Memorial Production To Gain East Texas Assets
To buy properties in Willow Springs Field in Gregg County & additional assets in Upshur, Rusk, Panola, Smith & Leon cos., TX, featuring 111 gross producing wells, gaining 2.3 Mmcfe/d, 20 Bcfe.
Memorial Production Partners LP, Houston, (Nasdaq: MEMP), an MLP focused on acquiring mature assets in South and East Texas, plans to acquire certain oil and natural gas producing properties in East Texas from its sponsor Memorial Resource Development LLC, for $18.3 million.
The properties are primarily in Willow Springs Field in Gregg County and in Upshur, Rusk, Panola, Smith and Leon counties in East Texas. The assets include 111 gross (29 net) producing wells, of which 84% will continue to be operated by Tanos Energy Holdings LLC, an operating subsidiary of Memorial Resource Development.
Net production is 2.3 million cubic feet of gas equivalent per day (82% gas). Net proved reserves are approximately 20 billion cubic feet equivalent (69% proved developed).
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.
John A. Weinzierl, chairman and chief executive of the general partner of Memorial Production, says, “These assets are near our core existing East Texas properties and offer identified low-risk exploitation opportunities that will supplement our production profile.”
Memorial Production will fund the deal with borrowings from its existing credit facility.
The deal is expected to close by April 2.