EXHIBIT 5.1
October 25, 2002
Encore Acquisition Company
EAP Energy, Inc.
EAP Operating, Inc.
Encore Operating, L.P.
EAP Energy Services, L.P.
777 Main Street, Suite 1400
Fort Worth, Texas 76102
EAP Properties, Inc.
1209 Orange Street
Wilmington, Delaware 19801
Re: Registration Statement on Form S-4 (Registration No. 333-99557)
Ladies and Gentlemen:
This firm has acted as counsel to Encore Acquisition Company, a
Delaware corporation (the "Company") and the following "Subsidiary Guarantors":
EAP Energy, Inc., a Delaware corporation ("EAP Energy"), EAP Operating, Inc., a
Delaware corporation ("EAP Operating"), EAP Properties, Inc., a Delaware
corporation ("EAP Properties," together with EAP Energy and EAP Operating, the
"Corporate Guarantors"), Encore Operating, L.P., a Texas limited partnership
("Encore Operating") and EAP Energy Services, L.P., a Texas limited partnership
("Energy Services," together with Encore Operating, the "Partnership
Guarantors") in connection with the filing of a registration statement on Form
S-4 (the "Registration Statement") with the Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended (the "Act"), for (i) the
proposed offer by the Company to exchange (the "Exchange Offer") all outstanding
8 3/8% Senior Subordinated Notes due 2012 (the "Original Notes") of the Company
for new 8 3/8% Senior Subordinated Notes due 2012 (the "Exchange Notes") of the
Company and (ii) guarantees of the Exchange Notes (the "Subsidiary Guarantees")
by the Subsidiary Guarantors. The Original Notes have been, and the Exchange
Notes will be, issued pursuant to an Indenture (the "Indenture"), dated as of
June 25, 2002, among the Company, Wells Fargo Bank, N.A., as Trustee, and the
Subsidiary Guarantors.
Encore Acquisition Company
October 25, 2002
Page 2 of 4
In connection with this opinion, we have reviewed all documents that we
consider necessary, in our professional judgment, to render the opinions
expressed herein. We have assumed that: (i) all documents submitted to or
reviewed by us, including all amendments and supplements thereto, are accurate
and complete and, if not originals, are true and correct copies of the
originals; (ii) the signatures on each of such documents by the parties thereto
are genuine; (iii) each individual who signed such documents had the legal
capacity to do so; and (iv) all persons who signed such documents on behalf of a
corporation were duly authorized to do so. We have assumed that there are no
amendments, modifications or supplements to such documents other than those
amendments, modifications and supplements that are known to us.
Based on the foregoing, and subject to the limitations and
qualifications set forth herein, we are of the opinion that:
1. The Company and the Corporate Guarantors were incorporated,
exist and are in good standing under the laws of the State of
Delaware, and the Partnership Guarantors were formed and exist
as limited partnerships under the laws of the State of Texas.
2. The issuance of the Exchange Notes has been duly authorized by
the Company and, upon the due execution, authentication and
delivery of the Exchange Notes in accordance with the terms of
the Indenture against the exchange of the Original Notes in
accordance with the terms and conditions set forth in the
Prospectus constituting a part of the Registration Statement,
the Exchange Notes will be validly issued.
3. When (i) the Registration Statement becomes effective under
the Act and the Indenture has been qualified under the Trust
Indenture Act of 1939, as amended, and (ii) the Exchange Notes
have been duly executed, sealed and authenticated in
accordance with the terms of the Indenture and have been
issued and delivered upon consummation of the Exchange Offer
against receipt of the Original Notes surrendered in exchange
therefor in accordance with the terms of the Exchange Offer,
the Exchange Notes will constitute valid and legally binding
obligations of the Company, entitled to the benefits of the
Indenture and enforceable in accordance with the terms of the
Indenture except (a) as the enforceability thereof may be
limited by bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium, or other similar laws now or hereinafter
in effect relating to or affecting the enforcement of
creditor's rights generally and (b) the availability of
equitable remedies may be limited by equitable principles of
general applicability (regardless of whether considered in a
proceeding at law or in equity).
4. (a) The Subsidiary Guarantee by each Corporate Guarantor has
been duly authorized by each of such Corporate Guarantors and
(b) the Subsidiary Guarantee by each Partnership Guarantor has
been duly authorized on behalf of
Encore Acquisition Company
October 25, 2002
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such Partnership Guarantor by its respective general partner,
and when (i) the Registration Statement becomes effective
under the Act and the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended, and (ii) the Exchange
Notes have been duly executed, sealed and authenticated in
accordance with the terms of the Indenture and have been
issued and delivered upon consummation of the Exchange Offer
against receipt of the Original Notes surrendered in exchange
therefor in accordance with the terms of the Exchange Offer,
and the Subsidiary Guarantees have been executed by each of
the Corporate Guarantors and the Partnership Guarantors and
attached thereto in accordance with the terms of the Indenture
and delivered in accordance with the Exchange Offer, each such
Subsidiary Guarantee will constitute the valid and binding
obligation of each of the Corporate Guarantors and the
Partnership Guarantors, entitled to the benefits of the
Indenture and enforceable in accordance with the terms of such
Subsidiary Guarantee except (A) as the enforceability thereof
may be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium, or other similar laws now or
hereinafter in effect relating to or affecting the enforcement
of creditor's rights generally and (B) the availability of
equitable remedies may be limited by equitable principles of
general applicability (regardless of whether considered in a
proceeding at law or in equity).
This opinion is further limited and qualified in all respects as
follows:
A. This opinion is specifically limited to matters of the
existing laws of the States of Texas and Delaware and the laws of the
United States of America; provided, however, that the opinion in
numbered paragraph 2 relating to provisions of the Indenture and the
opinions in numbered paragraphs 3 and 4 relating to the enforceability
of the Exchange Notes and Subsidiary Guarantees are each limited solely
to the existing laws of the State of New York. Except as expressly
stated in the foregoing sentence, we express no opinion as to the
applicability of the laws of any other particular jurisdiction to the
transactions described in this opinion.
B. This opinion is limited to the specific opinions stated
herein, and no other opinion is implied or may be inferred beyond the
specific opinions expressly stated herein.
C. This opinion is based on our knowledge of the law and facts
as of the date hereof. We assume no duty to update or supplement this
opinion to reflect any facts or circumstances that may hereafter come
to our attention or to reflect any changes in any law that may
hereafter occur or become effective.
We hereby consent to the use of this opinion in the above-referenced
Registration Statement. In giving such consent, we do not admit that we come
within the category of persons
Encore Acquisition Company
October 25, 2002
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whose consent is required under Section 7 of the Act, or the rules and
regulations of the Securities and Exchange Commission promulgated thereunder.
Respectfully submitted,
/s/ KELLY, HART & HALLMAN
KELLY, HART & HALLMAN
(a professional corporation)