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Memorial Production Partners LP Announces Second Quarter 2012 Results, Updated Commodity Hedge Positions And Updated 2012 Guidance

Stocks in this article: MEMP

Hedge Summary Table

  July 2012 -   Year Ending December 31, Jan 2017 -
  Dec-12 2013 2014 2015 2016 Sep 2017
             
Natural Gas Derivative Contracts:            
Swap contracts:            
Volume (MMBtu/d) 22,229 36,499 40,221 36,420 33,550 30,992
Weighted-average fixed price $4.50 $4.45 $4.43 $4.35 $4.56 $4.33
Collar contracts:            
Volume (MMBtu/d) 18,913 6,674 - - - -
Weighted-average ceiling price $5.87 $5.80 - - -   -
Weighted-average floor price $4.83 $5.07 - - - -
Put options:            
Volume (MMBtu/d) 2,283 - - - - -
Weighted-average floor price $4.80  - - - - -
Total natural gas volumes hedged (MMBtu/d) 43,425 43,173 40,221 36,420 33,550 30,992
Total weighted-average fixed/floor price $4.66 $4.54 $4.43 $4.35 $4.56 $4.33
Percent of target production hedged 87.6% 87.0% 81.1% 73.4% 67.8% 62.5%
             
Crude Oil Derivative Contracts:            
Swap contracts:            
Volume (Bbl/d) 155 152 176 264 246 247
Weighted-average fixed price $98.63 $99.53 $89.99 $90.93 $91.03 $87.75
Collar contracts:            
Volume (Bbl/d) 147 156 105 - - -
Weighted-average ceiling price $115.12 $116.94 $117.72 - - -
Weighted-average floor price $86.67 $87.16 $90.00 - - -
Total crude oil volumes hedged (Bbl/d) 302 308 281 264 246 247
Total weighted-average fixed/floor price $92.81 $93.26 $89.99 $90.93 $91.03 $87.75
Percent of target production hedged 81.8% 83.6% 76.2% 71.6% 67.0% 67.0%
             
Natural Gas Liquids Derivative Contracts:            
Swap contracts:            
Volume (Bbl/d) 356 477 - - - -
Weighted-average fixed price $44.93 $52.94 - - - -
Collar contracts:            
Volume (Bbl/d) 124 - - - - -
Weighted-average ceiling price $93.57 - - - - -
Weighted-average floor price $75.16 - - - - -
Total NGL volumes hedged (Bbl/d) 480 477 - - - -
Total weighted-average fixed/floor price $52.73 $52.94 - - - -
Percent of target production hedged 56.1% 55.7% 0.0% 0.0% 0.0% 0.0%

As of July 1, 2012, MEMP has entered into the following interest rate derivative hedging transactions:

  • MEMP has hedged $150.0 million or 75% of its variable rate exposure on its $199 million debt outstanding as of August 1, 2012 over a 5-year term ending December 14, 2016 at a weighted average fixed annual LIBOR rate of 1.12%.

Additional information regarding MEMP's hedging summary can be found on its website, www.memorialpp.com , under the Investor Relations section.

Updated 2012 Guidance

The following guidance is subject to the cautionary statements and limitations described under the "Forward-Looking Statements" caption at the end of this press release. MEMP's 2012 guidance has been updated to reflect actual changes in commodity prices and the impact of growth capital spending and takes into account the impact of the oil and gas producing properties acquired in the second quarter, including those considered transactions between entities under common control. A summary of the guidance, assuming no additional acquisitions, is presented below:

Full Year 2012 Guidance  
   
Annual Production (Bcfe)  20 - 21
   
Adjusted EBITDA ($MM)  $69 - $71
   
Distributable Cash Flow ($MM)  $52 - $54
   
DCF Coverage 1.2x - 1.3x
   
Maintenance Capex ($MM)  $11.8
   
Growth Capex ($MM)  $6 - $9

These estimates and assumptions reflect management's best judgment based on current expectations about the future and anticipated market conditions based upon both stated and unstated assumptions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks that are beyond MEMP's control. Actual conditions and assumptions may change over the course of the year.

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