BreitBurn Energy Partners L.P. (the "Partnership") (NASDAQ:BBEP)
announced today that it has completed two separate acquisitions of oil
and natural gas properties located in the Permian Basin in Texas from
Element Petroleum, LP and CrownRock, LP for approximately $150 million
and $70 million, respectively, subject to customary post-closing
adjustments. The transactions were previously announced on May 10, 2012.
Hal Washburn, CEO, said, "We are pleased to announce the closing of
these two excellent acquisitions which expand our portfolio to seven
states and give us an attractive platform for further acquisition
activity in the region. The deals are structured for BreitBurn to
operate Element and CrownRock’s existing oil and liquids-rich gas
producing assets, and for CrownRock to operate the majority of the
approximately 160 potential drilling locations. The non-operated
component of this transaction will allow us to leverage the expertise of
a high quality operator, thereby reducing our execution risk in the
play. We see great opportunities in the Permian Basin and with the
successful completion of these transactions, we believe we are well
positioned to further expand our portfolio in the region.”
Related Swaption Contracts Further Extend the
Partnership’s Attractive Hedge Portfolio
In conjunction with the announcement of the two acquisitions on May 10,
2012, the Partnership entered into certain swaption contracts for each
acquisition, providing the Partnership with the option to hedge crude
oil volumes listed below at the indicated NYMEX WTI prices. Based on
current market conditions, Management expects to exercise the
Partnership’s options to enter into these contracts on July 16, 2012,
the options’ expiry and exercise date. These contracts, if executed,
will extend the Partnership’s hedge portfolio into 2017 at attractive
prices.
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Element Acquisition
|
|
|
|
|
|
|
|
Contract Period
|
WTI Contract Price*
|
Bbls/day
|
|
Aug – Dec 2012
|
$98.35
|
333
|
|
Jan – Dec 2013
|
$97.05
|
233
|
|
Jan – Dec 2014
|
$93.00
|
180
|
|
Jan – Dec 2015
|
$90.00
|
147
|
|
Jan – Dec 2016
|
$88.45
|
127
|
|
Jan – Jun 2017
|
$87.80
|
115
|
|
|
|
|
|
*Represents at-the-money swap prices as of the date the swaption
contracts were entered into.
|
|
|
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CrownRock Acquisition
|
|
|
|
|
|
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Contract Period
|
WTI Contract Price*
|
Bbls/day
|
|
Aug – Dec 2012
|
$ 98.35
|
322
|
|
Jan – Dec 2013
|
$ 97.05
|
226
|
|
Jan – Dec 2014
|
$ 93.00
|
174
|
|
Jan – Dec 2015
|
$ 90.00
|
142
|
|
Jan – Dec 2016
|
$ 88.45
|
122
|
|
Jan – Jun 2017
|
$ 87.80
|
111
|
|
|
|
|
|
*Represents at-the-money swap prices as of the date the swaption
contracts were entered into.
|
|
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About BreitBurn Energy Partners L.P.
BreitBurn Energy Partners L.P. is a publicly-traded independent oil and
gas limited partnership focused on the acquisition, exploitation,
development and production of oil and gas properties. The Partnership’s
producing and non-producing crude oil and natural gas reserves are
located in Michigan, Wyoming, California, Texas, Florida, Indiana, and
Kentucky. See www.BreitBurn.com
for more information.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains forward-looking statements relating to the
Partnership’s operations that are based on management's current
expectations, estimates and projections about its operations. Words and
phrases such as “expects,” “continue,” “future,” “will be” and
variations of such words and similar expressions are intended to
identify such forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and other factors, some of which are beyond our control
and are difficult to predict. These include risks relating to the
Partnership’s financial performance and results, availability of
sufficient cash flow and other sources of liquidity to execute our
business plan, prices and demand for natural gas and oil, increases in
operating costs, uncertainties inherent in estimating our reserves and
production, our ability to replace reserves and efficiently develop our
current reserves, political and regulatory developments relating to
taxes, derivatives and our oil and gas operations, risks relating to our
acquisitions, and the factors set forth under the heading “Risk Factors”
incorporated by reference from our Annual Report on Form 10-K filed with
the Securities and Exchange Commission, and if applicable, our Quarterly
Reports on Form 10-Q and our Current Reports on Form 8-K. Therefore,
actual outcomes and results may differ materially from what is expressed
or forecasted in such forward-looking statements. The reader should not
place undue reliance on these forward-looking statements, which speak
only as of the date of this press release. Unless legally required, the
Partnership undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. Unpredictable or unknown factors not
discussed herein also could have material adverse effects on
forward-looking statements.
BBEP-IR
