Street Earnings

Stock Grabbing Investor’s Attention: Memorial Production Partners LP (NASDAQ:MEMP)

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The shares of Memorial Production Partners LP (NASDAQ:MEMP) currently has mean rating of 3.27 while 1 analysts have recommended the shares as “BUY”, Zero recommended as “OUTPERFORM” and 6 recommended as “HOLD”. The rating score is on a scale of 1 to 5 where 1 stands for strong buy and 5 stands for sell.

The company’s mean estimate for sales for the current quarter ending Jun-16 is 124.12 million by 7 analysts. The means estimate of sales for the year ending Dec-16 is 430.33 million by 6 analysts.

The mean price target for the shares of Memorial Production Partners LP (NASDAQ:MEMP) is at 2.50 while the highest price target suggested by the analysts is 5.00 and low price target is 1.00. The mean price target is calculated keeping in view the consensus of 7 brokerage firms.

The average estimate of EPS for the current fiscal quarter for Memorial Production Partners LP (NASDAQ:MEMP) stands at -0.01 while the EPS for the current year is fixed at -0.29 by 6 analysts.

The next one year’s EPS estimate is set at -0.36 by 9 analysts while a year ago the analysts suggested the company’s EPS at -0.29. The analysts also projected the company’s long-term growth at -68.20% for the upcoming five years.

In its latest quarter ended on 31st March 2016, Memorial Production Partners LP (NASDAQ:MEMP) reported earnings of -$0.46. The posted earnings topped/missed the analyst’s consensus by -$0.43 with the surprise factor of -1433.30%. In the matter of earnings surprises, the term “Cockroach Effect” is often implied. Cockroach Effect is a market theory that suggests that when a company reveals bad news to the public, there may be many more related negative events that have yet to be revealed. In the case of earnings surprises, if a company is suggesting a negative earnings surprise it means there are more to come.

On June 20, 2016 Memorial Production Partners LP (MEMP) announced that it closed a transaction to sell certain assets located in the Permian Basin for cash consideration of approximately $37.4 million, subject to customary post-closing adjustments.  In addition, MEMP also announced today that it entered into a definitive agreement to sell certain of its non-core Rockies assets in Colorado and Wyoming for cash consideration of approximately $19.1 million, subject to customary purchase price adjustments.  The Rockies transaction is expected to close during the third quarter 2016 with an effective date of April 1, 2016.  Proceeds from the transactions will be used to reduce borrowings under MEMP’s revolving credit facility.

“Driving down costs, generating positive free cash flow and managing MEMP’s balance sheet is our key focus this year,” said John A. Weinzierl, Chairman and Chief Executive Officer.  “The divestiture of non-core properties in the Permian and Rockies is in line with our expectations and consistent with our strategy for 2016.  We also expect that the divestiture will enhance cash flow, improve operating efficiencies and better focus the partnership on our remaining core areas.”

The Permian Basin properties consisted of 285 gross (238 net) producing wells and produced approximately 1.2 MBoe/d during the first three months of 2016.  As of December 31, 2015, these assets contained estimated proved reserves of 3.1 MMBoe, or approximately 1% of the Partnership’s total estimated proved reserves of 1,268 Bcfe.

The Rockies properties consisted of 606 gross (188 net) producing wells and produced approximately 10.0 MMcfe/d during the first three months of 2016.  As of December 31, 2015, these assets contained estimated proved reserves of 25.5 Bcfe, or approximately 2% of the Partnership’s total estimated proved reserves of 1,268 Bcfe.

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