HOUSTON (May 14, 2012) – Memorial Production Partners LP has acquired certain oil and natural gas properties in East Texas from its sponsor, Memorial Resource Development LLC, for a purchase price of $27 million, subject to customary post-closing adjustments and receipt of third party consents. The acquisition was financed with borrowings under MEMP's existing credit facility and is effective as of April 1, 2012. The transaction included the novation of 2012 through 2014 commodity derivative positions to MEMP. 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.
"The acquisition of these East Texas assets is our third accretive transaction to date with our sponsor, Memorial Resource Development LLC and is consistent with our stated strategy to acquire assets from our sponsor that meet our acquisition criteria of mature, long-life producing properties. These assets are near one of our core areas and offer low-risk exploitation opportunities that will supplement our production profile," said John A. Weinzierl, Chairman and Chief Executive Officer of the general partner of MEMP.
These properties are located primarily in the Carthage and Joaquin fields of Panola and Shelby counties in East Texas.
- Estimated net proved reserves of approximately 28.1 Bcfe
- 45% proved developed reserves
- Proved reserve to production ratio of approximately 18.3 years
- Current net production of approximately 4.2 MMcfe per day, of this amount, approximately 81% is natural gas and 19% is oil and natural gas liquids
- Producing wells: 18 gross (17 net), of which 56% will be operated by MEMP
The acquisition is expected to be immediately accretive to both distributable cash flow per unit and net asset value per unit while improving MEMP's coverage ratio. Management will evaluate the impact of the acquisition on current distribution levels as it integrates these acquired assets.
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 consist of mature, legacy onshore oil and natural gas reservoirs. MEMP is headquartered in Houston.