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Organization and Basis of Presentation
12 Months Ended
Dec. 31, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]  
Organization and Basis of Presentation

Note 1. Organization and Basis of Presentation

General

Memorial Production Partners LP (the “Partnership”) is a publicly traded Delaware limited partnership, the common units of which are listed on the NASDAQ Global Market (“NASDAQ”) under the symbol “MEMP.” See Note 2 for additional information regarding the Notice of Delisting. Unless the context requires otherwise, references to “we,” “us,” “our,” or “the Partnership” are intended to mean the business and operations of Memorial Production Partners LP and its consolidated subsidiaries.  

We operate in one reportable segment engaged in the acquisition, exploitation, development and production of oil and natural gas properties. Our management evaluates performance based on one reportable business segment as there are not different economic environments within the operation of our oil and natural gas properties. Our assets consist primarily of producing oil and natural gas properties and are located in Texas, Louisiana, Wyoming and offshore Southern California. Most of our oil and natural gas properties are located in large, mature oil and natural gas reservoirs. The Partnership’s properties consist primarily of operated and non-operated working interests in producing and undeveloped leasehold acreage and working interests in identified producing wells.

Unless the context requires otherwise, references to: (i) “our general partner” and “MEMP GP” refers to Memorial Production Partners GP LLC, our general partner and wholly-owned subsidiary; (ii) “Memorial Resource” refers to Memorial Resource Development Corp., the former owner of our general partner; (iii) “MRD LLC” refers to Memorial Resource Development LLC, which is the predecessor of Memorial Resource; (iv) “the Funds” refers collectively to Natural Gas Partners VIII, L.P., Natural Gas Partners IX, L.P. and NGP IX Offshore Holdings, L.P., which collectively control MRD Holdco; (v) “OLLC” refers to Memorial Production Operating LLC, our wholly-owned subsidiary through which we operate our properties; (vi) “Finance Corp.” refers to Memorial Production Finance Corporation, our wholly-owned subsidiary, whose activities are limited to co-issuing our debt securities and engaging in other activities incidental thereto; (vii) “MRD Holdco” refers to MRD Holdco LLC, which together with a group controlled Memorial Resource and  (viii) “NGP” refer to Natural Gas Partners.

On April 27, 2016, we entered into an agreement pursuant to which the Partnership agreed to acquire, among other things, all of the equity interests in our general partner, MEMP GP, from Memorial Resource (the “MEMP GP Acquisition”) for cash consideration of approximately $0.8 million. MEMP GP held an approximate 0.1% general partner interest and 50% of the incentive distribution rights ("IDRs") in us. In conjunction with the MEMP GP Acquisition, on April 27, 2016, we also entered into an agreement with an NGP affiliate pursuant to which we agreed to acquire the other 50% of the IDRs. The acquisition was accounted for as an equity transaction and no gain or loss was recognized as a result of the acquisition.

In connection with the closing of the transactions on June 1, 2016, our partnership agreement was amended and restated to, among other things, (i) convert the 0.1% general partner interest in the Partnership held by MEMP GP into a non-economic general partner interest, (ii) cancel the IDRs, and (iii) provide that the limited partners of the Partnership will elect the members of MEMP GP’s board of directors beginning with our next annual meeting. In addition, we terminated the omnibus agreement under which Memorial Resource provided management, administrative and operations personnel to us and our general partner, and we entered into a transition services agreement with Memorial Resource to manage certain post-closing separation costs and activities. See Note 13 for additional information regarding the MEMP GP Acquisition and the transition services agreement.

Previous Owners

References to “the previous owners” for accounting and financial reporting purposes refer collectively to certain oil and natural gas properties primarily located in East Texas and Louisiana that the Partnership acquired in February 2015 from certain operating subsidiaries of Memorial Resource in exchange for cash and certain of our oil and natural gas properties primarily located in North Louisiana. We refer to this transaction as the “Property Swap.” The acquired East Texas oil and natural gas properties were owned by Classic Hydrocarbons Holdings, L.P. or its subsidiaries (“Classic”).

The acquisition was accounted for as a transaction between entities under common control, similar to a pooling of interests, whereby the net assets acquired were recorded at historical cost and certain financial and other information has been retrospectively revised to give effect to such acquisition as if the Partnership owned the assets for periods after common control commenced through the acquisition date. See Note 13 for additional information.

Basis of Presentation

Our consolidated results of operations are presented together with the combined results of operations pertaining to the previous owners. The combined financial statements were derived from the historical accounting records of the previous owners and reflect the historical financial position, results of operations and cash flows for all periods presented.

The ownership interest of the noncontrolling shareholder in the San Pedro Bay Pipeline Company (“SPBPC”), an indirect majority-owned subsidiary of REO, was presented as noncontrolling interest in the financial statements for the periods prior to November 3, 2015. On November 3, 2015, we purchased the noncontrolling interest in SPBPC for approximately $6.0 million and completed an acquisition of the remaining interests in our oil and gas properties located offshore Southern California (the “Beta properties”) from a third party for approximately $94.6 million (the “2015 Beta Acquisition”). See Note 4 for additional information regarding the 2015 Beta Acquisition.

All material intercompany transactions and balances have been eliminated in preparation of our consolidated and combined financial statements. The accompanying consolidated and combined financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Certain amounts in the prior year financial statements have been reclassified to conform to current presentation. Gain on extinguishment of debt were previously accounted for as interest expense, net and are now being presented as other income (expenses) on our statements of operations on a separate line item.