PHP Composer update “cannot allocate memory” error (using Laravel 4)

Looks like you runs out of swap memory,
try this

/bin/dd if=/dev/zero of=/var/swap.1 bs=1M count=1024
/sbin/mkswap /var/swap.1
/sbin/swapon /var/swap.1

as mentioned by @BlackBurn027 on comments below, this solution was described in here

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