Memorial Production Partners LP (NASDAQ: MEMP) is jettisoning noncore properties in the Permian Basin and Rockies in deals worth more than $50 million.
The Houston-based company said June 20 it closed a transaction to sell certain Permian assets for about $37.4 million in cash. Additionally, the company has entered a definitive agreement to sell certain of its noncore Rockies assets in Colorado and Wyoming for about $19.1 million in cash.
Proceeds from the divestitures will be used to reduce borrowings under Memorial's revolving credit facility. The buyer in both transactions wasn't revealed.
The Permian Basin properties consisted of 285 gross (238 net) producing wells. The assets produced about 1.2 thousand barrels of oil equivalent per day (Mboe/d) during the first three months of 2016.
As of year-end 2015, the divested Permian assets contained estimated proved reserves of 3.1 MMboe, or about 1% of Memorial's total estimated proved reserves of 1,268 billion cubic feet equivalent (Bcfe).
The Rockies properties consisted of 606 gross (188 net) producing wells. The assets produced about 10 MMcfe/d during the first three months of 2016.
As of year-end 2015, the divested Rockies assets contained estimated proved reserves of 25.5 Bcfe, or about 2% of Memorial's total estimated proved reserves of 1,268 Bcfe.
The Rockies transaction is expected to close third-quarter 2016 with an effective date of April 1.
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