HOUSTON, Oct. 28, 2016 (GLOBE NEWSWIRE) — Memorial Production Partners LP (NASDAQ:MEMP) (“MEMP” or “the Partnership”) announced today that the board of directors of its general partner has elected to suspend MEMP’s quarterly cash distributions to unitholders, effective immediately. The board believes the suspension is in the best interest of the Partnership. The Partnership also announced a reduction of its borrowing base under MEMP’s credit facility from $925 million to $740 million, effective October 28, 2016, which will be further reduced to $720 million, effective December 1, 2016. These reductions are part of the Partnership’s semi-annual borrowing base redetermination process. As of October 28, 2016, MEMP had approximately $714 million outstanding under its revolving credit facility.
“Our board and management team believe that suspending the distribution at this time will help preserve liquidity and enhance MEMP’s operational and financial flexibility,” said William J. Scarff, President and Chief Executive Officer and a Director of MEMP GP. “The scope of the redetermination is disappointing given the strength of our operations and significant cash flow generation. We look forward to continuing discussions with our lenders, and we note that the redetermination will have no impact on current operations, which will continue in the normal course.”
Exploring Strategic Alternatives Related to Capital Structure
The Partnership has initiated a process to explore strategic alternatives to strengthen its balance sheet and improve its capital structure. MEMP has retained Perella Weinberg Partners L.P. as its financial advisor and Weil, Gotshal & Manges LLP as legal counsel to assist the board of directors and management team in this review.
Scarff continued, “Over the course of the last year, in addition to reducing MEMP’s outstanding debt, driving down costs, divesting non-core assets and managing our cash flows, we have also explored opportunities to further enhance liquidity and improve our leverage profile. We are now taking additional steps to preserve our financial flexibility and have retained advisors to help us determine the best path forward for MEMP as we continue discussions with our lenders regarding our capital structure. Despite the challenging commodity pricing environment, our assets are generating strong cash flow and we remain committed to operational excellence. We thank our employees for their continued focus on working safely and maintaining strong production across our asset base.”
Third Quarter 2016 Earnings
The Partnership will report financial and operational results for the third quarter on or around November 1, 2016. The Partnership will not hold a conference call.
About Memorial Production Partners LP
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.