The following are the third-party estimated total proved reserves attributable to the oil and gas properties to be acquired in this transaction as of December 31, 2012.
In conjunction with the closing of this transaction, MEMP has secured commitments from its bank group to expand its borrowing base to $580.0 million from the previous $460.0 million under its $1.0 billion multi-year revolving credit facility consisting of 17 participating banks, subject to final documentation. MEMP has the ability to finance this transaction through borrowings under its revolving credit facility and a second lien facility for which it has received lender approval. MEMP may also seek an interim redetermination of its borrowing base prior to its next scheduled redetermination in October 2013 for any future acquisitions.Hedging Update As part of this transaction, MEMP will acquire commodity hedges that cover approximately 45% of acquired PDP volumes through 2015. In addition, MEMP will acquire interest rate hedges for a notional principal amount of $75.0 million extending through April 2014 at a fixed annual LIBOR rate of 1.51%. Consistent with its hedging policy, MEMP has layered on incremental commodity hedges that, together with the acquired hedges, cover up to 85% of projected production volumes related to this transaction through 2018. The acquired and incremental commodity hedges represent total gas volumes of 23.5 Bcf for the period 2013 – 2018 at a weighted average fixed price of $4.60; total oil volumes of 228,600 Bbls for the period 2013 – 2016 at a weighted average fixed price of $88.82 and 591,250 Bbls of NGLs for the period 2013 – 2014 at an average fixed price of $35.58.
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