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