Welcome to the Memorial Production Partners LP Second 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 Tuesday, August 9, by dialing (855) 859-2056 and then entering conference ID number 52712193, 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 second 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 August 9, 2016. Also, non-GAAP financial measures may be disclosed during this call. Reconciliations of those measures to 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, Martyn. We appreciate you joining us today to discuss MEMP's second quarter 2016 results. I'd like to start by updating you on the progress we have made on our goals for 2016. Our primary goals for 2016 are to generate free cash flow, increased liquidity and delever the balance sheet. During the second quarter, we continued to make significant progress on all of these goals. Over the last year, we have generated significant free cash flow by focusing on what we can control, which are capital spending, operating costs and credit-enhancing asset sales. First, on capital expenditures. We have revised the midpoint of our guidance to $60 million, a $150 million reduction versus the level in 2015, while sustaining our commitment to maintaining our facilities and equipment to ensure reliability and safety. Our commitment to operational efficiencies continues to show in our results. MEMP's operating costs have been significantly reduced by over 30% year-over-year and are reflected in our updated guidance. We will provide additional color on the operating costs later in our remarks. Moving to asset sales. We completed the sales of our noncore assets in the Permian Rockies for aggregate proceeds of approximately $55 million. These divestitures provide further organizational efficiencies, lower our cost structure and generate funds for paying down debt. The proceeds from these efforts, along with some associated hedge liquidations in our aftermarket equity program, have been utilized to significantly reduce our debt over the last quarter. So far this year, we have been able to repurchase $84 million of senior notes as well as reduce our revolving credit facility balance by $113 million since year-end 2015. These actions reduced total debt by $197 million and provided a partnership of approximately $200 million in current liquidity. Turning to the second quarter of distribution. The Board of Directors of MEMP's General Partner has approved MEMP's quarterly distribution of $0.03 per unit for the second quarter 2016, which is consistent with our first quarter distribution. While many in the industry have been forced to suspend distributions due to the prolonged commodity downturn, our board continues to believe that providing our unitholders with the quarterly distribution is in the best interest of MEMP and is pleased that our distribution can be maintained with the support of our strong asset base and hedge portfolio. As a reminder, the second quarter 2016 distribution will be paid on August 12 to unitholders of record on August 5. I'm encouraged with our strategic progress and strong results so far in 2016. We are committed to work hard to strengthen the partnership. While we have made significant steps on our path to improving our balance sheet, we will continue to look at a variety of broader debt-reduction solutions. We thank our stakeholders for their continued support as we position MEMP for long-term success. Now, I'll turn the call over to our President, Bill Scarff.

Thank you, John. Memorial continues to outperform by driving down our costs and managing our cash flows effectively. The partnership delivered excellent results in the second quarter. Net cash provided by operating activities outpaced first quarter results and adjusted EBITDA exceeded our expectations based on previously announced annual guidance. In addition to our operational progress, we closed the purchase of MEMP's GP from our prior sponsor, Memorial Resource Development Corp. We believe this transaction will have numerous benefits for unitholders, including a more-focused employee base, elimination of the incentive distribution rights, as well as a more streamlined corporate structure. We are very pleased to have concluded this transaction, and we believe the resulting organizational structure will make the partnership more nimble, more efficient and more effective going forward. Turning our attention to operations. Total lease operating expenses for the partnership decreased 18% to $29.4 million in the second quarter compared to $35.7 million in the first quarter. These results are the culmination of numerous strategic and operational improvements enacted over the last year and reflect the strong efforts of the entire organization. As John mentioned, MEMP recently closed noncore divestitures in the Permian and the Rockies for a combined proceeds of approximately $55 million that exceeded our expectations. These divestitures have minimal impact on our financial position with only a small borrowing base in 2016 cash flow impact. Operationally, these divestitures will reduce our cost structure going forward and allow us to increase our focus on the core assets that will drive future growth. In aggregate, the divested properties had total proved reserves of 44.1 Bcf equivalent and average net daily production of 17.9 million cubic feet equivalent per day. G&A for the second quarter was slightly lower than first quarter 2016 after excluding onetime noncash bad debt expense that was recognized primarily as a result of the asset divestitures. Following the conclusion of the MEMP GP purchase, our separation from MRD and the asset divestitures, we expect G&A to trend down to approximately $9.5 million per quarter on a recurring cash basis for the remainder of 2016. We are also reducing our capital forecast for the year as we have pushed project costs lower than anticipated. We are now forecasting capital costs for full year 2016 of $55 million to $65 million versus initial guidance of $65 million to $75 million. As already mentioned today and on prior calls, our plan this year is to generate positive free cash flow, drive down costs, reduce debt and enhance liquidity. Our entire workforce is focused on all of these drivers, and I want to thank each member of the Memorial team for your efforts and contributions. Following another successful quarter, I'm pleased to say that we remain on track to accomplish our goals for the year, and we look forward to continuing to deliver positive results in future periods. Now, Chris Cooper will walk you through our operating performance in greater detail. Chris?

Thank you, Bill. As previously mentioned, we delivered very strong operating results this quarter, especially with respect to costs and along with the sale of the Permian and noncore Rockies assets took positive steps to further improve the operating efficiency of our portfolio, the impact of which will be more fully realized in future quarters. Reduction for the second quarter averaged approximately 231 million cubic feet equivalent per day, a decrease of 5% from the previous quarter and 7% lower than second quarter of 2015. Production for the quarter was in line with our expectations and included the impact of the annual 14-day turnaround at the Bairoil facility for maintenance and regulatory purposes, as well as the sale of the Permian asset in June. Production guidance for the full year 2016 has been adjusted to be between 215 million and 230 million cubic feet equivalent per day primarily to reflect the divestiture of the Permian and noncore Rockies assets, as well as other production trends across the portfolio. We saw operating expenses in the second quarter were $1.39 per Mcfe, a decrease of 14% from the previous quarter and 30% lower than the second quarter of 2015. We are very pleased of the results of our ongoing cost reduction program that included further service provider cost discounts, a reduction of compression facilities in East Texas, prudent management of discretional activities such as well workovers, better-than-expected performance of the saltwater disposal system in East Texas and the sale of the higher operating costs, Permian asset in June. This operating cost guidance for the year has been adjusted to be between $1.55 and $1.65 per Mcfe to reflect asset sales as well as recent cost trends across the portfolio. This guidance implies slightly higher cost per Mcfe in the second half of 2016 due to increased workover activity and the impact of declining production. Gathering, processing and transportation charges in the second quarter were $0.42 per Mcfe, which is in line with expectations and flat from the first quarter. Our updated guidance assumes that this will remain flat through the remainder of 2016, but reducing our GP&T cost is an area of focus for the partnership, and we hope to make material improvements in future periods. Capital spending for the quarter was approximately $10 million compared to $24 million in the previous quarter and $59 million in the second quarter of 2015. The bulk of the capital spend this quarter was associated with upgrades implemented during the Bairoil turnaround. Current capital spending levels are reflective of prudent management of discretion projects in the current commodity price environment and our goal to maximize free cash flow. As Bill mentioned, capital cost guidance for the year has been reduced to be between $55 million and $65 million, which includes an $8 million contribution to the beta decommissioning fund. With that, I will now hand it off to Bobby Stillwell to walk you through our financials. Bobby?

Thank you, Chris. I'd like to start by summarizing some additional financial results for the quarter, followed by an update on our liquidity, hedge positions and updated guidance. Net cash provided by operating activities was $79 million for the second quarter, a $2 million increase from the first quarter. Adjusted EBITDA for the second quarter was $84.1 million, which was a significant leap versus our previously announced annual guidance expectations, and an increase of $2.8 million from the first quarter. The increase in net operating cash flow and adjusted EBITDA was largely a result of the previously discussed operating cost improvements. G&A in the second quarter was $15.2 million, but included noncash charges for bad debt expense of $1.6 million, transaction-related costs of $900,000 and noncash charges of $2.5 million per unit-based compensation expenses. So that's a recurring cash run rate of $10.2 million per quarter, in line with our annual guidance expectations. As Bill previously stated, 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. Since year-end 2015, we have made great strides lowering total debt by $197 million. This has come through free cash flow generation, open-market repurchases and asset divestitures. Lowering total debt remains a key focus and strategy for the partnership going forward. As we are able, we will continue to execute on market repurchases of our high-yield notes, whether it be through our ATM equity program or as the credit facility allows. And as was the case with the recent divestitures, we will continue to evaluate further asset sales that are credit and liquidity enhancing. In regard to MEMP's revolver debt, outstanding has fallen by $113 million since year-end. As of July 29, our revolver balance currently…

[Operator Instructions] Your first question comes from the line of Chad Mabry.

Nice work on the debt buybacks this quarter. My question actually would be the ability to make any more progress on this initiative. Bob, you touched on this, but just curious if you can share with us order of magnitude on the asset sales that you have left in the portfolio or maybe an update on the beta bonding.

Absolutely. This is Bill. Well, first, let's talk about divestitures. As we mentioned, we closed a couple in the quarter. Permian was a complete exit for us, and we closed the noncore Rockies. The total proceeds from those transactions totaled $55 million. With respect to prospective divestitures, as a result of the Permian exit, we're now in 4 basins. From day 1, asset naturalization has been part of our strategy. So that's going to continue. But particularly, in this environment, asset sales -- we look at asset sales in this rationalization it must be credit and liquidity enhancing. So there's a filter there that we'll lay, and we want to be thoughtful about the process. But as we work through the balance sheet issues, we'll continue to consider additional divestitures with obviously a bias towards noncore assets. I can't guide you to number of divestitures but that should probably help you with respect to strategy.

Yes, that's very helpful. And then I guess any updates on beta. Is that still on the table, the bond funding?

Yes, it is, I think. We talked with Bobby and the team here, we've got $152 million funding obligation by year-end. We believe that there's an opportunity to issue surety bonds for some part of that obligation but there are multiple parties involved: a couple of federal agencies, some predecessors entitled, the trustee of the camp, so lot of moving parts. But then being fair, we're working hard, and we hope to have this resolved by year end.

And a follow-up, if I could. You mentioned on CapEx coming down a little bit. Anything specific cut out of the budget. Is that nonop or just any color there that you could add?

We're just really being more judicious about the capital project particularly, workovers that we've undertaken this year, particularly in Q1, the prices were as low as they were. It even makes sense still, so fully driven by economics and being certainly judicious about these correctional projects.

Yes, just more clarity on that. The CapEx program has always been front half weighted for the year.

Ladies and gentlemen, this brings us to the end of the Q&A portion. I'll now turn the call back to the presenters for final remarks.

Thank you, everybody, for joining us on the call today. As always, please don't hesitate to reach out to us if you have any further questions, we're always available. Thank you.

Ladies and gentlemen, this concludes today's conference call. You may now disconnect.