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Memorial Resource Development Drilling 40 Wells in H2 2015

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Memorial Resource Development Corp. has announced its operating and financial results for the three months ended June 30, 2015.

Financial highlights from second quarter 2015 include:

• Increased average daily production 39% to 268 MMcfe/d for the second quarter 2015 compared to 193 MMcfe/d for the second quarter 2014
• Completed 2 gross horizontal wells in the second quarter 2015 including:
• The one well Drewett pad reported a thirty-day initial production (IP) rate of 27.7 MMcfe/d and had a lateral length of 7,458 feet
• The one well Aulds pad reported a thirty-day IP rate of 17.2 MMcfe/d and had a lateral length of 6,905 feet
• Added 31,157 net acres year-to-date in and around the Terryville Field through MRD's active leasing program
• As of July 31, 2015, MRD owned 107,109 gross (92,314 net) acres in the Terryville Field, representing a 79% increase in MRD's net acreage position since its initial public offering

Second Quarter 2015 Results

• Net production increased 39% year-over-year to 268 MMcfe/d for the second quarter 2015 compared to 193 MMcfe/d for the second quarter 2014. Second quarter 2015 net production consisted of 203 MMcf/d of natural gas (76%), 7.4 MBbls/d of natural gas liquids (NGLs) (16%) and 3.5 MBbls/d of crude oil (8%).
• Lease operating expense (LOE) for the second quarter 2015 was $3.9 million, or $0.16 per Mcfe, compared to $4.8 million, or $0.27 per Mcfe, for the second quarter 2014.
• Drilling and completion (D&C) capital expenditures, excluding leasehold and including facilities and capital workovers, totaled $110.2 million in the second quarter 2015. During the first half 2015, MRD's D&C capital expenditures, excluding leasehold and including facilities and capital workovers, were approximately $199.1 million, and MRD directed approximately 100% of its capital program to the Terryville Field during this time.

Operational Update

• MRD reported second quarter and first half 2015 average daily production of 268 MMcfe/d and 272 MMcfe/d, respectively. MRD brought online a total of 2 gross horizontal wells in the second quarter 2015 consisting of the Drewett and Aulds pads. Second quarter and first half 2015 production benefitted from positive performance from wells brought online during the first half 2015.
• In April 2015, MRD brought online the Drewett well, which is located in the northwest section of the Terryville Field. This well achieved a thirty-day IP rate of approximately 27.7 MMcfe/d and had a lateral length of 7,458 feet.
• In May 2015, MRD brought online the Aulds well, which is located approximately 2.75 miles east of the Louisiana Methodist Orphanage well (LMO). This well achieved a thirty-day IP rate of approximately 17.2 MMcfe/d and had a lateral length of 6,905 feet.
• strong>MRD turned 4 new pads to sales during July 2015, including the Dowling, Dunn Estate, TL McCrary and Wright pads. These pads included a total of 13 gross wells consisting of 9 Upper Red, 3 Lower Red and 1 Upper Deep Pink wells. Initial flowback rates from these wells have been encouraging, and management anticipates providing full thirty-day IP rates upon their availability at a later date. As of July 31, 2015, MRD had a total of 70 horizontal wells producing from its four primary zones in the Terryville Field.
• In total, MRD expects to bring online approximately 20 to 23 wells during the third quarter 2015 and approximately 35 to 40 wells in total during the second half 2015. 
• MRD's new well completions for 2015 are expected to have an average working interest of approximately 90%.

Previously Announced Full-Year 2015 Operational and Financial Guidance

• MRD reiterated its full-year 2015 operational and capital budget guidance provided on February 24, 2015. Assuming the execution of its capital plan, MRD's production guidance range for the fiscal year 2015 is 325 to 365 MMcfe/d, which implies 77% year-over-year production growth (using the mid-point of 2015 guidance range). 
• MRD's full-year 2015 D&C capital expenditures are expected to range between $475 to $525 million.

Terryville Field Acquisitions and Lease Additions

• MRD continues to increase its ownership in and around the Terryville Field through acreage acquisitions and an active leasing program. Year-to-date, MRD has added 31,157 net acres in the Terryville Field. As of July 31, 2015, MRD had 107,109 gross (92,314 net) acres in the Terryville Field, which represents a 79% increase in net acres since its initial public offering.

Terryville Field Natural Gas Processing Update

• MRD has secured future processing capacity to accommodate the expected increase in production in the Terryville Field. In May, MRD gained access to 200 MMcf/d of cryogenic processing capacity through agreements with PennTex Midstream Partners, LP (PennTex).
• MRD expects to have access to an additional 200 MMcf/d of cryogenic processing capacity from PennTex on or about the fourth quarter 2015.

Financial Update

• Total debt outstanding as of June 30, 2015 was $765.0 million, including $165.0 million of debt outstanding under MRD's revolving credit facility and $600.0 million of senior notes due 2022. As of June 30, 2015, MRD's liquidity of $564.5 million consisted of $4.5 million of cash and cash equivalents and $560.0 million of availability under its revolving credit facility. The next re-determination of the borrowing base utilizing mid-year 2015 reserves is scheduled to occur in October 2015.

Hedging Update

• MRD utilizes its hedging program to mitigate financial risks and the effects of commodity price volatility. Total hedged production in the second quarter of 2015 was 21.8 Bcfe, or 89% of second quarter production of 24.4 Bcfe, which settled at an average hedge price of $4.96 per Mcfe. As of August 5, 2015, MRD has hedged approximately 71% of its expected remaining 2015 production on an equivalent basis (using the mid-point of MRD's guidance range). As of June 30, 2015, the mark-to-market value of MRD's hedge book was approximately $263 million.
• In an effort to hedge a higher percentage of expected production and protect its future capital budget, in the second quarter 2015, MRD entered into additional deferred premium put contracts for certain natural gas volumes. Specifically, MRD added natural gas deferred premium puts in the amounts of 22,800,000, 22,800,000 and 7,200,000 MMBtu for the years covering 2016, 2017 and 2018, respectively.