BreitBurn Energy Partners L.P. Announces Closing of Two Permian Basin Acquisitions Totaling Approximately $220 Million

abarrelfullabarrelfull wrote on 03 Jul 2012 11:46
Tags: breitburn deals n-america upstream usa

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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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