Breitburn Energy Partners LP (NASDAQ: BBEP) and certain of its affiliates filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York.
Breitburn expects to continue its operations without interruption, and cash from its operations, cash on hand, and a $75 million debtor-in-possession financing facility (DIP Financing Facility) will provide Breitburn with adequate liquidity to fund its operations during the restructuring process. Breitburn's DIP Financing Facility lenders have offered to arrange an additional $75 million of DIP financing at Breitburn's request. The Chapter 11 Cases will facilitate the restructuring of Breitburn's balance sheet.
Discussions with secured and unsecured creditors continue.
Hal Washburn, CEO, said, "The prolonged decline in commodity prices that began in 2014 has placed significant financial stress on today's oil and gas industry. Our long-lived, low-decline portfolio of diverse assets continues performing in line with our expectations, but the current outlook for commodity prices makes our existing debt burden unsustainable. Taking this action now gives us flexibility in maximizing the value of the ongoing business."
Breitburn has filed a variety of "first-day" motions with the court seeking, among other things, authority to maintain its existing cash management system, approval of the DIP Financing Facility, authority to make payments to royalty interest holders and with respect to its lease operating expenses, drilling and production costs, and other related operating costs, and other customary relief.
Weil, Gotshal & Manges LLP is serving as Breitburn's legal advisor, Lazard Frères & Co. LLC is serving as investment banker, and Alvarez and Marsal North America, LLC is serving as financial advisor.