SecProbe.io

CORRESP
1
filename1.htm

corresp

    1717 Main Street, Suite 3700

Dallas, Texas 75201

214.659.4400 Phone

214.659.4401 Fax

andrewskurth.com

    Joseph A. Hoffman

214 659.4593 Phone

214 659.4861 Fax

jhoffman@andrewskurth.com

November 17, 2005

U.S. Securities and Exchange Commission

Division of Corporate Finance

Mail Stop 7010

450 Fifth Street, N.W.

Washington, DC 20549-7010

    Re:

    Sabine Production Partners, LP

    Registration Statement on Form S-4

    File No. 333-127203

    Filed October 7, 2005

Ladies and Gentlemen:

          On behalf of Sabine Production Partners, LP (the “Partnership”), we have electronically
transmitted herewith Amendment No. 2 to the above referenced Registration Statement (“Amendment No.
2”), which has been marked to indicate the changes effected by this amendment. In addition, we
have today forwarded, by way of overnight delivery, six (6) marked copies of Amendment No. 2, c/o
Mellissa Campbell Duru, for the convenience of the Staff.

          This letter responds to the Staff’s letter of comment, dated October 27, 2005, on behalf of
the Partnership. The numbering below corresponds to the numbering used in the comment letter.

          Also, as indicated at the end of this letter, we intend to contact the Staff on Monday or
Tuesday of next week to discuss the practicality of declaring this Registration Statement effective
by the close of business on Wednesday, November 23, 2005.

Form S-4

General

    1.

    COMMENT:

    We remind you of prior comments 1, 2 and 3.

    RESPONSE:

    •

    The Partnership has made parallel changes to the affected disclosure.

    •

    Updated and current disclosure has been provided throughout the prospectus.

    •

    All previously omitted exhibits have been filed.

Austin       Dallas       Houston       London       Los Angeles       New York       The Woodlands       Washington, DC

U.S. Securities and Exchange Commission

November 17, 2005

Page 2

    2.

    COMMENT:

    Please monitor the need to include updated financial statements.

    RESPONSE:

    The Partnership has included updated financial statements.

    3.

    COMMENT:

    We note your response to prior comment 5. Include a bullet point listing of the principal
risks on the cover page, and revise the cover page to limit it to one page. Also remove the
tabular disclosure that currently appears on the second page.

    RESPONSE:

    The Partnership has made the Staff’s requested changes including moving the principal risks
to the cover page and limiting the cover to a single page. We intend to utilize the inside
front cover for graphics previously submitted. The tabular disclosure has been eliminated
from the prospectus/proxy statement and moved to the unit holder letters.

    4.

    COMMENT:

    Ensure that your footnotes have an appropriate point of reference that your tables include
correct and unambiguous headings. For example, you include “footnotes” at pages 100 and 101,
but the table in each case does not include the referenced numbers. Also, column headings at
page 100 (referring to 2004) and page 101 (the last two headings are identical) appear to
require revision or further clarification.

    RESPONSE:

    The Partnership has corrected the errors in the column headings and footnotes. The subject
tables have been reworked (pages 96, 97 and 98).

    5.

    COMMENT:

    You will expedite our review by indicating precisely where you have made responsive changes.
For example, it is unclear where you made changes responsive to second sentence of prior
comment 13 and where you made the changes you reference in the second and third sentences of
your response to prior comment 44. We restate the first sentence of prior comment 25, as we
could find no disclosure directly responsive to that item. With regard to prior comment 28,
we note that the Risk Factors section now fills 29 pages. Please address each of these
points in your response.

U.S. Securities and Exchange Commission

November 17, 2005

Page 3

    RESPONSE:

    •

    Prior Comment 13. The response to the Staff’s comment to the second sentence
of prior Comment 13 is found on pages 33 (last bullet to the “We may not have
sufficient cash to enable us to pay the minimum monthly distribution” Risk Factor and
page 104 (first paragraph under “Operation Stage—Payment to our General Partner and
its affiliates”). Clarifying disclosure is now also provided in the unit holder letters
and on pages 22, 33, and 154.

    •

    Prior Comment 44. Please see “Waiver/Satisfaction of Conditions” on page 75
for expanded disclosure.

    •

    Prior Comment 25. The Partnership has disclosed that if the Partnership’s
operating surplus in a particular measurement period were zero or negative, the minimum
distribution amount could be reduced to zero upon the exercise of the reset option
(pages 24 and 100).

    •

    Prior Comment 28. The Partnership has carefully reviewed the Risk Factor
disclosures and believes each Risk Factor is appropriate, necessary and material to an
investment decision. The Partnership did reduce the original Risk Factors disclosures
by more than one page, but added three additional pages of Risk Factors as suggested by
the Staff’s initial comments. Based upon the Trustee’s disclosure of the impact of
Hurricanes Katrina and Rita on SRT in SRT’s Form 10-Q for the quarter ended September
30, 2005, we have deleted the Risk Factor on those storms.

Explanatory Note

    6.

    COMMENT:

    We note your response to prior comment 12. You indicate that you will provide additional
soliciting materials to all applicable holders to the extent there is a fundamental change
in the prospectus/proxy statement. We remind you of your obligation to provide additional
soliciting materials in the event of a material change in the statements made, as you
acknowledge on page 65. See Rule 14a-9. Please confirm your understanding in this
regard.

    RESPONSE:

    The Partnership understands its obligations to provide additional soliciting interests to
all applicable holders in the event of a material change in the statements made.

Partnership’s Form of Notice of Meeting of Unit Holders

    7.

    COMMENT:

    We note your response and revisions to prior comment 39. Please ensure that consistent
changes have been made throughout the proxy statement/prospectus, including the Notice of
Meeting and Letter to Shareholders, to reflect the new proposal 4.

U.S. Securities and Exchange Commission

November 17, 2005

Page 4

    RESPONSE:

    The Partnership has made changes throughout the proxy statement (e.g., letter to accompany
solicitation date proxy only, letter to accompany record date proxy only, and notice of
meeting) to reflect new proposal 4.

Prospectus Cover Page

    8.

    COMMENT:

    Ensure that your disclosure is balanced and complete. For example, it appears more complete
to disclose that you expect administrative costs to be higher than in the past, rather than
suggesting that they will be “relatively comparable” to historic administrative costs.

    RESPONSE:

    The Partnership has re-examined the prospectus/proxy statement to ensure that it is balanced
and complete. Concerning the referenced disclosure, the Partnership has modified the
Registration Statement to reflect the fact that it anticipates administrative costs for the
reasonably foreseeable future to be relatively comparable to those of SRT for the year ended
December 31, 2005 (annualized) (unit holder letters and page 131).

    We note supplementally that, as disclosed by SRT in its Form 10-Q for the quarter ended
September 30, 2005, general and administrative costs for the first nine months of 2005 were
$1,644,950 (or, $2,193,267 on an extrapolated 12-month basis). The Partnership does not
believe that its G&A expense will exceed that amount.

    9.

    COMMENT:

    We note the new disclosure at page 88 and in footnotes 2 on page 100 and 101 regarding your
expectations about future administrative costs. Expand the new discussion at page 88 or
elsewhere to disclose the basis for such assumption in greater detail. See the fourth
sentence of prior comment 8.

    RESPONSE:

    The Partnership has added the disclosure on page 131 to provide the basis for our
assumptions.

Where you can you find more information, page 1

    10.

    COMMENT:

    The new disclosure in the third sentence of the third paragraph appears inappropriate.
Please revised accordingly.

    RESPONSE:

    The third sentence in the third paragraph has been removed (page 1).

U.S. Securities and Exchange Commission

November 17, 2005

Page 5

Questions and Answers About the Transaction, page 3

“Was an independent representative engaged on behalf of SRT unit holders...?”

    11.

    COMMENT:

    We note your response and revisions to prior comment 18. Please revise the discussion that
appears here and on page 71 to elaborate upon why you believe that “any fairness
determination that [you] would obtain or initiate from a valuation expert that [you] would
select would be of limited benefit.” Tell us whether this was solely a function of the cost
of obtaining an opinion or whether there are other reasons that form the basis for your
belief.

    RESPONSE:

    The Partnership has not attempted to obtain a fairness determination or valuation assessment
in connection with its pursuit of the proposed transaction. (Although it has held
preliminary discussions with valuation firms to determine a general cost likely to be
associated therewith.) However, we respectfully submit that, in our experience, fairness
determinations and valuation assessments, generally support the determination or assessment
of the party requesting the determination. Phrased differently, we believe that once a unit
holder properly “discounts” the value of the opinion for the fact that the valuation firm
was selected and the determination was requested and paid for by the Partnership, the “net”
value to unit holders is marginal. We also note that, in transactions of this nature,
investment bankers, valuation experts and others who provide such opinions, typically
attempt to limit the extent to which the ultimate recipients of such information (in this
case, the unit holders) can rely on the conclusions reached. As such, the Partnership has
concluded that the benefits to be obtained, if any, have been outweighed by the costs.
Moreover, if the transaction is consummated (the only scenario relevant to the unit
holders), the cost of obtaining the fairness opinion would be passed along to the surviving
entity and thus would otherwise reduce the amount available for distribution to them (pages
9-10 and 66).

    The Partnership has revised the disclosure to set forth these factors. As revised, the
Partnership believes that all relevant considerations have been accurately described.

“What is the likely date, time and place of the meeting should it be called?”

    12.

    COMMENT:

    You indicate here, and in the Letter to Shareholders and pages 65 and 66, that you do not
plan to deliver proxy cards authorizing you to call the meeting “until you have solicited
the affirmative vote of approximately 40% in interest of the SRT unit holders” (emphasis
added). Revise to indicate, as you have on page 13, that you will not deliver proxy cards
authorizing you to call the meeting “unless you have the affirmative vote of approximately
40% in interest of the SRT unit holders” (emphasis added).

    RESPONSE:

    The Partnership has made the requested revisions (unit holder letter and pages 11, 60 and
61).

U.S. Securities and Exchange Commission

November 17, 2005

Page 6

“Does delivery of an executed proxy card to call the meeting also give Sabine Production
Partners the right to vote my units at any subsequently called meeting?”

    13.

    COMMENT:

    See prior comment 21. We note your response, however, the comment was directed at the
language you use indicating that you have the right to vote units at any subsequently called
meeting. This implies that you may vote units at future meetings in addition to the special
meeting for which you are specifically seeking authorizations to call. Please remove this
implication and clarify that proxies may only be voted at the special meeting.

    RESPONSE:

    The Partnership has made the Staff’s requested revision (page 12).

Risk Factors, page 26

    14.

    COMMENT:

    We reissue prior comment 29 insofar as mitigating language remains (“To limit these risks”)
or has been added (“Although when exercising our reset option”).

    RESPONSE:

    The Partnership has attempted to remove all mitigating language from the Risk Factors
section (pages 28 and 44).

Unaudited Pro Forma Condensed Combined Financial Statements, page 57

    15.

    COMMENT:

    We have read your response to prior comment 37 and have further considered the propriety of
including pro forma combined financial statements in your absence of having adequate access
to the underlying financial records of Sabine Royalty Trust. We have concluded that, due to
your inability to obtain sufficient information to properly determine pro forma adjustments
that are factually supportable, as required by Regulation S-X, Rule 11-02(b)(6), you should
omit the unaudited pro forma condensed combined financial statements from your filing.
Disclosure should be made indicating why you are unable to comply with the requirements of
Regulation S-X, Rule 11-02. Additionally, please adjust any other disclosures that
previously included information derived from your pro forma financial statements, utilizing
in their place the historical information you have available, and clearly disclose why you
are using the historical information and your inability to determine pro forma information.

    RESPONSE:

    The Partnership has removed the pro forma financial statements and has included disclosure
under “Management’s Outlook and Future Partnership Financial Reporting Matters” indicating
why it is unable to comply with the requirements of Regulation S-X, Rule 11-02 (pages 81 and
82). The Partnership does not believe that it has made any other disclosures that
referenced information derived from the previously filed pro forma financial statements.

U.S. Securities and Exchange Commission

November 17, 2005

Page 7

The Meeting, page 65

Solicitation of Proxies, page 68

    16.

    COMMENT:

    Please remove your indication that you may solicit proxies by “electronic means” considering
your response to prior comment 40 indicates otherwise.

    RESPONSE:

    The Partnership has removed the indication that it may solicit proxies by “electronic
means.”

The Transaction, page 73

    17.

    COMMENT:

    See prior comment 43 and your revisions starting on page 76. Please briefly revise your
discussion to elaborate upon why it is not “free from doubt” that the affirmative vote to
eliminate the applicability of the prudent investor rule will significantly abrogate the
Trustee’s obligation to evaluate the fairness of the transaction.

    RESPONSE:

    The Partnership has revised its discussion and replaced the phrase “free from doubt” with
the phrase “while not previously subject to definitive judicial construction,” which it
believes to be more descriptive (pages 72 and 73).

Cash Distribution Policy, page 99

    18.

    COMMENT:

    Disclose the information you provide in the first sentence of the last paragraph on page 31
of your October 7 letter of response regarding the absence of an initial term for those
items.

    RESPONSE:

    The Partnership has provided the requested disclosure (page 94).

    19.

    COMMENT:

    We have read your response to prior comment 45 and have the following additional
suggestions:

U.S. Securities and Exchange Commission

November 17, 2005

Page 8

    •

    Though your proposed additional disclosure of the “rationale for