MEMORIAL PRODUCTION PARTNERS LP (NASDAQ:MEMP) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry into a Material Definitive Agreement.
Second Amendment to Limited Waiver
As previously disclosed on November1, 2016, in connection with
the interest payment default on the 2021 Notes (as defined
below), Memorial Production Partners LP (the Partnership),
Memorial Production Operating LLC (Operating LLC), certain
subsidiaries of the Partnership, Wells Fargo Bank, National
Association, as administrative agent for the lenders (the
Administrative Agent), and the lenders consenting thereto,
entered into the Limited Waiver and Twelfth Amendment thereto (as
amended, the Limited Waiver) with respect to the Credit
Agreement, dated as of December14, 2011, by and among the
Partnership, the Operating LLC, the Administrative Agent and the
other agents and lenders party thereto from time to time.
On November30, 2016, the Partnership entered into the First
Amendment to Limited Waiver, which extended the outside date of
the limited waiver period under the Limited Waiver from
November30, 2016 to December16, 2016.
On December16, 2016, the Partnership entered into the Second
Amendment to Limited Waiver (the Waiver Amendment), which
extended the outside date of the limited waiver period under the
Limited Waiver from December16, 2016 to January13, 2017. The
Partnership also agreed to liquidate at least $200 million of
commodity derivatives and to use the net cash proceeds therefrom
to repay outstanding borrowings under the revolving credit
facility (with a corresponding reduction in the aggregate elected
commitments of the lenders).
A copy of the Waiver Amendment is filed as Exhibit 10.1 hereto
and incorporated herein by reference. The above description of
the Waiver Amendment is qualified in its entirety by the full
text of such exhibit.
Amendment to Notes Forbearance
As previously disclosed on December1, 2016, on November30, 2016,
Memorial Production Partners LP (the Partnership) entered into
(i)a Forbearance (the 2021 Notes Forbearance) among the
Partnership, Memorial Production Finance Corporation, a Delaware
corporation (Finance Corp), certain guarantors party thereto, and
certain beneficial owners and/or investment advisors or managers
of discretionary accounts for the holders or beneficial owners
(the 2021 Holders) of 51.7% of the aggregate principal amount of
the Partnerships 7.625% senior notes due 2021 (the 2021 Notes)
and (ii)a Forbearance (the 2022 Notes Forbearance and, together
with the 2021 Notes Forbearance, the Forbearances) among the
Partnership, Finance Corp, certain guarantors party thereto, and
certain beneficial owners and/or investment advisors or managers
of discretionary accounts for the holders or beneficial owners
(the 2022 Holders) of 69% of the aggregate principal amount of
the Partnerships 6.875% senior notes due 2022 (the 2022 Notes).
The 2021 Notes were issued to that certain Indenture, dated as of
April17, 2013 (as subsequently amended, modified or supplemented,
the 2021 Indenture), among the Partnership, Finance Corp, the
guarantors party thereto and Wilmington Trust National
Association, as successor trustee (the Trustee). The 2022 Notes
were issued to that certain Indenture, dated as of July17, 2014
(as subsequently amended, modified or supplemented, the 2022
Indenture), among the Partnership, Finance Corp, the guarantors
party thereto and the Trustee.
to each Forbearance, among other provisions, each 2021 Holder and
2022 Holder agreed that during the Forbearance Period (as defined
in each Forbearance), subject to certain conditions, it will not
enforce, or otherwise take any action to direct enforcement of,
any of the rights and remedies available to the 2021 Holders, the
2022 Holders or the Trustee, as applicable, solely with respect
to the failure to make the interest payment due on November1,
2016 on the 2021 Notes, and the subsequent default for 30 days in
such payment, which constitutes an event of default under the
2021 Indenture (the Interest Default) and may result in a cross
default under the 2022 Indenture (the Cross Default).
As previously disclosed, on December7, 2016, the Partnership,
Finance Corp and certain guarantors party thereto entered into
(i)a First Amendment to the 2021 Notes Forbearance with the 2021
Holders listed therein (the 2021 First Amendment) and (ii)a First
Amendment to the 2022 Notes Forbearance with the 2022 Holders
listed therein (the 2022 First Amendment and, together with the
2021 First Amendment, the
Amendments). The Amendments, among other things, extended the
forbearance period under the applicable Forbearance until the
earliest to occur of (a)11:59 p.m. (New York City time) on
December16, 2016 (the Forbearance Date), (b)the occurrence of any
event of default under the applicable indenture, other than the
Interest Default or the Cross Default, as applicable, and (c)two
(2)calendar days following the Partnerships receipt of notice
from any 2021 Holder or 2022 Holder of any breach of the
conditions or agreements set forth in the 2021 Notes Forbearance
or the 2022 Notes Forbearance (which breach remains uncured).
Effective as of December16, 2016, the Partnership, Finance Corp
and certain guarantors party to the Forbearances and certain 2021
Holders listed in the 2021 First Amendment and 2022 Holders
listed in the 2022 First Amendment agreed to extend the
Forbearance Date to January13, 2017.
Item3.01. Notice of Delisting or Failure to Satisfy a
Continued Listing Rule or Standard; Transfer of Listing.
On December13, 2016, Memorial Production Partners LP (the
Partnership) received a letter from the Listing Qualifications
Department of The NASDAQ Stock Market LLC (NASDAQ) notifying the
Partnership that the Partnerships common units representing
limited partner interests (common units) closed below the $1.00
per common unit minimum bid price required by NASDAQ Listing Rule
5450(a)(1) for 30 consecutive business days. The notice has no
immediate effect on the listing or trading of the Partnerships
common units, which will continue to trade on The Nasdaq Global
Select Market under the symbol MEMP.
In accordance with NASDAQ Listing Rule 5810(c)(3)(A), the
Partnership has a period of 180 calendar days, or until June12,
2017, to achieve compliance with the minimum bid price
requirement. The Partnership may regain compliance with the
minimum bid price requirement if at any time before June12, 2017,
the bid price for the Partnerships common units closes at $1.00
per common unit or above for a minimum of 10 consecutive business
days.
The Partnership intends to actively monitor the bid price of its
common units and will consider available options to regain
compliance with the listing requirements.
Item7.01. Regulation FD Disclosure.
On December19, 2016, the Partnership issued a press release
announcing entry into the Waiver Amendment and the extension of
the Forbearance Date under the Forbearances, as described in
Item1.01 of this Current Report on Form 8-K. A copy of the press
release is furnished as Exhibit 99.1 hereto.
The information in this Item7.01 of this Current Report on Form
8-K, including the attached Exhibit 99.1 is being furnished to
General Instruction B.2 of Form 8-K and shall not be deemed to be
filed for purposes of Section18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liabilities of that
section, and shall not be deemed to be incorporated by reference
into any Partnership filing, whether made before or after the
date hereof and regardless of any general incorporation language
in such filing, except to the extent expressly set forth by
specific reference in such filing.
Item9.01. Financial Statements and Exhibits.
| (d) | Exhibits. |
|
ExhibitNumber |
Description |
|
| 10.1 |
Second Amendment to Limited Waiver, dated as of December 16, 2016, among Memorial Production Operating LLC, Memorial Production Partners LP, certain other guarantors and lenders and Wells Fargo Bank, National Association, as administrative agent for the lenders |
|
| 99.1 | Press release dated December 19, 2016 |
About MEMORIAL PRODUCTION PARTNERS LP (NASDAQ:MEMP)
Memorial Production Partners LP (the Partnership) owns, acquires and exploits oil and natural gas properties in North America. The Partnership is owned by its limited partners and general partner. Its general partner is responsible for managing all of the Partnership’s operations and activities. The Partnership operates in the acquisition, exploitation, development and production of oil and natural gas properties segment. Its business activities are conducted through Memorial Production Operating LLC (OLLC) and its wholly owned subsidiaries. Its assets consist primarily of producing oil and natural gas properties, and are located in East Texas/Louisiana, Rockies, Offshore Southern California, Permian Basin and South Texas. Most of its oil and natural gas properties are located in oil and natural gas reservoirs with geologic characteristics and production profiles and capital requirements. MEMORIAL PRODUCTION PARTNERS LP (NASDAQ:MEMP) Recent Trading Information
MEMORIAL PRODUCTION PARTNERS LP (NASDAQ:MEMP) closed its last trading session down -0.525 at 0.565 with 850,288 shares trading hands.