Welcome to the Memorial Production Partners LP First Quarter 2016 Investor Conference Call. Memorial's operating and financial results were released earlier today and are available on Memorial's website at www.memorialpp.com. [Operator Instructions] Today's call is being recorded. A replay of the call will be accessible until Wednesday, May 10, by dialing (855) 859-2056 and then entering conference ID number 97479536, or by visiting Memorial's website, www.memorialpp.com. I would now like to turn the conference over to Martyn Willsher, Treasurer of Memorial Production Partners LP.

Good morning, and welcome to the Memorial Production Partners LP conference call to discuss operating and financial results for the first quarter 2016. We appreciate you joining us today. John Weinzierl, Memorial's Chairman and Chief Executive Officer, will lead the call; followed by Bill Scarff, our President; Chris Cooper, our Senior Vice President and Chief Operating Officer; and Bobby Stillwell, our Chief Financial Officer. Afterwards, securities analysts will be invited to participate in a question-and-answer session. Please note that some of the remarks and answers to questions by management may contain forward-looking statements and are based on certain assumptions and expectations of management. These remarks and answers reflect management's current views with regard to future events and are subject to various risks, uncertainties and assumptions. Although management believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct, and undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this earnings call. Forward-looking statements include, but are not limited to, our statements about and our discussion of our full year 2016 guidance. Please refer to our press release and our SEC filings for a list of factors that may cause actual results to differ materially from those in the forward-looking statements made during this call. In addition, the preliminary unaudited financial information that will be highlighted is derived from our internal financial books, records and reports. For additional detailed disclosure, we encourage you to read our quarterly report on form 10-Q, which we expect to file on or before May 6, 2016. Also, non-GAAP financial measures may be disclosed during this call. Reconciliations of those measures to their comparable GAAP measures may be found in our press release or on our website at www.memorialpp.com. With this in mind, I will now turn the call over to John Weinzierl. John?

Thanks, Martin. Welcome, everyone, and thank you for joining us today to discuss our first quarter 2016 results. I want to start with a brief discussion concerning the recent announcement regarding the purchase of the Memorial Production Partners' general partner interest from our sponsor, Memorial Resource Development. Our relationship with Memorial Resource Development has been integral to the growth and success of both organizations, but we believe we have reached the point where simplifying the entity structure is the best option to create long-term value for our stakeholders. At the close of this transaction, we will have full ownership and control of the general partner. We believe the transaction will have additional benefits for unitholders, including an increase in the focus of employees on MEMP assets, and the general partner will provide MEMP unitholders with voting rights to elect the MEMP board. As the transaction progresses toward closing, we will ensure that the transition proceeds with minimal disruptions or delays, and we expect there will be no impact to the partnership's operational performance. Going forward, we are very excited about the transaction and we look forward to the continued development of the partnership out of the new streamlined organizational structure. Turning to the first quarter. I want to address our recent distribution announcement. Despite another quarter of strong results, the Board of Directors of MEMP's general partner made the decision to reduce MEMP's quarterly distribution from $0.10 to $0.03 per unit for the first quarter 2016. This decision was due to continued low commodity prices and additional restrictions placed on distributions under the terms of our credit facility. Including the impact of the distribution reduction, continued cost-cutting efforts and execution of our development plan, we expect the free cash flow generated this year will enhance liquidity and reduce leverage at the partnership. Lastly, while many in the industry had been forced to suspend distributions due to the prolonged commodity downturn, our board continues to believe that providing our unitholders with a quarterly distribution is in the best interest of MEMP and are pleased that our distribution can be maintained with the support of our strong asset base and hedged portfolio. As a reminder, the first quarter 2016 distribution will be paid on May 13 to unitholders of record on May 6. I remain confident in the measures we've taken so far this year and I'm pleased that our operating results continue to reflect the efforts of our hard-working employees across the organization. We thank our stakeholders for their continued support as we position MEMP for long-term success. Now I will turn the call over to our President, Bill Scarff, to discuss quarterly results.

Thank you, John. I want to reiterate our commitment to managing the partnership conservatively and taking the necessary steps that will strategically position MEMP to be successful over the long term. The partnership had a strong first quarter. Our operating performance exceeded management's expectations and was driven by continuing success in reducing our operating cost. We initiated several material cost-cutting measures in the first quarter such as non-core asset divestitures and staff reductions, which we believe will improve our organizational efficiency and cost structure moving forward. Meanwhile, our team continues to execute with excellence and the nimbleness required to succeed in this environment. For comparison purposes, first quarter average daily production was 243 million cubic feet equivalent versus 257 million cubic feet equivalent in the fourth quarter of 2015. As a reminder, we are expecting 2016 production to trend lower during the year due to a significantly reduced capital program. Adjusted EBITDA of $81 million for the first quarter was higher than management anticipated based on our annual guidance as a decrease in realized pricing was offset by reduced operating costs that exceeded our expectations. G&A was largely in line with fourth quarter 2015, despite the inclusion of a full quarter of the Beta acquisition and onetime severance payments related to a reduction in force that also occurred during the first quarter. While the reduction in force was a very difficult event within the organization, we owe it to our stakeholders to operate in an efficient manner during this extended commodity downturn and we believe this was a necessary step toward that goal. Across the entire Memorial organization, we reduced headcount by approximately 15% during the first quarter and have now reduced organizational headcount by approximately 25% compared to last summer. We anticipate G&A trending down on a total cost basis through the year as a result of reduced headcount and other G&A initiatives enacted across the company. As previously mentioned, our plan this year is to focus on the following goals: Generate positive free cash flow, drive down cost, reduce debt and enhance liquidity. I'm pleased to say that we remain on track to accomplish those goals and look forward to continuing to deliver positive results on a consistent basis. Now, Chris Cooper will walk you through our operating performance in greater detail. Chris?

Thank you, Bill. Production for the first quarter averaged approximately 243 million cubic feet equivalent per day, a decrease of 5% from the previous quarter and 4% lower than the first quarter of 2015. While this compares favorably with our annual guidance that ranges from 228 million to 243 million cubic feet equivalent per day, the quarter-over-quarter decrease was slightly higher than expected due to flooding in our East Texas asset together with the temporary shutdown of our Bairoil asset due to mechanical failure. These short-term issues were resolved in the first quarter and should not impact production volumes going forward. It is noted, however, that production in the second quarter of 2016 is expected to be lower than the first quarter due to a planned 14-day shutdown of our Bairoil asset for maintenance and regulatory purposes. While it did not impact this quarter's results, one of our partners in our non-operated Eagle Ford position advised us of their intent to not complete any well this year due to the current price environment. This is expected to impact annual results by 2 million to 3 million cubic feet equivalent per day in 2016 but will provide the partnership with low-cost, high-return completion opportunities when prices recover. Given our objective to maximize the generation of free cash flow, at this time, we will not be seeking alternative investment opportunities for the associated development capital. Lease operating expenses in the first quarter were $1.61 per Mcfe, an increase of 2% from the previous quarter and 10% lower than the first quarter of 2015. This compares very favorably to our guidance for the year that ranges from $1.85 to $2 per Mcfe. Also, on an absolute dollar basis and normalizing for the impact of one-off credits and acquisitions, lease operating expenses were down…

Thank you, Chris. I'd like to start by summarizing our financial results for the quarter followed by an update on our liquidity and recent credit facility amendment and conclude with our hedge position. Again, adjusted EBITDA for the first quarter was $81 million, which exceeded our internal targets. As previously discussed, production was largely in line with operating cost of $35.7 million and significantly beat our targets. Covering a few other line items. Gathering, processing and transportation costs of $0.42 per Mcfe or $9.2 million were also in line with expectations. G&A in the first quarter of 2016 was $13.5 million and included noncash charges of $2.6 million for unit-based compensation expenses and onetime charges associated with the reduction in force. So that's a cash run rate of $10.9 million per quarter, in line with our annual guidance expectations. Given the staff reductions and some other efficiencies realized, we expect to see that run rate total dollar figure trend down over the course of the year. Now moving on to discussion of debt and liquidity. On April 14, we announced our semiannual borrowing base redetermination, which resulted in a revised borrowing base of $925 million, a decrease of 21% from the previous level and in line with our expectations. In addition to the revised borrowing base, the partnership and the commercial lending group agreed to amend certain terms of MEMP's credit facility. The new terms included a maximum first lien secured leverage covenant of 3.25x and, as John mentioned earlier, additional restrictions were placed on future cash distributions based on total leverage, liquidity and other financial tests. We'd again like to thank our 28-member bank group as we recognize this is a difficult environment for all parties. All in, we view the spring redetermination as a successful outcome, given that…

[Operator Instructions] And your first question is from Chad Mabry from FBR Capital.

Just curious to get your thoughts on capital deployment, given what is expected to be a pretty strong cash flow profile this year. How do you rank debt buybacks or revolver paydown versus, say, increasing CapEx now that the gas strip has moved a bit higher?

Chad, this is Bill. As I stated in my remarks, one of our priorities for the year is liquidity enhancement and debt reduction. So we'll see that our cash is going to be directed in that area. We intend to pay down debt.

Yes, and adding to that. The high-yield buybacks are certainly the most lucrative thing we can be doing in our portfolio. Across any option, including drilling wells, so that's going to be a focus going forward, as we mentioned and as Bill mentioned just now. So that's a big focus for the balance of the year. I wouldn't expect us to change our CapEx profile going forward, despite some modest rebound in prices.

Great. And sticking with that, I guess, another liquidity enhancement initiative that you guys had mentioned previously was the potential bond funding of the Beta asset. Is that still on track for maybe Q3 timing, I think you said last time?

Yes, absolutely. Expect that we'll have something to announce there this summer. We're working with the government, which we received positive signals on that consistently. But you're working with the government and -- at their pace.

Okay. And that could free up about $60 million?

Yes.

Your next question is from Brian Brungardt with Stifel.

Bobby, you kind of touched on it here at the end of your prepared comments. But as we look at operating expenses, how should we think about LOE per Mcfe as the year progresses? As production declines are through 2016, it sounds like you expect that metric to creep up. But given the strong first quarter results, are you still confident in the prior guidance for the year?

Yes, Brian, this is Chris. Our projection for full year LOE is to beat the very low range of our guidance range, which you'll recall is $1.85 to $2. The current rates you've seen at $1.60 that was seen in Q4 and Q1 recently, we believe, are going to uptick here over the rest of the year for a number of reasons. First of all, as I mentioned in my remarks, we'll going to have a planned shutdown of our Bairoil facility in Q2. So we'll continue to incur the effects of LOE costs associated with that and we'll obviously loose the production for that period of time. We also expect to increase our work-over and maintenance activity levels over the next few quarters just because we can't sustain the current levels we've seen in Q1 and Q4. And then of course, the other factor is the production decline we're expecting over the next few quarters associated with the significantly reduced capital development program. So all of those factors will result in a slight uptick on a dollar per Mcfe basis. But just to reiterate, we're forecasting for the year to come in at the very low end of our guidance range of $1.85 to $2.

And that was our last question. At this time, I will now turn the call back over to the presenters.

Thank you, everybody. We appreciate you joining us on the call today and look forward to keeping you posted throughout the year and talking to you next quarter. Have a great day.

This concludes today's conference call. You may now disconnect.