FIRST
AMENDMENT
TO
FIRST
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
EV
ENERGY PARTNERS, L.P.
This
First Amendment (this “
First
Amendment
”)
to the
First Amended and Restated Agreement of Limited Partnership of EV Energy
Partners, L.P., a Delaware limited partnership, dated September 28, 2006
(the “
Partnership
Agreement
”)
is
hereby adopted effective as of January 1, 2007, by EV Energy GP, L.P., a
Delaware limited partnership (the “
General
Partner
”),
as
general partner of the Partnership. Capitalized terms used but not defined
herein are used as defined in the Partnership Agreement.
WHEREAS
,
acting
pursuant to the power and authority granted to it under
Section 13.1(d)
of the
Partnership Agreement, the General Partner has determined that the following
amendment to the Partnership Agreement
does
not
require the approval of any Limited Partner.
NOW
THEREFORE
,
the
General Partner does hereby amend the Partnership Agreement as
follows:
Section
1.
Amendment
.
(a)
Section
1.1
is
hereby amended to add or amend and restate the following
definitions:
(i)
“
Disposed
of Adjusted Property
”
has
the
meaning assigned to such term in
Section
6.1(d)(xii)(B)
.
(ii)
“
Net
Termination Gain
”
means,
for any taxable year, the sum, if positive, of all items of income, gain, loss
or deduction recognized by the Partnership (a) after the Liquidation Date or
(b)
upon the sale, exchange or other disposition of all or substantially all of
the
assets of the Partnership Group, taken as a whole, in a single transaction
or a
series of related transactions (excluding any disposition to a member of the
Partnership Group). The items included in the determination of Net Termination
Gain shall be determined in accordance with
Section 5.5(b)
and
shall not include any items of income, gain or loss specially allocated under
Section 6.1(d)
.
(iii)
“
Net
Termination Loss
”
means,
for any taxable year, the sum, if negative, of all items of income, gain, loss
or deduction recognized by the Partnership (a) after the Liquidation Date or
(b)
upon the sale, exchange or other disposition of all or substantially all of
the
assets of the Partnership Group, taken as a whole, in a single transaction
or a
series of related transactions (excluding any disposition to a member of the
Partnership Group). The items included in the determination of Net Termination
Loss shall be determined in accordance with
Section 5.5(b)
and
shall not include any items of income, gain or loss specially allocated under
Section 6.1(d)
.
(b)
Section 5.5(d)
is
hereby amended and restated in its entirety as follows:
(i)
In
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), on an issuance
of additional Partnership Interests for cash or Contributed Property, the
issuance of Partnership Interests as consideration for the provision of services
or the conversion of Incentive Distribution Rights or the General Partner’s
Combined Interest to Common Units pursuant to
Section 11.3(b)
,
as the
case may be, to Class B Units or Common Units pursuant to
Section 5.11(a)
or
Section 11.3(b)
,
the
Capital Accounts of all Partners and the Carrying Value of each Partnership
property immediately prior to such issuance shall be adjusted upward or downward
to reflect any Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as if such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property for an amount equal to its
fair market value immediately prior to such issuance and had been allocated
to
the Partners at such time pursuant to
Section
6.1(c)
in the
same manner as any item of gain or loss actually recognized following an event
giving rise to the dissolution of the Partnership would have been allocated.
In
determining such Unrealized Gain or Unrealized Loss, the aggregate cash amount
and fair market value of all Partnership assets (including cash or cash
equivalents) immediately prior to the issuance of additional Partnership
Interests shall be determined by the General Partner using such method of
valuation as it may adopt; provided, however, that the General Partner, in
arriving at such valuation, must take fully into account the fair market value
of the Partnership Interests of all Partners at such time. The General Partner
shall allocate such aggregate value among the assets of the Partnership (in
such
manner as it determines) to arrive at a fair market value for individual
properties.
(ii)
In
accordance with Treasury Regulation Section 1.704-1(b)(2)(iv)(f), immediately
prior to any actual or deemed distribution to a Partner of any Partnership
property (other than a distribution of cash that is not in redemption or
retirement of a Partnership Interest), the Capital Accounts of all Partners
and
the Carrying Value of all Partnership property shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable to
such
Partnership property, as if such Unrealized Gain or Unrealized Loss had been
recognized on an actual sale of each such property immediately prior to such
distribution for an amount equal to its fair market value, and had been
allocated to the Partners, at such time, pursuant to
Section
6.1(c)
in the
same manner as any item of gain or loss actually recognized following an event
giving rise to the dissolution of the Partnership would have been allocated.
In
determining such Unrealized Gain or Unrealized Loss the aggregate cash amount
and fair market value of all Partnership assets (including cash or cash
equivalents) immediately prior to a distribution shall (A) in the case of an
actual distribution that is not made pursuant to
Section 12.4
or in
the case of a deemed distribution, be determined and allocated in the same
manner as that provided in
Section 5.5(d)(i)
or (B)
in the case of a liquidating distribution pursuant to
Section 12.4
,
be
determined and allocated by the Liquidator using such method of valuation as
it
may adopt
(c)
Section 6.1(d)(xii)
is
hereby amended and restated in its entirety as follows:
Corrective
and Other Allocations
.
In the
event of any allocation of Additional Book Basis Derivative Items or any
Book-Down Event or any recognition of a Net Termination Loss, the following
rules shall apply:
(A)
Except
as
provided in
Section 6.1(d)(xii)(B)
,
in the
case of any allocation of Additional Book Basis Derivative Items (other than
an
allocation of Unrealized Gain or Unrealized Loss under
Section 5.5(d)
)
with
respect to any Partnership property, the General Partner shall allocate such
Additional Book Basis Derivative Items (1) to (aa) the holders of Incentive
Distribution Rights and (bb) the General Partner in the same manner that the
Unrealized Gain or Unrealized Loss attributable to such property is allocated
pursuant to
Section 5.5(d)(i)
or
Section 5.5(d)(ii)
and (2)
to all Unitholders, Pro Rata, to the extent that the Unrealized Gain or
Unrealized Loss attributable to such property is allocated to any Unitholders
pursuant to
Section 5.5(d)(i)
or
Section 5.5(d)(ii)
.
(B)
In
the
case of any allocation of Additional Book Basis Derivative Items (other than
an
allocation of Unrealized Gain or Unrealized Loss under
Section 5.5(d)
or an
allocation of Net Termination Gain or Net Termination Loss pursuant to
Section 6.1(c)
)
as a
result of a sale or other taxable disposition of any Partnership asset that
is
an Adjusted Property (“
Disposed
of Adjusted Property
”),
the
General Partner shall allocate (1) additional items of income and gain
(aa) away from the holders of Incentive Distribution Rights and the General
Partner and (bb) to the Unitholders, or (2) additional items of
deduction and loss (aa) away from the Unitholders and (bb) to the
holders of Incentive Distribution Rights and the General Partner, to the extent
that the Additional Book Basis Derivative Items allocated to the Unitholders
exceed their Share of Additional Book Basis Derivative Items with respect to
such Disposed of Adjusted Property. For this purpose, the Unitholders shall
be
treated as being allocated Additional Book Basis Derivative Items to the extent
that such Additional Book Basis Derivative Items have reduced the amount of
income that would otherwise have been allocated to the Unitholders under this
Agreement (e.g., Additional Book Basis Derivative Items taken into account
in
computing cost of goods sold would reduce the amount of book income otherwise
available for allocation among the Partners). Any allocation made pursuant
to
this
Section 6.1(d)(xii)(B)
shall be
made after all of the other Agreed Allocations have been made as if this
Section 6.1(d)(xii)
were not
in this Agreement and, to the extent necessary, shall require the reallocation
of items that have been allocated pursuant to such other Agreed
Allocations.
(C)
In
the
case of any negative adjustments to the Capital Accounts of the Partners
resulting from a Book-Down Event or from the recognition of a Net Termination
Loss, such negative adjustment (1) shall first be allocated, to the extent
of
the Aggregate Remaining Net Positive Adjustments, in such a manner, as
determined by the General Partner, that to the extent possible the aggregate
Capital Accounts of the Partners will equal the amount that would have been
the
Capital Account balance of the Partners if no prior Book-Up Events had occurred,
and (2) any negative adjustment in excess of the Aggregate Remaining Net
Positive Adjustments shall be allocated pursuant to
Section 6.1(c)
.
(D)
In
making
the allocations required under this
Section 6.1(d)(xii)
,
the
General Partner may apply whatever conventions or other methodology it
determines will satisfy the purpose of this
Section 6.1(d)(xii)
.
Section
2.
Ratification
of Partnership Agreement
.
Except
as expressly modified and amended herein, all of the terms and conditions of
the
Partnership Agreement shall remain in full force and effect.
Section
3.
Governing
Law
.
This
First Amendment will be governed by and construed in accordance with the laws
of
the State of Delaware.
IN
WITNESS WHEREOF
,
the
General Partner has executed this First Amendment as April 15,
2008.
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GENERAL
PARTNER
:
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EV ENERGY GP,
L.P.
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By:
|
EV
Management, L.L.C.,
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its General
Partner
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By:
|
/s/
Michael E. Mercer
|
|
Michael
E. Mercer
|
|
Senior
Vice President
and
Chief Financial Officer
|
EV
Energy Partners To Acquire Oil Properties in Atascosa County,
Texas
HOUSTON,
Apr 14, 2008 (BUSINESS WIRE) -- EV Energy Partners, L.P. (Nasdaq:EVEP) today
announced that it has signed an agreement to acquire oil properties in South
Central Texas for $18 million. The acquisition, which has been approved by
the
Board of Directors, is expected to close by the end of May 2008, and is subject
to customary closing conditions and purchase price adjustments.
EVEP
plans to initially finance the acquisition with borrowings under its existing
credit facility.
John
B.
Walker, Chairman and CEO stated, "We are very pleased with this acquisition
of
producing assets that combine low decline rate oil production with good upside
potential. This is the type of property we love to buy."
The
properties include:
--
42
producing wells located located in the Charlotte Field, Atascosa County, Texas
--
Estimated proved reserves as of March 1, 2008 (based on recent strip prices)
of
approximately 1.34 MMBOE
--
100%
oil
--
Operate 100% of the property value
--
High
net revenue interest averaging 82.5%; 95.0% average working interest
--
Reserves-to-production ratio of 27 years
--
Current net daily production of approximately 140 BOE
--
Proved
developed producing decline rate of approximately 4% per year
From
the
date of closing through 2008, EVEP expects the following for the properties
to
be acquired:
Net
daily production (BOE)
|
125
- 145
|
Lease
operating expenses, per BOE
|
$24
- $28
|
Production
taxes (as percent of revenues)
|
4.6%
|
Price
differential vs NYMEX ($/Boe)
|
($1.50)
- ($2.00)
|
Incremental
general and administrative expense
|
|
($thous)
|
$125
- $150
|
Through
2010, EVEP expects to spend approximately $4.5 million in capital, with
production increasing at approximately 10% per year over the next two years.
In
addition, EVEP has added additional NYMEX crude oil hedges through 2012 as
follows:
|
|
Volume
|
|
Swap
Price
|
|
|
|
Bbl
/ day
|
|
$
per Bbl
|
|
May
- Dec 2008:
|
|
|
150
|
|
$
|
106.85
|
|
2009:
|
|
|
150
|
|
$
|
102.10
|
|
2010:
|
|
|
150
|
|
$
|
99.90
|
|
2011:
|
|
|
150
|
|
$
|
98.55
|
|
2012:
|
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|
150
|
|
$
|
98.25
|
|
EV
Energy
Partners, L.P., based in Houston, Texas, is a master limited partnership engaged
in acquiring, producing and developing oil and gas properties. More information
about EVEP is available on the internet at
www.evenergypartners.com
.
(code
#:
EVEP/G)
This
press release may include "forward-looking statements" as defined by the
Securities and Exchange Commission. All statements, other than statements of
historical facts, included in this press release that address activities, events
or developments that the partnership expects, believes or anticipates will
or
may occur in the future are forward-looking statements. These statements are
based on certain assumptions made by the partnership based on its experience
and
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate in the circumstances.
Such statements are subject to a number of assumptions, risks and uncertainties,
many of which are beyond the control of the partnership, which may cause our
actual results to differ materially from those implied or expressed by the
forward-looking statements. These include risks relating to financial
performance and results, availability of sufficient cash flow to pay
distributions and execute our business plan, prices and demand for natural
gas
and oil, our ability to replace reserves and efficiently develop our current
reserves and other important factors that could cause actual results to differ
materially from those projected as described in the Company's reports filed
with
the Securities and Exchange Commission.
The
United States Securities and Exchange Commission permits oil and gas companies,
in their filings with the SEC, to disclose only proved reserves that a company
has demonstrated by actual production or conclusive formation tests to be
economically and legally producible under existing economic and operating
conditions at oil and gas prices in effect at the time of the estimate, without
future escalation. We include in this press release an estimate of net proved
reserves using strip prices, rather than prices at the time of the estimate,
that the SEC's guidelines strictly prohibit us from including in filings with
the SEC. Investors are urged to consider closely the disclosure in our Form
10-K, available from us at
www.evenergypartners.com
or from
the SEC at
www.sec.gov
.
SOURCE:
EV Energy Partners, L.P.
EV
Energy
Partners, L.P., Houston
Michael
E. Mercer, 713-651-1144
http://www.evenergypartners.com
Copyright
Business Wire 2008