MEMP

[drlink]

MEMP---Memorial Production downgraded to Underperform at Raymond James

[dan_s]

The upstream MLPs are stuck in the Wall Street "penalty box" and they will remain there until commodity prices move higher. MEMP does have some free cash flow because ....

< 99% of 2H 2016 Ngas hedged at $4.14
< 77% of 2H 2016 crude oil hedged at $65.85
< 97% of 2H 2016 NGL hedged at $34.01

They also have a high percentage of forecast production hedged at good prices for 2017.

As I have posted here many times, the biggest problem for the upstream MLPs is that they are cut off from the capital markets. Issuing equity at today's unit prices would be suicide and the debt players will not touch them.

[drlink]

RE MEMP- LINE was WELL HEDGED also.....and they went BK. How or why is MEMP different? Thanks

[dan_s]

MEMP is generating free cash flow that is being used to pay down their debt. It was the Berry acquisition that did in LINE.

Just like you cannot lump all C-Corps into one basket, all upstream MLPs are not the same. Go to the EPG website and download the MEMP forecast model (under the MLP tab). If you look at row 49 you will see "Cash flow from operating activities". MEMP will generate over $200 million this year from operations and their capex budget is $60 million. The excess is being used to pay down debt.

Banker are your friend as long as you can make interest and principle payments. BTW MEMP is still making small quarterly distributions to unit holders.