This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Memorial Production Partners LP To Acquire Oil And Gas Properties, Announces Distribution Increase, Borrowing Base Increase And Updated 2013 Guidance

Stocks in this article: MEMP

HOUSTON, March 18, 2013 (GLOBE NEWSWIRE) -- Memorial Production Partners LP (Nasdaq:MEMP) announced today that it has signed a definitive agreement to acquire certain oil and gas producing properties in East Texas and North Louisiana from its sponsor, Memorial Resource Development LLC, for a purchase price of $200 million, which includes $4 million of net working capital and other customary purchase price adjustments. The transaction will have an effective date of January 1, 2013 and is expected to close in March 2013. Terms of the transaction were approved by the Board of Directors of the general partner of MEMP and by the Board's conflicts committee, which is comprised entirely of independent directors.

Subject to the closing of this transaction, the Board of Directors of MEMP's general partner approved an increase in the distribution rate to $0.5125 per unit for the first quarter of 2013. This distribution rate will represent an annualized amount of $2.05 per unit and a 7.9% increase over the annualized minimum quarterly distribution of $1.90 per unit, as well as a 1.0% increase over the fourth quarter annualized distribution of $2.03 per unit.

The acquired properties represent additional working interests in MEMP's existing 697 gross (196 net) wells located in the Carthage, Minden, and Spider fields in Rusk and Panola Counties in East Texas and DeSoto Parish in North Louisiana. MEMP will operate approximately half of the producing wells and 80% of the PDP reserves.

Transaction Highlights

  • Expected to be immediately accretive to distributable cash flow
  • Third-party estimated net proved reserves of 162 Bcfe (65% proved developed)
  • December net production of approximately 21 MMcfe/d (66% natural gas and 34% liquids)
  • Proved reserve to production ratio of 21 years
  • Assets exhibit a stable long-lived production profile with a projected average annual proved developed producing decline rate of approximately 8%
  • Approximately 68,758 gross (29,778 net) acres, over 99% of which is held by production
  • Assets have high operating margins and moderate capital expenditure requirements
  • Significant percentage of acquired production is hedged through 2018
  • Revising 2013 EBITDA guidance range to $154 - $158 million from the previously announced $120 - $124 million
  • Revising 2013 Distributable Cash Flow guidance range to $98 - $104 million from the previously announced $78 - $82 million

John A. Weinzierl, Chairman, President and Chief Executive Officer of the general partner of MEMP, commented, "We are pleased to announce another acquisition consistent with our proven strategy of acquiring mature, long-life producing properties. These assets strengthen MEMP's core operating areas in East Texas and North Louisiana and provide MEMP with a significant inventory of low cost development opportunities. Approximately 67% of our pro forma proved reserves will be located in East Texas and North Louisiana. Additionally, we are excited to announce, subject to the closing of this transaction, a distribution rate increase to $0.5125 per unit for the first quarter of 2013."

1 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs