UPDATE: Citigroup Reiterates Buy Rating, Raises PT on Memorial Production Partners

In a report published Monday, Citigroup reiterated its Buy rating on Memorial Production Partners LP (NASDAQ: MEMP), but slightly raised its price target from $20.50 to $20.00.

Citigroup noted, “We are fine-tuning our model to reflect the: 1) 10.5 million (12.1 million including the shoe) unit offering, 2) completion of the recently announced acquisition of offshore California assets and, 3) hedges layered in by the partnership. Overall, we are decreasing our target price modestly as the size of the offering was higher than our initial assumption of 11 million units. In addition, the offer price was lower than our estimate. Pro forma for the offering, we estimate 2012E Debt to EBITDA and percentage drawn to be 4.8x and 80%, respectively. In addition, we estimate Debt to EBITDA of 3.2x in 2013E.”

Memorial Production Partners LP closed on Friday at $17.49.

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