Memorial Production Partners LP (NASDAQ:MEMP) reported its financial and operating report for the quarter closed September 30, 2016. Average daily production came at 213.8 MMcfe/d while lease operating expenses were $1.61 per Mcfe, in the third quarter of 2016. Net Cash offered by operating activities amounted to $43.2 million for 3Q2016 while adjusted EBITDA was $76.9 million.
The management speaks
Bill Scarff, the CEO and President of Memorial Production, said that they have reported a strong operational quarter led by production coming in higher compared to given forecasts. However, operating costs came lower than what was expected. This performance shows the focus and efforts of company’s workforce and restate the value potential of assets, considerable cash flow generation and the strength of operations.
In the past one year, the company have taken several measures to reduce its outstanding debt, drive down expenses, manage cash flows and divest non-core assets. At the same time, the firm has explored different prospects to improve leverage profile and enhance liquidity.
After delivering robust performance from an operational perspective, Memorial Production is now taking additional initiatives to strengthen its overall financial position, including looking for strategic options to strengthen company’s balance sheet. It will also continue the talks with lenders pertaining capital structure.
Scarff added that as they work through this course, the Board has decided it is in the interest of the association to not initiate an interest payment on senior notes due on November 1, 2016, beginning a 30-day grace period. Notably, the production and operations are continuing as normal throughout asset base, and they continue to be confident in the assets strength and continued cash generation.
Average daily production came at 213.8 MMcfe in 3Q2016 against 231.5 MMcfe in 2Q2016. This decline can be attributed to the volumes related to the divestiture of Rockies and Permian properties which was partially counterbalance by stronger than anticipated production from new wells completed in East Texas.
NGLs, crude oil and natural gas sales, discounting commodity derivatives settlements, came at $74.2 million in 3Q2016 versus $67.8 million in the preceding quarter of FY2016. On an Mcfe basis, NGLs, crude oil and natural gas represented 16%, 28% and 56%, respectively, of sales volumes.