Memorial Production Partners LP (NASDAQ:MEMP) filed its financial results for the 3Q2016, yesterday. The company noted that it was able to generate $43.2 million, through operating activities, during the period. The CEO of MEMP, Bill Scarff, stated that this was a strong operational quarter, with higher than expected production and lower than expected operating costs. He also voiced his views that the results reflected the commitment of the company’s workforce and the value potential of their assets and ability to generate cash flow.
Mr. Scarff went on to point out that during the last 1-year, the management has made significant improvements in the debt levels of MEMP, while also exercising cost control and divesting non-core business assets. He revealed that the company was now taking additional steps to improve its financial position, even further. This includes exploring strategic alternatives, resulting in a stronger balance sheet, while conducting discussions with lenders, about Memorial’s capital structure.
In addition to this, Memorial further revealed that it would not be making an interest payment, on one of its senior note, due November 1, 2016. The decision had been made by the board of directors, in light of MEMP’s current situation. Following the default, Memorial has a 30-day grace period to make the payment. In its 3Q2016 financial results, the company revealed that it had a total debt of $1.8 billion, as of October 28, 2016. A total of $1.1 billion of this amount was attributable to senior notes, while $774 million was attributed to the company’s revolving credit facility. Furthermore, the company had a borrowing capacity of $24 million, while also having $20 million cash in hand. In addition to this, the board of directors has also decided to suspend the company’s quarterly dividend, stating that it was in the best interest of the partnership. The board has also decided to reduce their credit facility from $925 million to $740 million, as of October 28. This figure would be further reduced to $720 million, as of December 1, 2016.
Memorial Production Partners LP (NASDAQ:MEMP) lost 48.17% of its share value and closed at a share price of $0.565, at the end of the November 2 trading session.