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HOUSTON, Oct. 1, 2012 (GLOBE NEWSWIRE) -- Memorial Production Partners LP (Nasdaq:MEMP) announced today that it has closed its previously announced acquisition of oil and natural gas properties in East Texas from Goodrich Petroleum Corporation for $93.2 million, subject to customary post-closing adjustments. The acquisition was funded with borrowings under MEMP's existing credit facility. The effective date for this transaction is July 1, 2012.
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. In conjunction with the closing of the acquisition, the board of directors of its general partner approved a cash distribution of $0.495 per unit for the third quarter of 2012. This distribution represents an annualized amount of $1.98 per unit and a $0.06 annualized increase over the second quarter annualized distribution of $1.92 per unit and will be paid on November 12, 2012 to unitholders of record as of the close of business on November 1, 2012.
"We are pleased to announce our second distribution increase which represents a 4.2% increase over the annualized minimum quarterly distribution of $1.90 per unit," said John A. Weinzierl, Chairman, President and Chief Executive Officer of the general partner of MEMP. "This increase is a reflection of the $178 million of assets we have acquired so far this year that provide MEMP with a long-lived, predictable production profile and an inventory of low risk development projects that will supplement our production in the years to come."
Consistent with its hedging policy, MEMP executed additional commodity price hedges for a significant portion of its expected oil and natural gas production acquired in this transaction in order to reduce the impact to cash flows from commodity price fluctuations.
The following trades were executed in relation to this acquisition:
NYMEX Henry Hub
NGPL TexOk Basis
Normal Butane (NC4)
Natural Gasoline (C5+)
Updated 2012 Guidance
The following guidance is subject to the cautionary statements and limitations described under the "Forward-Looking Statements" caption at the end of this press release. MEMP's 2012 guidance has been updated to reflect actual changes in commodity prices and the impact of growth capital spending and takes into account the impact of the oil and gas producing properties acquired throughout the year, including those considered transactions between entities under common control. A summary of the guidance, assuming no additional acquisitions, is presented below:
Full Year 2012 Guidance
Annual Production (Bcfe)
21 – 22
Adjusted EBITDA ($MM) (1)
$76 – $78
Distributable Cash Flow ($MM) (1)
$56 – $58
1.25x – 1.35x
Maintenance Capex ($MM)
Growth Capex ($MM)
$4 – $7
These estimates 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 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.