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Memorial Production Partners LP To Acquire Oil And Gas Properties And Announces Increased Borrowing Base Of $380 Million

HOUSTON, Sept. 18, 2012 (GLOBE NEWSWIRE) -- Memorial Production Partners LP (Nasdaq:MEMP) announced today that it has signed a definitive agreement to acquire certain oil and natural gas properties in East Texas from Goodrich Petroleum Corporation, for a purchase price of $95 million, subject to customary purchase price adjustments. The transaction is expected to close on or about September 28, 2012, subject to customary approvals and closing conditions, and will be financed with borrowings under MEMP's existing credit facility. The effective date for this transaction is July 1, 2012. These properties are located in the South Henderson field of Rusk County, Texas.

The acquisition is expected to be immediately accretive to both distributable cash flow per unit and net asset value per unit while improving MEMP's operating margin. Management will evaluate the impact of the acquisition on current distribution levels as it integrates these acquired assets. Additionally, MEMP will provide updated 2012 production and financial guidance in conjunction with the closing of the transaction. 

"This is our fourth transaction since our IPO, which demonstrates our commitment to grow MEMP through strategic acquisitions and provides MEMP with predictable, low operating cost and long-lived production," said John A. Weinzierl, Chairman, President and Chief Executive Officer of the general partner of MEMP.  "We also appreciate the ongoing support and contributions to our growth from our banks since our formation," Weinzierl added.

Operational highlights of the transaction:

  • Estimated net proved reserves of approximately 139 Bcfe
  • 22% proved developed reserves
  • Proved reserve to production ratio of approximately 30 years
  • Current net production of approximately 12.6 MMcfe per day, of this amount, approximately 62% is natural gas and 38% is oil and natural gas liquids
  • Producing wells: 42 gross (40 net), average working interest of 96%, which will be 95% operated by MEMP
  • Approximately 8,450 gross acres (7,120 net), all of which is held by production
  • 25 gross (19 net) current proved undeveloped horizontal drilling locations in the Cotton Valley formation

Financial highlights of the transaction:

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