UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED)
July 2, 2012 (July 2, 2012)
BREITBURN ENERGY PARTNERS L.P.
(Exact name of Registrant as specified in its charter)
| Delaware | 001-33055 | 74-3169953 |
| (State or other jurisdiction of | (Commission | (I.R.S. Employer |
| incorporation or organization) | File Number) | Identification No.) |
515 South Flower Street, Suite 4800
Los Angeles, CA 90071
(Address of principal executive office)
(213) 225-5900
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01. Entry into a Material Definitive Agreement.
Closing of Previously Reported Acquisitions
BreitBurn Energy Partners L.P. (the “Partnership”) is providing the following updated disclosure with respect to its Current Report on Form 8-K filed on May 11, 2012.
On July 2, 2012, the Partnership completed two separate acquisitions by BreitBurn Operating L.P. (“BreitBurn Operating”), a wholly owned subsidiary of the Partnership, of certain oil and natural gas assets (the “Element Assets”) from Element Petroleum, LP (“Element”), as seller, (the “Element Purchase Agreement”) and certain oil and natural gas assets (the “CrownRock Assets”) from CrownRock, L.P. (“CrownRock”), as seller, (the “CrownRock Purchase Agreement”).
The Element and CrownRock Assets acquired by BreitBurn Operating consist of oil and natural gas properties located in the Permian Basin of Texas. Pursuant to the terms and conditions of the Element Purchase Agreement, BreitBurn Operating completed the acquisition of the Element Assets in exchange for approximately $150 million in cash, subject to customary post-closing adjustments (the “Element Acquisition”). Pursuant to the terms and conditions of the CrownRock Purchase Agreement, BreitBurn Operating completed the acquisition of the CrownRock Assets in exchange for approximately $70 million in cash, subject to customary post-closing adjustments (the “CrownRock Acquisition,” and together with the Element Acquisition, the “Acquisitions”).
After the completion of the Acquisitions, the amount of debt outstanding under the Partnership’s bank credit facility is $423 million with a current borrowing base of $850 million.
The foregoing description does not purport to be complete and is qualified in its entirety by reference to the Element Purchase Agreement and CrownRock Purchase Agreement, previously filed on May 11, 2012 as Exhibits 10.1 and 10.2, respectively, to our Current Report on Form 8-K.
Item 7.01 Regulation FD Disclosure.
On July 2, 2012, the Partnership issued a press release announcing the completion of the Element and CrownRock Acquisitions. A copy of the press release is furnished and attached as Exhibit 99.1 hereto and is incorporated herein solely for the purposes of this Item 7.01 disclosure.
The information set forth in this Current Report on Form 8-K provided under Item 7.01 and in Exhibit 99.1 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, unless the Partnership specifically states that the information is to be considered “filed” under the Exchange Act or incorporates it by reference into a filing under the Exchange Act or the Securities Act of 1933, as amended.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
99.1 BreitBurn Energy Partners L.P. press release dated July 2, 2012 announcing completion of the Element and CrownRock Acquisitions.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| BREITBURN ENERGY PARTNERS L.P. | ||
| By: | BREITBURN GP, LLC, | |
| its general partner | ||
| Dated: July 2, 2012 | By: |
/s/Gregory C. Brown |
| Gregory C. Brown | ||
| General Counsel and Executive Vice President | ||
EXHIBIT INDEX
|
Exhibit No. |
Document | |
| 99.1 | BreitBurn Energy Partners L.P. press release dated July 2, 2012 announcing completion of the Element and CrownRock Acquisitions. |
Exhibit 99.1
BreitBurn Energy Partners L.P. Announces Closing of Two Permian Basin Acquisitions Totaling Approximately $220 Million
LOS ANGELES, July 2, 2012 — 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.
| 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.
| CrownRock Acquisition | ||||||||
| 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.
Investor Relations Contacts:
James G. Jackson
Executive Vice President and Chief Financial Officer
(213) 225-5900
or
Jessica Tang
Investor Relations
(213) 225-0210
BBEP-IR
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