History
Memorial Production Partners grew by debt-and-unit-funded acquisitions after its 2011 IPO, collapsed into Chapter 11 in 2017, and re-emerged as Amplify, agreeing in 2019 to merge with Midstates.
2011-2012: Listing and first acquisitions
The company began as Memorial Production Partners LP, a partnership that listed on Nasdaq. On December 14, 2011 it closed its initial public offering of 9,000,000 common units at $19.00, raising about $150 million. The money went to buy properties from its sponsor, Memorial Resource Development LLC. It also signed an omnibus agreement, under which Memorial Resource was reimbursed for administrative costs, and a five-year $1.0 billion revolving credit facility led by Wells Fargo, with an initial $300 million borrowing base (the amount lenders would allow it to borrow).
In September 2012 it agreed to buy East Texas properties from Goodrich Petroleum, closing on September 28 at an adjusted $93.2 million, funded by borrowing. In December 2012 it closed the $271 million purchase of Rise Energy Operating, which owned the Beta properties offshore Southern California. It paid with a public offering of 10,500,000 units at $17.00, about $172 million, plus borrowing. Memorial Resource's stake fell to 37.8% from 56%.
2013: Buying from the sponsor
The company kept buying, often from Memorial Resource affiliates, with independent conflicts committee approval. In March it bought WHT Energy Partners, with East Texas and North Louisiana properties, for about $200 million. It sold 8,500,000 units at $18.35, plus 1,275,000 more when the underwriters took their option, raising about $172.6 million.
In April and May it sold $400 million of 7 5/8% senior notes due 2021, and added another $300 million in October. In July it agreed to buy Permian Basin, East Texas and Rockies properties for about $606 million. That closed on October 1 at an adjusted $603 million, funded by borrowing. A public sale of 14,500,000 units at $19.90 then repaid part of the borrowing. The borrowing base reached $920 million, before the October notes sale cut it to $845 million. Share counts rose from 16,946,903 at the end of 2012 to 39,195,888 at the end of 2013, reflecting these raisings.
2014-2015: The Wyoming deal and its funding
In March 2014 it paid $173 million for non-operated Eagle Ford properties in South Texas. In May it agreed to buy the Bairoil CO2 flood properties in Wyoming from Merit Energy for about $935 million. The deal closed on July 1 at an adjusted $915.1 million, funded by borrowing. The borrowing base was raised to $1.44 billion.
To pay down that debt, it sold 8,600,000 units at $22.25 plus 1,290,000 option units in July, and 13,000,000 units at $22.29 plus 1,950,000 more in September. It also sold $500 million of 6.875% notes due 2022. In December 2014 it authorised a buyback of up to $150.0 million of units. In November 2015 it bought further Beta interests for about $100.8 million. The record for most of 2015 is otherwise quiet.
2016: Sales and default
In April 2016 the partnership agreed to buy its general partner for $750,000 and the remaining incentive distribution rights, ending its dependence on Memorial Resource. In May it set up an equity programme to sell up to $60 million of units. In June and July it sold Permian assets for about $37.4 million and Colorado and Wyoming assets for about $18.1 million.
On November 1 it skipped a roughly $24.6 million interest payment on its 2021 notes. The grace period expired, and lenders and noteholders agreed to hold off enforcing their rights. In December Nasdaq warned that the units had closed below $1.00 for 30 consecutive business days. On December 22 it signed a plan with noteholders under which the notes would be cancelled for 98% of new shares, with unitholders offered 2% plus warrants.
2017: Chapter 11
The partnership filed Chapter 11 on January 16, 2017, with revolver lenders also signing a support agreement. Nasdaq announced it would delist the units. On April 14 the court confirmed the plan: the notes were cancelled for 98% of new shares plus about $24.6 million in cash, and all partnership interests were cancelled. Limited partners were to share 2% of new shares, warrants for 8%, and $1,250,000 in cash. In May the exchange moved to remove the units from listing and the registration was terminated. The share count of 25,000,000 at the end of 2017 reflects the successor company.
2018-2019: Amplify and the Midstates merger
The record for 2018 is thin. The successor, Amplify Energy Corp., was quoted on OTCQX as AMPY. In 2018 it reported revenue of $87.9 million in the first quarter, with net income of $3.2 million, then net losses of $25.3 million and $2.6 million in the second and third quarters. It entered a new credit agreement with Bank of Montreal in November 2018.
On May 5, 2019 Amplify agreed to merge with Midstates Petroleum, with each Amplify share converting into 0.933 Midstates shares and each side owning 50% of the combined company. Holders of about 58.3% of Amplify shares signed voting agreements in favour. The fixed ratio was worth about $11.96 per Amplify share on May 3 but about $5.28 on June 25. Votes were set for August 2, 2019, with an outside date of November 5, 2019. Five stockholder lawsuits sought to block the merger. A July amendment allowed lenders to redetermine the borrowing base from September 1 if the merger had not completed by August 31. As of July 26, 2019, the merger was still pending.
Written from the 43 story beats below (2011 to 6 Aug 2019), which come from the company's own announcements and filings.