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

Operations Update   

In 2012, MEMP participated in the drilling and completion of 6 horizontal development wells targeting the liquids rich Cotton Valley formation. All of these wells were located in East Texas and North Louisiana, none of which were dry holes, for a success rate of 100%. Working interests in the wells averaged approximately 28%. MEMP met its 2012 production guidance, averaging 67.2 MMcfe/d, an increase of 16% over 2011 average production of 58.0 MMcfe/d. Total capital expenditures for the full year 2012 were $32.5 million and total maintenance capital expenditures were $14.8 million. 

MEMP's capital spending program in 2013 is expected to be approximately $77 to $87 million, after giving effect to the assumed capital expenditures relating to the properties to be acquired in the pending transaction. MEMP anticipates spending approximately 65% of the capital program in East Texas / North Louisiana, 32% in California and 3% in South Texas, primarily on drilling, recompletions and capital workovers. The capital program in East Texas and North Louisiana will be focused on 14 or more horizontal Cotton Valley new drills in various fields.  MEMP also anticipates upgrading its California facilities and drilling six additional operated wells from the Beta platforms. MEMP expects the balance of its capital budget will primarily be spent on recompletions and capital workovers in its South and East Texas areas. 

East Texas / North Louisiana

MEMP continues to be encouraged by its drilling success in targeted liquids rich gas wells in the Cotton Valley formations of Carthage, East Henderson and Terryville fields. Assuming the consummation of the pending transaction, 2013 capital plans include drilling and completing 14 or more gross wells in East Texas and North Louisiana. Depending on the field, rates of return on these wells are expected to range from 50% to greater than 100% and working interests range from approximately 3% to 100%. Timing of the new wells is anticipated to be spaced throughout the year. Total capital expenditures in East Texas / North Louisiana for 2013 are expected to be approximately $53 million.  

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