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Memorial Production Partners' borrowing base cut 21%

Memorial ProductionPartners LP's credit facility borrowing base was cut by 21%, to $925million, in the semiannual redetermination.

"The downward revision on the borrowing base is largelyattributable to the deterioration of commodity prices and was in-line with our expectations,"John Weinzierl, chairman and CEO of Memorial Production's general partner, saidin an April 14 news release.

In addition, Memorial Production and the commercial bank lendinggroup agreed to amend certain terms of the partnership's revolving credit facility.Memorial Production's revolving credit facility will have a maximum first-lien securedleverage covenant of 3.25x, up from its first-lien secured leverage ratio of 2.5xduring the fourth quarter of 2015.

Memorial Production may also only make a maximum total cash distributionof $4.15 million per quarter if its total debt ratio is greater than 4x. If thetotal debt ratio is less than 4x, the partnership may make a distribution only ifit has availability of at least 15% of the borrowing base, according to the release.The partnership had an estimated total debt ratio of 5.9x during the fourth quarterof 2015. With about 82.9 million common units outstanding, the maximum possiblequarterly distribution per unit for the partnership would be 5 cents per unit.

Pro forma for the revised borrowing base, Memorial Production'savailable borrowing capacity as of March 31 would have been $131 million, including$2.1 million in letters of credit. As of the same date, the partnership had totaldebt outstanding of $2 billion, including $1.2 billion of senior notes and $792million under its revolving credit facility.