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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

The following table, pro forma for this transaction, reflects the percentage volumes of MEMP's production covered by commodity derivative contracts and the average fixed or floor prices at which production is hedged. The targeted average net production estimate represents the production required to reach the lower boundary of the annual production range in MEMP's 2013 updated full year guidance.

  Year Ending December 31,
  2013 2014 2015 2016 2017 2018
Natural Gas Derivative Contracts:            
Total weighted-average fixed/floor price $4.55 $4.48 $4.42 $4.51 $4.33 $4.67
Percent of target production hedged 91% 87% 77% 71% 65% 61%
Crude Oil Derivative Contracts:            
Total weighted-average fixed/floor price $103.19 $98.09 $95.65 $93.31 $90.99 $90.66
Percent of target production hedged 79% 84% 78% 71% 66% 54%
Natural Gas Liquids Derivative Contracts:            
Total weighted-average fixed/floor price $42.85 $42.00
Percent of target production hedged 59% 56%
Wtd Avg Fixed/Floor Price Per Mcfe $6.77 $6.73 $6.64 $6.63 $6.44 $6.46
Percent of Target Production Hedged 82% 80% 62% 57% 52% 48%

Additional information regarding MEMP's hedging program can be found on MEMP's website , under the Investor Relations section. 

Updated 2013 Guidance      

The updated 2013 guidance included in this press release is subject to the cautionary statements and limitations described under the "Forward-Looking Statements" caption at the end of this press release. MEMP's updated 2013 guidance is based on assumptions of capital expenditure levels and the assumption that market demand and prices for oil and natural gas will continue at levels that allow for economic production of these products. It also reflects the impact of forecasted growth capital spending and assumes the completion of the pending transaction. A summary of the guidance, assuming no additional acquisitions, is presented below:

Full Year 2013 Guidance  
Annual Production (Bcfe)  37– 39
Adjusted EBITDA ($MM) (1)  $154 – $158
Distributable Cash Flow ($MM) (1) $98 – $104
DCF Coverage 1.15x – 1.25x 
Maintenance Capex ($MM)  $37.2
Growth Capex ($MM)  $40 – $50

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 management believes 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.

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