Item 1.02. Termination of a Material Definitive Agreement.
Pursuant to the Indenture, dated as of December 18, 2013 (as amended, modified
or supplemented from time to time, the "Indenture"), among Memorial Resource
Development Corp., as successor under the Indenture to Memorial Resource
Development LLC (the "Company"), Memorial Resource Finance Corp. (together with
the Company, the "Issuers"), each of the guarantors party thereto and U.S. Bank
National Association, as trustee (the "Trustee"), the Issuers provided notice to
the Trustee that they had elected to redeem all of the outstanding 10.00%/10.75%
Senior PIK Toggle Notes due 2018 issued under the Indenture (the "Notes"), at a
redemption price of 102% of the principal amount of the Notes plus accrued and
unpaid interest thereon, on July 16, 2014 (the "Redemption"). On June 27, 2014,
the Company irrevocably deposited with the Trustee approximately $360 million,
which is the amount sufficient to fund the Redemption and to satisfy and
discharge (the "Discharge") the Issuers' obligations under the Notes and the
Indenture. The Discharge became effective upon the irrevocable deposit of the
funds with the Trustee.
Item 2.01. Completion of Acquisition or Disposition of Assets.
On July 1, 2014, Memorial Production Partners LP (the "Partnership"), a
consolidating subsidiary of the Company, announced that the Partnership closed
its previously announced acquisition of oil and natural gas liquids properties
in Wyoming from Merit Energy Company, LLC and certain of its affiliates (the
"Acquisition"). The Partnership acquired the properties for an adjusted purchase
price of approximately $915.1 million, subject to customary post-closing
adjustments. The Acquisition was funded with borrowings under the Partnership's
revolving credit facility.
The definitive purchase and sale agreement relating to the Acquisition, dated as
of May 2, 2014, among Memorial Production Operating LLC, the Partnership's
wholly-owned subsidiary, and Merit Energy Company, LLC and certain of its
affiliates (the "Purchase Agreement"), contains representations and warranties,
covenants and indemnification provisions that are typical for transactions of
this nature and that were made or agreed to, among other things, to provide the
parties thereto with specified rights and obligations and to allocate risk among
such parties. Accordingly, the Purchase Agreement should not be relied upon as
constituting a description of the state of affairs of any of the parties thereto
or their affiliates at the time it was entered into or otherwise.
The foregoing description of the Acquisition does not purport to be complete and
is qualified in its entirety by reference to the Purchase Agreement, which was
previously filed as Exhibit 2.1 to the Partnership's Current Report on Form 8-K
filed with the Securities and Exchange Commission on May 5, 2014 and is
incorporated by reference in this Item 2.01.
The Company controls the Partnership through its ownership of the general
partner the Partnership. The Partnership is a publicly traded limited
partnership engaged in the acquisition, production and development of oil and
natural gas properties in the United States. Due to the Company's control of the
Partnership through the ownership of its general partner, the Company is
required to consolidate the Partnership for accounting and financial reporting
Item 9.01. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The unaudited statements of revenues and direct operating expenses for the
Acquisition for the three months ended March 31, 2014 and 2013, and the audited
statements of revenues and direct operating expenses for the Acquisition for
each of the years in the three-year period ended December 31, 2013, including
the related notes thereto, and the independent auditor's report related thereto,
are attached hereto as Exhibit 99.1 and incorporated herein by reference.
(b) Pro Forma Financial Information.
The unaudited pro forma condensed combined balance sheet of the Company as of
March 31, 2014 and the unaudited condensed combined pro forma statements of
operations for the three months ended March 31, 2014 and for the year ended
December 31, 2013, including notes thereto, which gives effect to the
Acquisition and related financing transactions, are attached hereto as Exhibit
99.2 and incorporated herein by reference.
Exhibit Number Description
2.1* Purchase and Sale Agreement, dated as of May 2, 2014, among
Merit Management Partners I, L.P., Merit Energy Partners
III, L.P., Merit Pipeline Company, LLC and Merit Energy
Company, LLC and Memorial Production Operating LLC
(incorporated by reference to Exhibit 2.1 to Memorial
Production Partners LP's Current Report on Form 8-K (File
No. 001-35364) filed on May 5, 2014)
23.1 Consent of KPMG LLP
99.1 Statements of Revenues and Direct Operating Expenses of the
Oil and Gas Properties Under Contract for Purchase by
Memorial Production Partners LP from Merit Energy for the
three months ended March 31, 2014 and 2013 (unaudited) and
the years ended December 31, 2013, 2012 and 2011
99.2 Memorial Resource Development Corp.'s Unaudited Pro Forma
Condensed Combined Financial Statements as of March 31, 2014
and for the three months ended March 31, 2014 and year ended
December 31, 2013
* The schedules to this agreement have been omitted from this filing pursuant
to Item 601(b)(2) of Regulation S-K; copies of such schedules will be
furnished to the Securities and Exchange Commission upon request.