HOUSTON, Feb. 24, 2015 (GLOBE NEWSWIRE) -- Memorial Production Partners LP (Nasdaq:MEMP) announced today that it has consummated a transaction with Memorial Resource Development Corp. (MRD) whereby MRD exchanged its East Texas and non-core Louisiana properties for all of MEMP's interests in the Terryville Field in North Louisiana and cash consideration of approximately $78 million, subject to customary purchase price adjustments. 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 was comprised entirely of independent directors. The transaction closed on February 23, 2015 and has an effective date of January 1, 2015.
MRD will receive, in addition to the cash consideration, all of MEMP's position in the Terryville Field in North Louisiana, which includes interests in 5.1 net (103 gross) wells. Total proved reserves are estimated to be approximately 20 Bcfe (62% proved developed / 70% natural gas) and estimated December 2014 net production was approximately 5 MMcfe/d.
In exchange, MEMP will receive properties primarily located in the Joaquin Field in Shelby and Panola counties in East Texas. The acquired properties consist of 165.3 net (297 gross) wells in East Texas and West Louisiana. MEMP will operate approximately 71% of the acquired producing wells.
- Expected to be immediately accretive to distributable cash flow and net asset value
- Estimated net proved reserves of 267 Bcfe (23% proved developed / 75% gas)
- Estimated December net production of approximately 27 MMcfe/d (78% gas)
- Proved reserve to production ratio of 27 years
- Properties have a stable, long-lived production profile with a projected average ten-year PDP decline rate of approximately 12.5%
- Increased operational control over existing East Texas assets
"This transaction provides strategic benefit to MEMP," said William J. (Bill) Scarff, President of the general partner of MEMP. "MEMP acquires additional working interests in producing properties it already owns in the Joaquin Field. Further, the transaction extends MEMP's extensive drilling inventory in the area and provides additional projects that are expected to achieve acceptable rates of return, even in this low commodity price environment."
MEMP funded the cash portion of the transaction with borrowings under its revolving credit facility, which has a $1.44 billion borrowing base.
As of February 23, 2015 and after giving effect to this transaction, MEMP had total debt outstanding of approximately $1.8 billion, which included $1.2 billion of senior notes and $578 million under its revolving credit facility. The revolving credit facility had $855 million of availability (including $6.7 million in letters of credit), which management believes will provide the financial flexibility to continue pursuing MEMP's acquisition growth strategy. Consistent with its hedging strategy, MEMP has hedged up to 85% of projected production volumes related to this acquisition for three to six years.
Memorial Production Partners LP is a publicly traded partnership engaged in the acquisition, production and development of oil and natural gas properties in the United States. MEMP's properties consist of mature, legacy oil and natural gas fields. MEMP is headquartered in Houston, Texas. For more information, visit www.memorialpp.com.
This press release includes "forward-looking statements." All statements, other than statements of historical facts, included in this press release that address activities, events or developments that MEMP expects, believes or anticipates will or may occur in the future are forward-looking statements. Terminology such as "will," "expect," "plan," "project," "intend," "estimate," "impact," "believe," "target," "potential," the negative of such terms or other comparable terminology are intended to identify forward-looking statements. These statements are based on certain assumptions made by MEMP based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of MEMP, which may cause MEMP's actual results to differ materially from those implied or expressed by the forward-looking statements. Please read MEMP's filings with the Securities and Exchange Commission ("SEC"), including "Risk Factors" in MEMP's Annual Report on Form 10-K, for a discussion of risks and uncertainties that could cause actual results to differ from those in such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement. Except as required by law, MEMP undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release.
CONTACT: Memorial Production Partners LP Ronnetta Eaton - Manager, Investor Relations (713) 588-8350 email@example.com
Source:Memorial Production Partners