's revenues from the sale of natural gas were $5.9 million and $12.7 million for the three-month periods ended September 30, 2009 and 2008, respectively. The $19.3 million decrease in oil revenues reflects the decrease in average realized price of $49.79 per Bbl (43%). This price decline was partially offset by an increase in oil production of 22 MBbls (5%) due primarily to Legacy's purchase of the oil and natural gas properties in the Pantwist Acquisition. The $1.6 million decrease in proceeds from NGL sales reflects the decrease in realized NGL price of $0.70 per gallon (46%) partially offset by an increase in NGL production of approximately 783 MGals (24%) due primarily to Legacy's purchase of oil and natural gas properties in the Pantwist Acquisition. The $6.8 million decrease in natural gas revenues reflects the decrease in average realized price per Mcf of $5.86 per Mcf (56%) partially offset by an increase in natural gas production of approximately 84 MMcf (7%) due primarily to Legacy's purchase of oil and natural gas properties in the Pantwist Acquisition.

For the three-month period ended September 30, 2009, Legacy recorded $4.4 million of net gains on oil, NGL and natural gas swaps comprised of realized gains of $10.1 million from net cash settlements of oil, NGL and natural gas swap contracts and net unrealized loss of $5.7 million. Legacy had unrealized net losses from oil swaps because the price of oil increased during the three-month period ended September 30, 2009. As a point of reference, the NYMEX price for light sweet crude oil for the near-month close increased from $69.89 per Bbl at June 30, 2009 to $70.61 per Bbl at September 30, 2009, a price which is less than the average contract prices of Legacy's outstanding oil swap contracts, but greater than the price at June 30, 2009, resulting in a reduction of unrealized net gain attributable to Legacy's outstanding oil swap contracts. Due to the increase in oil prices during the quarter, the differential between Legacy's fixed price oil swaps and NYMEX decreased, resulting in losses for the quarter. Legacy had unrealized net losses from NGL swaps because NGL prices increased during the three-month period ended September 30, 2009. Legacy had unrealized net losses from natural gas swaps because the NYMEX natural gas prices increased during the three-month period ended September 30, 2009. As a point of reference, the NYMEX price for natural gas for the near-month close increased from $3.84 per MMBtu at June 30, 2009 to $4.84 per MMBtu at September 30, 2009, a price which is less than the average contract prices of Legacy's outstanding natural gas swap contracts, but greater than the price at June 30, 2009, resulting in a decrease of unrealized net gain attributable to Legacy's outstanding natural gas swap contracts. For the three-month period ended September 30, 2008, Legacy recorded $202.4 million of net gains on oil, NGL and natural gas swaps comprised of realized losses of $19.7 million from net cash settlements of oil, NGL and natural gas swap contracts and a net unrealized gain of $185.7 million on oil swap contracts, due to the decrease in oil prices during the quarter which decreased the differential between the NYMEX oil index price and our fixed price oil swaps, a net unrealized gain of $4.1 million on NGL swap contracts and a net unrealized gain of $32.3 million on natural gas swap contracts, due to the decrease in natural gas prices during the period. Unrealized gains and losses represent a current period mark-to-market adjustment for commodity derivatives which will be settled in future periods.

Legacy's oil and natural gas production expenses, excluding ad valorem taxes, decreased to $11.5 million ($15.22 per Boe) for the three-month period ended September 30, 2009, from $14.8 million ($21.13 per Boe) for the three-month period ended September 30, 2008. Production expenses decreased primarily due to industry-wide cost decreases, particularly those directly related to lower commodity prices, such as the cost of electricity, which powers artificial lift equipment and pumps involved in the production of oil. This decrease was partially offset by increased oil and natural gas production expenses related to the Pantwist Acquisition. Legacy's ad valorem expense increased to $1.1 million ($1.40 per Boe) for the three-month period ended September 30, 2009, from $1.0 million ($1.48 per Boe) for the three-month period ended September 30, 2008 primarily because of increased property values from the Pantwist acquisition and periods of ownership from 2008 acquisitions.

Legacy's production and other taxes were $2.3 million and $4.1 million for the three-month periods ended September 30, 2009 and 2008, respectively. Production and other taxes decreased primarily because of the decrease in realized prices. As production and other taxes are a function of price and volume, the decrease is consistent with the decrease in realized prices.

Legacy's general and administrative expenses were $4.0 million and $2.2 million for the three-month periods ended September 30, 2009 and 2008, respectively. General and administrative expenses increased approximately $1.8 million between the three-month periods ended September 30, 2009 and 2008 primarily due to increases in non-cash LTIP expenses of $1.7 million due to increased grant amounts and rising unit prices. As the LTIP is tied to our unit performance, rising unit prices causes an increase in LTIP expenses whereas our unit prices decreased during the three-month period ended September 30, 2008, which reduced the expenses related to our LTIP.

Legacy's depletion, depreciation, amortization and accretion expense, or DD&A, was $13.3 million and $13.1 million for the three-month periods ended September 30, 2009 and 2008, respectively. DD&A increased partially because of DD&A related to the Pantwist Acquisition. This increase was partially offset by the decrease in DD&A expense per Boe, from $18.74 to $17.67 for the three-month periods ended September 30, 2008 and 2009, respectively, which reflects the decreased net cost basis of our producing properties due to the large impairments incurred in the fourth quarter of 2008.

Impairment expense was $2.4 million and $0.3 for the three-month periods ended September 30, 2009 and 2008, respectively. In the three-month period ended September 30, 2009, Legacy recognized impairment expense in a single producing field, due to the net cost basis of the field exceeding the estimated future net revenues. The net cost basis was impacted by the ARO asset incurred at the acquisition date of the field. Due to the high number of non-producing or shut-in wells in the field, the ARO asset addition to the cost basis resulted in impairment as there were no future net revenues attributable to these properties. The impairment expense for the period ended September 30, 2008, involved twelve producing fields due primarily to lower commodity prices and rising production costs.

Legacy recorded interest expense of $8.6 million and $4.2 million for the three-month periods ended September 30, 2009 and 2008, respectively, due to $3.6 million and $1.0 million of interest expense, respectively, related to the mark-to-market of our interest rate swaps. Both interest expense and interest rate swap settlements were larger during the three-month period ended September 30, 2009, due to higher average debt balances. Though the lower average interest rates reduced the associated interest expense amounts in the three-month period ended September 30, 2009, they increased the settlement payments associated with our interest rate swaps by approximately $1.6 million.

Nine-Month Period Ended September 30, 2009 Compared to Nine-Month Period Ended September 30, 2008

Legacy's revenues from the sale of oil were $69.7 million and $132.4 million for the nine-month periods ended September 30, 2009 and 2008, respectively. Legacy's revenues from the sale of NGLs were $7.9 million and $13.3 for the nine-month periods ended September 30, 2009 and 2008, respectively. Legacy's revenues from the sale of natural gas were $15.2 million and $35.3 million for the nine-month periods ended September 30, 2009 and 2008, respectively. The $62.7 million decrease in oil revenues reflects the decrease in average realized price of $59.11 per Bbl (53%). This price decline was partially offset by an increase in oil production of 148 MBbls (12%) due primarily to Legacy's purchase of the oil and natural gas properties in the COP III and Pantwist Acquisitions. The $5.4 million decrease in proceeds from NGL sales reflects the decrease in realized NGL price of $0.81 per gallon (54%) partially offset by an increase in NGL production of approximately 2,473 MGals (28%) due primarily to Legacy's purchase of oil and natural gas properties in the COP III and Pantwist Acquisitions. The $20.1 million decrease in natural gas revenues reflects the decrease in average realized price of $6.05 per Mcf (60%) partially offset by an increase in natural gas production of approximately 295 MMcf (8%) due primarily to Legacy's purchase of oil and natural gas properties in the COP III and Pantwist Acquisitions.

For the nine-month period ended September 30, 2009, Legacy recorded $35.2 million of net losses on oil, NGL and natural gas swaps comprised of realized gains of $45.8 million from net cash settlements of oil, NGL and natural gas swap contracts and a net unrealized loss of $81.0 million. Legacy had unrealized net losses from oil swaps because the price of oil increased during the nine-month period ended September 30, 2009. As a point of reference, the NYMEX price for light sweet crude oil for the near-month close increased from $44.60 per Bbl at December 31, 2008 to $70.61 per Bbl at September 30, 2009, a price which is less than the average contract prices of Legacy's outstanding oil swap contracts, but greater than the price at December 31, 2008, resulting in a reduction of unrealized net gain attributable to Legacy's outstanding oil swap contracts. Due to the increase in oil prices during the nine-month period ending September 30, 2009, the differential between Legacy's fixed price oil swaps and NYMEX decreased, resulting in losses for the period. Legacy had unrealized net losses from NGL swaps because NGL prices increased during the nine-month period ended September 30, 2009. Legacy had unrealized net losses from natural gas swaps even though the NYMEX natural gas prices decreased during the nine-month period ended September 30, 2009. As a point of reference, the NYMEX price for natural gas for the near-month close decreased from $5.62 per MMBtu at December 31, 2008 to $4.84 per MMBtu at September 30, 2009, a price which is less than the average contract prices of Legacy's outstanding natural gas swap contracts. However, the income assumed from the decrease in prices was offset by natural gas swaps with lower fixed prices entered into during the nine months ended September 30, 2009. For the nine-month period ended September 30, 2008, Legacy recorded $54.9 million of net losses on oil, NGL and natural gas swaps comprised of realized losses of $41.7 million from net cash settlements of oil, NGL and natural gas swap contracts and a net unrealized loss of $18.8 million on oil swap contracts, due to the increase in oil prices during the nine-month period ended September 30, 2008, which increased the differential between the NYMEX oil index price and our fixed price oil swaps, a net unrealized gain of $1.6 million on NGL swap contracts and a net unrealized gain of $4.1 million on natural gas swap contracts, due to the increase in natural gas prices during the period. Unrealized gains and losses represent a current period mark-to-market adjustment for commodity derivatives which will be settled in future periods.

Legacy's oil and natural gas production expenses, excluding ad valorem taxes, decreased to $32.7 million ($14.56 per Boe) for the nine-month period ended September 30, 2009, from $36.0 million ($18.11 per Boe) for the nine-month period ended September 30, 2008. Production expenses decreased primarily because of a $2.2 million reduction in workover activity for the nine-month period ended September 30, 2009 compared to the nine-month period ended September 30, 2008 as well as a general decrease in the cost of goods and services over the same time period. This decrease was partially offset by increased oil and natural gas production expenses related to the COP III and Pantwist Acquisitions. Legacy's ad valorem expense increased to $3.3 million ($1.48 per Boe) for the nine-month period ended September 30, 2009, from $2.8 million ($1.42 per Boe) for the nine-month period ended September 30, 2008 primarily because of increased property values from the COP III and Pantwist Acquisitions.

Legacy's production and other taxes were $5.5 million and $10.7 million for the nine-month periods ended September 30, 2009 and 2008, respectively. Production and other taxes decreased primarily because of the decrease in realized prices. As production and other taxes are a function of price and volume, the decrease is consistent with the decrease in realized prices.

Legacy's general and administrative expenses were $11.3 million and $8.9 million for the nine-month periods ended September 30, 2009 and 2008, respectively. General and administrative expenses increased approximately $2.4 million between the nine-month periods ended September 30, 2009 and 2008 primarily due to costs incurred related to the review of the Proposal Letter from Apollo Management VII, LP ("Apollo Management") in which Apollo Management had offered to acquire all of the outstanding units of Legacy (the "Apollo Offer"). Legacy incurred legal, consulting and board fees of approximately $1.3 million during the nine-month period ended September 30, 2009 to evaluate the Apollo Offer. In addition, Legacy incurred approximately $0.8 million in increased non-cash compensation expense related to the LTIP in the nine-month period ended September 30, 2009 due to increases in our unit price.

Legacy's DD&A was $43.5 million and $33.2 million for the nine-month periods ended September 30, 2009 and 2008, respectively. DD&A increased partially because of DD&A related to the COP III and Pantwist Acquisitions. In addition, . . .