Memorial Production Partners L.P.
) - together with its wholly owned subsidiary Memorial Production
Finance Corp. - announced the pricing of its $500 million aggregate
principal amount of 6.875% senior unsecured notes due Aug 2022 at a
price of 98.485% of par, in a private placement to qualified
buyers. The closing of the offering is expected to occur on Jul 17,
2014, subject to certain customary conditions.
The energy explorer plans to use the proceeds from this private
placement to pay back part of the outstanding borrowings under its
revolving credit facility as well as for corporate purposes.
Memorial Production Partners, which went public in Dec 2011, is a
publicly traded exploration and production master limited
partnership (MLP) engaged in the acquisition, finding and
development of oil and gas properties in the U.S. The company's
operations are concentrated primarily in the East Texas / North
Louisiana, Rockies, Permian, Eagle Ford/South Texas and California.
Having done a stellar job at raising volumes and cash distribution,
analysts are predicting strong earnings growth for Memorial
Production Partners over the next couple of years. The 2014 Zacks
Consensus Estimate is $1.90, representing 23% earnings per share
growth over 2013. Next year's average forecast is $2.13,
corresponding with 12% growth. Moreover, Memorial Production
Partners continues to leverage its relationship with parent
Memorial Resource Development Corp.
) to make 'drop-down' transactions (or asset buys from the
partnership's sponsor company).
However, as is the case with other exploration and production
firms, Memorial Production Partners' results are directly exposed
to oil and gas prices, which are inherently volatile and subject to
complex market forces. Realized prices could differ significantly
from our estimates, thereby affecting the company's revenues,
earnings and cash flow.
As a result, Memorial Production Partners currently retains a Zacks
Rank #3 (Hold), implying that it is expected to perform in line
with the broader U.S. equity market over the next one to three
However, some better-ranked domestic upstream energy stocks include
Swift Energy Co.
WPX Energy Inc.
). Both the firms hold a Zacks Rank #1 (Strong Buy).
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MEMORIAL PRODUC (MEMP): Free Stock Analysis
WPX ENERGY INC (WPX): Free Stock Analysis
SWIFT ENERGY CO (SFY): Free Stock Analysis
MEMORIAL RESRC (MRD): Free Stock Analysis
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