Memorial Production Partners To Buy Oil And Gas Properties For About $606 Mln

(RTTNews) - Memorial Production Partners LP (MEMP) announced Monday that it has signed definitive agreements to acquire certain oil and gas properties in the Permian Basin, East Texas, and the Rockies, from its sponsor, Memorial Resource Development LLC, and affiliates of Natural Gas Partners for an aggregate purchase price of approximately $606 million, subject to customary purchase price adjustments.

The company noted that the transaction will have an effective date of July 1, 2013. The transaction is expected to close in October 2013. 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 acquired properties consist of 973 gross wells on 363,000 gross acres in Texas, New Mexico, Wyoming and Colorado. MEMP will operate 94% of total proved reserves and 74% of the producing wells. MEMP will acquire approximately 275 Bcfe of proved reserves, which are located approximately 48% in the Permian Basin, 31% in East Texas and 21% in the Rockies.

The company expects that the transaction will be immediately accretive to distributable cash flow and net asset value.

The company revised its 2013 EBITDA guidance to $202 million - $206 million from the previously announced guidance of $154 million - $158 million.

The company expects to fund the transaction through borrowings under its $1.0 billion multi-year revolving credit facility, which carries a current borrowing base of $480 million prior to any increases for the acquisition. MEMP's liquidity position is expected to be in excess of $150 million following the close of the transaction.

As part of the transaction, MEMP will acquire commodity hedges that cover approximately 72% of acquired PDP volumes through 2015 (82% through 2014). In addition, MEMP said it will acquire interest rate hedges for a notional principal amount of $11.5 million extending through June 2014 at a fixed annual LIBOR rate of 0.5%.