Memorial Resource Prices Upsized IPO At $19/share, Said To Raise $813 Mln

(RTTNews) - Natural-gas drilling company Memorial Resource Development Corp. (MRD) on Friday priced its upsized initial public offering of 42.80 million shares of its common stock at $19.00 per share, above the estimated range. The offering is said to have raised gross proceeds of about $813.2 million. The company's shares are expected to begin trading on the NASDAQ Global Select Market today under the ticker symbol "MRD."

Memorial Resource said it is offering 21.50 million shares of its common stock, and the selling stockholder, MRD Holdco LLC, is offering 21.30 million shares of its common stock in the IPO. The company added that it will not receive any proceeds from the sale of the shares by the selling stockholder.

The selling stockholder has also granted the underwriters a 30-day option to purchase up to an additional 6.42 million shares of common stock at the IPO price to cover over-allotments, if any.

The company has now reduced its IPO offering from 24.50 million shares of its common stock, while the selling stockholder has increased its offering from the initial 11.50 million shares of common stock.

The Huston, Texas-based company had earlier revealed in an amended Form S-1 filing with the U.S. Securities and Exchange Commission on June 2 that it will sell 36.00 million shares of its common stock at an estimated price range between $16.00 and $18.00 for expected proceeds of $745.2 million.

The offering is expected to close on June 18, subject to customary closing conditions. Memorial Resource publicly filed an initial registration statement on form S-1 with the SEC for a $700 million IPO on April 4, 2014. Memorial Resource initially filed confidentially on February 6, 2014.

After the closing of the offering, the company said it will have an aggregate of 192.50 million shares of common stock outstanding, immediately valuing the company at about $3.66 billion.

Memorial Resource said it intends to use the net proceeds from the offering to redeem its 10.00% / 10.75% Senior PIK Toggle Notes due 2018 in their entirety, to repay borrowings under its new revolving credit facility, and to pay a portion of the consideration for certain assets being contributed to the Company at the closing of the offering.

Following the completion of this offering, MRD Holdco, the selling stockholder, will own about 60.1 percent of the company's common stock or about 57.3 percent, if the underwriters exercise their option in full. The company said it currently intend to retain all future earnings, if any, for use in the operation of our business and to fund future growth.

Memorial Resource Development is an independent natural gas and oil company engaged in the acquisition, exploration and development of natural gas and oil properties primarily in the Terryville Complex of North Louisiana and East Texas.

As of December 31, 2013, the company had had estimated proved, probable and possible reserves of about 1,126 Bcfe, 800 Bcfe and 1,711 Bcfe, respectively.

Citigroup and Barclays are acting as joint book-running managers for the offering. BofA Merrill Lynch, BMO Capital Markets, Goldman, Sachs & Co., Raymond James, RBC Capital Markets and Wells Fargo Securities are also acting as book-running managers for the offering.