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Memorial Production Partners LP to Acquire Oil and Gas Properties, Announces Distribution Increase and 2013 Guidance



Memorial Production Partners LP to Acquire Oil and Gas Properties, Announces
Distribution Increase and 2013 Guidance

HOUSTON, Nov. 19, 2012 (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 offshore Southern California
from Rise Energy Partners, LP for a purchase price of $271 million, which
includes $3 million of working capital and other customary adjustments. This
transaction will have an effective date of September 1, 2012 and is expected
to close in December 2012. 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 $0.5075 per
unit for the fourth quarter of 2012. This distribution rate will represent an
annualized amount of $2.03 per unit and a 6.8% increase over the annualized
minimum quarterly distribution of $1.90 per unit, as well as a 2.5% increase
over the third quarter annualized distribution of $1.98 per unit.

The properties to be acquired, which we refer to as the Beta properties,
primarily consist of a 51.75% working interest in three Pacific Outer
Continental Shelf blocks covering the Beta Field, and are located in federal
waters approximately eleven miles offshore the Port of Long Beach, California.
MEMP will be the operator of the Beta properties. Associated facilities
include three conventional wellhead and production processing platforms, a
17.5-mile pipeline and an onshore tankage and metering facility. Two of the
platforms are bridge connected and stand in approximately 260 feet of water,
while the third platform stands in approximately 700 feet of water.

The Beta properties were first discovered in 1976 by Royal Dutch Shell PLC and
have been in production since January 1981. As of September 30, 2012, the
total estimated proved reserves attributable to the Beta properties were
approximately 14.3 MMBbls, based on independent third-party reserve
engineering, of which approximately 100% were oil and approximately 70% were
classified as proved developed reserves, with a standardized measure (PV-10)
of $392.8 million. The average net production associated with the Beta
properties for the nine months ended September 30, 2012 was 1,574 Bbls/d,
implying a reserve-to-production ratio of approximately 24.9 years.

Transaction Highlights

  * Expected to be accretive to distributable cash flow
  * Assets exhibit a stable long-lived production profile with an estimated
    average annual proved developed producing decline rate of approximately 5%
  * Diverse distribution of reserve value, with 51 gross (26 net) producing
    wells, none of which contains in excess of 5% of the total estimated
    proved reserves
  * High operating margins and modest capital expenditure requirements
  * Multiple low-cost development opportunities, including, drilling,
    recompletions and injection enhancement opportunities
  * Estimated original oil in place (OOIP) of approximately 940 MMBbls, and
    cumulative production of approximately 86 MMBbls equates to a current
    estimated recovery factor of only 9%
  * Diversifies both our asset mix, by adding a significant amount of oil, and
    our geographic basins
  * Significant percentage of acquired production will be hedged through 2017
  * Acquired reserves represent approximately 14% of MEMP's pro forma reserves

"We are very excited to announce Memorial's largest acquisition to date and
fifth transaction in our first twelve months of operation. We believe these
properties are ideal for an MLP because they are located in a mature, legacy
basin characterized by long life oil reserves, stable production with a low
decline rate and low risk development drilling opportunities. This acquisition
also diversifies our commodity mix by adding a significant amount of oil
production and reserves," said John A. Weinzierl, Chairman, President and
Chief Executive Officer of the general partner of MEMP. "Additionally, we are
excited to announce, subject to the closing of this transaction, an annualized
five cent distribution rate increase to $0.5075 per unit for the fourth
quarter."

Acquired Reserves

The following are the estimated proved reserves and standardized measure
(PV-10) attributable to the oil and gas properties to be acquired in this
transaction, as of September 30, 2012.

                                      
As of September 30, 2012 Oil (MMBLs) Standardized Measure (PV-10) ($MM)
Proved Developed         10.0        $264.7
Proved Undeveloped       4.3         128.1
Proved Reserves          14.3        $392.8

Financial Highlights

In connection with the closing of this transaction, MEMP has secured
commitments from its bank group to expand its borrowing base to $460.0 million
from the previous $380.0 million under its $1.0 billion revolving credit
facility consisting of 11 participating banks, subject to final
documentation. MEMP has the ability to finance this transaction through
borrowings under its revolving credit facility and promissory notes payable to
the seller.  MEMP may also seek an interim redetermination of its borrowing
base prior to its next scheduled redetermination in April 2013 for any future
acquisitions.

Hedging Update

As part of this transaction, MEMP will acquire crude oil hedges from the
closing of the acquisition through 2015. The acquired hedges will cover a
significant portion of 2013 crude oil volumes as well as volumes in 2014 and
2015. In addition to the acquired hedges and consistent with its hedging
policy, MEMP intends to enter into additional crude oil hedges through 2017
that will cover from 65% to 85% of its targeted crude oil production per
year. 

2013 Guidance

The following 2013 guidance is subject to the cautionary statements and
limitations described under the "Forward-Looking Statements" caption at the
end of this press release. MEMP's 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, takes into account the impact of the oil and gas producing
properties acquired throughout 2012, including those considered transactions
between entities under common control, and assumes the completion of the
pending Beta acquisition. A summary of the guidance, assuming no additional
acquisitions, is presented below:

Full Year 2013 Guidance            
                                   
Annual Production (Bcfe)          28 – 30
                                   
Adjusted EBITDA ($MM)^(1)         $120 – $124 
                                   
Distributable Cash Flow ($MM)^(1) $78 – $82
                                   
DCF Coverage                      1.10x – 1.20x 
                                   
Maintenance Capex ($MM)           $31
                                   
Growth Capex ($MM)                $30 – $40

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 we believe
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.

^(1)Adjusted EBITDA and Distributable Cash Flow are non-GAAP financial
measures. Please see the reconciliation to the most comparable measure
calculated in accordance with GAAP in the "Use of Non-GAAP Financial Measures"
section of this press release.

Memorial Production Partners LP is a Delaware limited partnership that was
formed to own and acquire oil and natural gas properties in North
America. MEMP's properties are located in South Texas and East Texas/North
Louisiana and, subject to the closing of this transaction, California and
consist of mature, legacy oil and natural gas reservoirs. MEMP is
headquartered in Houston, Texas. For more information, visit
www.memorialpp.com.

The Memorial Production Partners logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=11158

This press release may include "forward-looking statements" as defined by the
Securities and Exchange Commission ("SEC"). 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. 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. These include risks relating to
financial performance and results, availability of sufficient cash flow to pay
distributions and execute MEMP's business plan, prices and demand for natural
gas and oil, MEMP's ability to replace reserves and efficiently develop its
current reserves and other important factors that could cause actual results
to differ materially from those projected as described in MEMP's reports filed
with the SEC. 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. For a more complete list of these risk factors,
please read MEMP's filings with the SEC, which are available on MEMP's
Investor Relations website at http://investor.memorialpp.com/sec.cfm or on the
SEC's website at www.sec.gov. MEMP undertakes no obligation and does not
intend to update these forward-looking statements to reflect events or
circumstances occurring after this press release.

The SEC permits oil and gas companies, in their filings with the SEC, to
disclose only "reserves" as defined by SEC rules. In addition, the estimates
of reserves in this press release are based on various assumptions, including
assumptions related to oil and natural gas prices as discussed above, drilling
and operating expenses, capital expenditures, taxes and availability of funds,
which may differ materially from those that will be used in MEMP's 2012 Form
10-K. The SEC permits oil and gas companies, in their filings with the SEC, to
disclose only proved, probable and possible reserves that meet the SEC's
definitions for such terms. MEMP uses certain terms in this news release, such
as OOIP, that the SEC's guidelines strictly prohibit MEMP from including in
filings with the SEC. This press release contains estimates of OOIP
attributable to the Beta properties. OOIP is merely an indication of the size
of a hydrocarbon reservoir and is not an indication of reserves or the
quantity of oil that is likely to be produced. You should not assume that
estimates of OOIP are comparable to proved or probable reserves or
representative of estimates of future production from the Beta properties. It
is not possible to measure OOIP in an exact way, and estimating OOIP is
inherently uncertain. OOIP has been estimated based on subjective analysis of
geological and other relevant data applicable to the Beta properties,
including assumptions regarding area, thickness, porosity and saturation.
Changes in these factors or inaccuracies in our assumptions could materially
alter the estimates of OOIP. Investors are urged to consider closely the
disclosure in MEMP's filings with the SEC, which you can obtain from the SEC's
website at www.sec.gov.

Use of Non-GAAP Financial Measures

This press release and accompanying schedules include the non-GAAP financial
measures of Adjusted EBITDA and Distributable Cash Flow. The accompanying
schedules provide a reconciliation of these non-GAAP financial measures to
their most directly comparable financial measure calculated and presented in
accordance with GAAP. MEMP's non-GAAP financial measures should not be
considered as alternatives to GAAP measures such as net income, operating
income, net cash flows provided by operating activities or any other measure
of financial performance calculated and presented in accordance with GAAP.
MEMP's non-GAAP financial measures may not be comparable to similarly-titled
measures of other companies because they may not calculate such measures in
the same manner as MEMP does.

Adjusted EBITDA. MEMP defines Adjusted EBITDA as net income or loss, plus
interest expense; net operating cash flow from acquisitions, effective date
through closing date; income tax expense; depreciation, depletion and
amortization; impairment of goodwill and long-lived assets; accretion of asset
retirement obligations; unrealized losses on commodity derivative contracts;
losses on sale of assets; unit-based compensation expenses; exploration costs;
acquisition costs; and other non-routine items, less interest income; income
tax benefit; unrealized gains on commodity derivative contracts; gains on sale
of assets; amortization of investment premium; and other non-routine items.
Adjusted EBITDA is commonly used as a supplemental financial measure by
management and external users of MEMP's financial statements, such as
investors, commercial banks, research analysts and rating agencies, to assess:
(1) the financial performance of its assets without regard to financing
methods, capital structures or historical cost basis; (2) the ability of its
assets to generate cash sufficient to pay interest and support MEMP's
indebtedness; and (3) the viability of projects and the overall rates of
return on alternative investment opportunities. Since Adjusted EBITDA excludes
some, but not all, items that affect net income or loss and because these
measures may vary among other companies, the Adjusted EBITDA data presented in
this press release may not be comparable to similarly titled measures of other
companies. The GAAP measure most directly comparable to Adjusted EBITDA is net
cash flows provided by operating activities.

Distributable Cash Flow. MEMP defines distributable cash flow as Adjusted
EBITDA, less cash income taxes; cash interest expense; and estimated
maintenance capital expenditures. Management compares the distributable cash
flow MEMP generates to the cash distributions it expects to pay MEMP's
partners. Using this metric, management computes MEMP's distribution coverage
ratio. Distributable cash flow is an important non-GAAP financial measure for
MEMP's limited partners since it serves as an indicator of MEMP's success in
providing a cash return on investment. Specifically, this financial measure
indicates to investors whether or not MEMP are generating cash flows at a
level that can sustain or support an increase in its quarterly cash
distributions. Distributable cash flow is also a quantitative standard used by
the investment community with respect to publicly traded partnerships because
the value of a partnership unit is, in part, measured by its yield, which is
based on the amount of cash distributions a partnership can pay to a
unitholder. The GAAP measure most directly comparable to distributable cash
flow is net cash flows provided by operating activities.

2013 Adjusted EBITDA Guidance Reconciliation Table

 
Memorial Production Partners LP
Reconciliation of Unaudited GAAP Financial Measures to Non-GAAP Financial
Measures
2013 Adjusted EBITDA Guidance                                 
(In millions)                              Low               High
                                           For Year Ended    For Year Ended
                                           December 31, 2013 December 31, 2013
                                                              
Calculation of Adjusted EBITDA:                               
Net income                                 $ 66              $ 70
Interest expense                           11                11
Net operating cash flow from acquisitions, --                --
effective date through closing date
Depletion, depreciation, and amortization  43                43
Adjusted EBITDA                            $ 120             $  124
                                                              
                                                              
Reconciliation of Net Cash From Operating                     
Activities to Adjusted EBITDA:
Net cash provided by operating activities  $ 109             $ 113
Changes in working capital                 --                --
Net operating cash flow from acquisitions, --                --
effective date through closing date
Interest expense                           11                11
Adjusted EBITDA                            $  120            $  124

CONTACT: Memorial Production Partners LP
         Ronnetta Eaton - Manager, Investor Relations
         (713) 588-8350
         ir@memorialpp.com

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