BreitBurn acquires Permian Basin oil and gas properties

Source:BreitBurn Energy Partners L.P.

BreitBurn acquires Permian Basin oil and gas properties BreitBurn Energy Partners L.P. (the "Partnership") (BBEP) today announced it has signed a definitive agreement to acquire additional oil and natural gas properties in the Permian Basin in Texas for approximately $282 million, subject to customary closing conditions and purchase price adjustments, from CrownRock, L.P. The acquisition will be funded with borrowings under the Partnership’s existing bank credit facility and is expected to close in 2013. The Partnership intends to immediately enter into at-the-money commodity hedges to provide price protection for a substantial portion of the proved production for five years.

Hal Washburn, BreitBurn's CEO said, “We are very pleased to announce this opportunistic, bolt-on acquisition that further increases our exposure to oil via the addition of high quality, familiar assets with significant recoverable oil in place. This is our third acquisition from CrownRock, further augmenting our Permian Basin oil production base and development opportunities. This acquisition provides us with new interests in additional oil and gas properties adjacent to our existing operations as well as incremental interests in oil and gas properties that we already own and operate. We believe the acquisition will be immediately accretive to distributable cash flow per unit at closing.”

Highlights of the acquisition include:
- Estimated average daily net production of approximately 2,900 Boe/day for October 2013 (60% oil)
- Estimated reserve life index of over 15 years based on estimated proved reserves of approximately 16.6 MMBoe
- Approximately 93 producing wells and over 300 potential drilling locations
- Low lifting costs of approximately $7.00 per barrel
- Oil price received is currently WTI less approximately $3.00 per barrel
- Approximately 84% operated with approximately 66% average working interest

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