8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 30, 2012

Constellation Energy Partners LLC

(Exact name of registrant as specified in its charter)

Delaware	001-33147	11-3742489
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1801 Main Street, Suite 1300 Houston, TX	77002
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (832) 308-3700

Not applicable

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

To the extent applicable, the information included in Item 7.01 of this Form 8-K is incorporated herein by reference.

Item 7.01 Regulation FD Disclosure.

On July 30, 2012, Constellation Energy Partners LLC (the “Company”) issued a press release providing an update on its 2012 capital plan and Mid-Continent drilling activity. The Company also announced that it will host a conference call at 3:00 p.m. (CDT) on Thursday, August 9, 2012, to discuss second quarter 2012 earnings and the drilling update provided today. Information on the Company’s website is not incorporated into this Form 8-K by reference.

The Company has prepared an investor presentation relating to the Company’s 2012 drilling activity, which is furnished as Exhibit 99.1 hereto and incorporated herein by reference.

A copy of the press release is furnished and attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated into this Item 7.01 by reference.

In accordance with General Instruction B.2 of Form 8-K, the information set forth in this Item 7.01 and in Exhibits 99.1 and 99.2 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, unless the Company specifically states that the information is to be considered “filed” under the Exchange Act or incorporates it by reference into a filing under the Exchange Act or the Securities Act of 1933, as amended.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit Number	Description
99.1	Investor Presentation—2012 Drilling Update
99.2	Press Release dated July 30, 2012.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CONSTELLATION ENERGY PARTNERS LLC
Date: July 30, 2012	By:	/s/ CHARLES C. WARD
		Charles C. Ward     Chief Financial Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Investor Presentation—2012 Drilling Update
99.2	Press Release dated July 30, 2012.

EX-99.1

Constellation Energy Partners LLC

2012 Drilling Update

July 2012

Exhibit 99.1

2

Forward-looking Statements Disclaimer

This presentation 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 volatility of realized oil and natural gas prices; the conditions of

the capital markets, inflation, interest rates, availability of a credit facility to support business requirements, liquidity, and

general economic and political conditions; the discovery, estimation, development and replacement of oil and natural gas

reserves; our business, financial, and operational strategy; our drilling locations; technology; our cash flow, liquidity and financial

position; the ability to extend or refinance our reserve-based credit facility; the level of our borrowing base under our reserve-

based credit facility; the resumption or amount of our cash distributions; our hedging program and our derivative positions; our

production volumes; our lease operating expenses, general and administrative costs and finding and development costs; the

availability of drilling and production equipment, labor and other services; our future operating results; our prospect development

and property acquisitions; the marketing of oil and natural gas; competition in the oil and natural gas industry; the impact of the

current global credit and economic environment; the impact of weather and the occurrence of natural disasters such as fires,

floods, hurricanes, tornados, earthquakes, snow and ice storms and other catastrophic events and natural disasters; governmental

regulation, including environmental regulation, and taxation of the oil and natural gas industry; developments in oil-producing and

natural gas producing countries; lack of support from a sponsor or a change in sponsor; and our strategic plans, objectives,

expectations, forecasts, budgets, estimates and intentions for future operations.  In some cases, forward–looking statements can

be identified 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 presentation 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.  Management cautions all readers that the forward–looking statements contained

in this presentation are not guarantees of future performance, and we cannot assure any reader that such statements will be

realized or the forward–looking events and circumstances will occur.  Actual results may differ materially from those anticipated

or implied in the forward–looking statements due to factors listed in the “Risk Factors” section in our SEC filings and elsewhere in

those filings.  All forward–looking statements speak only as of the date of this presentation. We do not intend to publicly update

or revise any forward–looking statements as a result of new information, future events or otherwise.  These cautionary statements

qualify all forward-looking statements attributable to us or persons acting on our behalf.

3

*

Excludes hedge settlements, gains (losses) on mark-to-market activities, and other revenue

Continuing Focus on Oil Opportunities

•

Since late 2010, our capital program has been focused on the oil potential we see in our

existing asset base and our most capital efficient recompletion opportunities

•

As a result of this focus, oil has become an increasingly important part of our production

mix, and our oil reserves nearly doubled from 2010 to 2011

•

The company forecasts capital spending of between $15.0 million and $19.0 million in

2012

•

We forecast that oil will account for about 7% of our production mix and about 33% of our

sales revenue in 2012

*

4

Path to Increased Oil Production

Investment in the Central Kansas Uplift

Focus on oil opportunities begins

Drilling curtailed

5

•

Significant footprint in the Cherokee Basin

•

Approximately 725,000 net acres

•

More than 2,250 net producing wells

•

Among the largest natural gas producers in the basin

•

Largest concession in Osage County

•

Term extends through 2020

•

Grants us exclusive coalbed methane and shale rights on over 560,000 acres

•

Current production encompasses 80,000 acres held by production, which includes

24,000 acres held by production that extend to all rights, all depths

•

Overlapping concessions are subject to rights granted under our concession

•

Existing infrastructure (gas gathering, water handling facilities)  supports further growth

in Mid-Continent

•

Infill and step-out opportunities, which facilitate lower-cost exploitation

•

Drilling inventory of conventional oil and gas add-on opportunities which include

horizontal and Mississippian potential

Relative Advantage in Mid-Continent

6

Footprint in the Cherokee Basin

7

2012 Drilling Program

19

Total Program

At June 30, 2012

Capital Expenditures

$6.9 MM   

Net Wells and Recompletions

48

Daily Average Oil Production (June 2012)

146 Bbls

Daily Average Gas Production (June 2012)

228 Mcf

Capital Efficiency

$37,356 / boepd

•

Drilling and recompletion activity is currently focused on oil potential in CEP’s existing

asset base in the Cherokee Basin, with plans primarily targeting production from the

Bartlesville, Skinner, Red Fork, Burgess and Mississippian zones

•

Activity also targets the Mississippian trend, where the company is currently

completing four of 18 vertical wells planned during 2012 in the Bulldog, Bull Creek,

Bluestem, Queen Anne, Coshehe, and Sand Creek projects in Osage County

•

Well costs are generally expected to range between $175,000 and $375,000 each

depending on depth and completion zones, with a 20% rate of return possible at prices

that range between $40/Bbl and $70/Bbl, respectively

•

The following table summarizes program results for the net wells and recompletions

completed during the six months ended June 30, 2012:

Oil Type Curve

19

10

100

1,000

0

12

24

36

48

60

Month

Type Well

Average Well

Performance

from

2011 Drilling Program

IP  12.7 Bopd

EUR  12 Mbo

8

Appendix

Black Warrior Basin

Cherokee Basin

Other Basins

•

Proved reserves: 90 Bcfe

-

Proved developed as a % of total proved:  88%

-

100% natural gas

•

Net producing wells: 507

•

Net acres: over 43,000

•

Average working interest:  100%

•

Average net revenue interest: 75%

•

Pricing: SONAT Inside FERC

•

Proved reserves: 136 Bcfe

-

Proved developed as a % of total proved: 60%

-

Natural gas:  131 Bcfe (96%)

-

Oil:  860 MBbl  (4%)  

•

Net producing wells: 2,261

•

Net acres: over 725,000

•

Average working interest: 100% operated,

50% non-operated

•

Average net revenue interest: 80% operated,

40% non-operated

•

Pricing: ONEOK, Southern Star, CEGT East, NGP

MidCon, PEPL

•

Proved reserves: ~ 6.3 Bcfe

-

Proved developed as a % of total proved:  99%

-

Natural gas:  5.8 Bcfe (92%)

-

Oil:  83 MBbl (8%)

•

Net producing wells: 17

•

Net Acres: over 1,000 

•

Non-operated

•

Average working interest: 14%

•

Average net revenue interest: 11%

•

Pricing: CEGT East (Woodford Shale);

WTI (Central Kansas Uplift)

10

Portfolio Summary

Portfolio

•

Total reserves: 528 Bcfe

•

Production Mix:  95% natural gas; 5% oil

•

Daily net production: Approximately 35.3 MMcfe

•

Decline rate: 13% to 15%, natural gas; 10% to 50%, oil

•

Net producing wells: 2,785

•

Net acres: Over 769,000

•

Spacing: 40, 80, 160 acre

•

Well costs: $170,000 to $500,000

•

Recompletion costs: $45,000 to $65,000

•

Initial daily production rates (for natural gas wells, after dewatering):

•

Dewatering:  3 to 6 months, natural gas wells

•

Days to drill:  2 to 3 days

•

Days to complete:  2 to 6 days

•

Hook up to flow:  60 to 90 days, natural gas wells; 30 to 60 days, oil wells

•

Well depths:  500 to 4,900 feet

Statistics as of December 31, 2011; reserve values are estimates based on forward prices on December 31, 2011; numbers may not add due to rounding

-

Vertical –

40 to 75 Mcfe, natural gas wells; 1 to 40 Bbl, oil wells

-

Horizontal –

70 to 100 Mcfe, natural gas wells

-

Recompletions –

10 to 20 Mcfe, natural gas wells; 1 to 15 Bbl, oil wells

-

Proved reserves:  232 Bcfe (227 Bcfe natural gas; 943 MBbl oil)

Proved developed as a % of total proved reserves: 72%

Proved reserve to production ratio: 18.0 years

-

Probable reserves:  159 Bcfe (158 Bcfe natural gas; 275 MBbl oil)

-

Possible reserves:  137 Bcfe (100% natural gas)

EX-99.2

EXHIBIT 99.2

Press Release

Contact: Charles C. Ward

   (877) 847-0009

Constellation Energy Partners Provides Mid-Year

Drilling Update and Schedules Conference

Call to Discuss Second Quarter 2012 Results

HOUSTON—(BUSINESS WIRE)—July 30, 2012—Constellation Energy Partners LLC (NYSE MKT: CEP) today provided an update on its 2012 capital plan and Mid-Continent drilling activity.

The company’s drilling and recompletion activity is currently focused on oil potential in CEP’s existing asset base in the Cherokee Basin, with plans primarily targeting production from the Bartlesville, Skinner, Red Fork, Burgess and Mississippian zones. Activity also targets the Mississippian trend, where the company is currently completing four of 18 vertical wells planned during 2012 in the Bulldog, Bull Creek, Bluestem, Queen Anne, Coshehe, and Sand Creek projects in Osage County. Well costs are generally expected to range between $175,000 and $375,000 each depending on depth and completion zones.

The company forecasts capital spending of between $15.0 million and $19.0 million in 2012. For the six months ended June 30, 2012, CEP completed 48 net wells and recompletions with an additional 24 net wells and recompletions in progress. Capital spending during that period totaled $6.9 million.

Gross production for the wells and recompletions completed during the first six months of 2012 averaged 146 Bbls of oil and 228 Mcf of natural gas per day (or 184 BOE on a combined basis) in June 2012.

Additional detail on the company’s 2012 drilling activity has been posted on CEP’s Web site (www.constellationenergypartners.com) under the Investor Relations page.

The company also announced that it will host a conference call at 3:00 p.m. (CDT) on Thursday, August 9, 2012 to discuss second quarter 2012 results, including today’s drilling update. The company expects to release its second quarter 2012 earnings before the market opens that day.

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To participate in the conference call, analysts, investors, media and the public in the U.S. may dial (800) 857-0653 shortly before 3:00 p.m. (CDT). The international phone number is (773) 799-3268. The conference password is PARTNERS.

A replay will be available beginning approximately one hour after the end of the call by dialing (866) 408-8468 or (203) 369-0640 (international). A live audio webcast of the conference call, presentation slides and the earnings release will be available on CEP’s Web site under the Investor Relations page. The call will also be recorded and archived on the site.

Constellation Energy Partners LLC is a limited liability company focused on the acquisition, development and production of oil and natural gas properties, as well as related midstream assets.

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