BreitBurn Energy To Gain Texas Assets In Two Deals

To acquire 4,600 net acres in TX Permian Basin, gaining 2,100 BOE/d, 9.5 MMBOE proved.

BreitBurn Energy Partners LP, Los Angeles, (Nasdaq: BBEP) has signed two separate agreements to acquire oil and natural gas properties in the Permian Basin in Texas for a combined price of approximately $220 million.

The assets include 4,600 net acres featuring approximately 40 existing wells and more than 160 potential drilling locations. Net production is 2,100 barrels of oil equivalent per day (56% oil). Proved reserves are approximately 9.5million barrels equivalent.

BreitBurn Energy chief executive Hal Washburn says, “We are very pleased to announce two attractive acquisitions that give us entry into the Permian Basin, an area of strong interest for the partnership. These acquisitions will expand our geographic presence to seven states, further increase our exposure to oil, and give us the opportunity to leverage the expertise of a strong operator as we build a local team.”

He adds the properties are excellent MLP assets that have significant recoverable oil in place and predictable development drilling outcomes with more than 160 potential drilling locations.

BreitBurn Energy plans to fund the deal with borrowings from its existing bank credit facility.

The deal is expected to close by mid-July.

Breitburn paid $104,800 per BOE per day of production and $23.16 per BOE of reserves vs. the year-to-date average for upstream MLPs of $129,000 per BOE per day and $16 per BOE, according to Robert W. Baird & Co. analyst Michael Hall.