Breitburn Energy Partners LP

Breitburn Energy Partners LP suspended its duty to file periodic reports with the SEC.

listing compliance notice

Breitburn Energy Partners LP suspended its duty to file periodic reports with the SEC.

listing compliance notice

Breitburn Energy Partners LP terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

The court confirmed Breitburn's plan on 26 March 2018. Common and preferred units were cancelled for no consideration, though unitholders faced a risk of taxable income from debt cancellation. Second lien noteholders got 92.5% of LegacyCo, RBL lenders got cash plus a $400 million exit facility, and eligible unsecured noteholders could buy the Permian assets through a $465 million rights offering.

bankruptcy or receivership

Creditors agreed in principle on a revised plan, amending the October restructuring agreement and the backstop that underwrites the rights offering funding the new Permian company. The bargaining was between creditor classes; unitholders were not party to it.

material agreement

Breitburn signed a restructuring deal with holders of two thirds of both its second lien and its $1.155 billion of unsecured notes: split the company, with everything except the Permian going into a new LegacyCo owned mostly by second lien holders, and the Permian assets into a separate corporation funded by unsecured noteholders. The Permian acreage assembled from CrownRock, Element and Antares between 2012 and 2014 was the only part considered worth carving out.

material agreement

Seven months into Chapter 11 the bankruptcy loan was doubled from $75 million to $150 million, its letter-of-credit sublimit raised from $50 million to $100 million, priced up with new fees to the agent and lenders, and extended to 30 June 2017. A second amendment the same day allowed ordinary-course letters of credit to be cash-collateralised.

debt financing

Breitburn Energy Partners LP's exchange filed to remove a class of its securities from listing.

listing compliance notice

The $75 million debtor-in-possession facility was signed, with Wells Fargo as agent and the pre-bankruptcy revolver lenders as the lenders, maturing January 2017. The banks that financed the acquisition spree stepped straight into the senior, court-protected position ahead of everyone else.

debt financing

Nasdaq told Breitburn on 16 May 2016, a day after the Chapter 11 filing, that it would delist the units, citing the filing and concerns about unitholders' residual equity. Breitburn said it would not appeal and expected the units to be quoted on the OTC Pink market.

listing compliance notice

Breitburn filed for Chapter 11 in New York on 15 May 2016 with a $75 million debtor-in-possession loan arranged by the same revolver banks it already owed. The cause was not a bad well but the arithmetic of the model itself: nine years of buying producing assets with bank debt and refinancing it with units and bonds left roughly $3 billion of borrowings against reserves the 2014-16 price collapse had revalued far below them.

bankruptcy or receivership

Lenders agreed to delay the spring borrowing base redetermination by a month and cut committed lending from $1.8 billion to $1.4 billion. The delay bought a few weeks; the cut confirmed the banks were shrinking their exposure ahead of a reserve revaluation nobody expected Breitburn to survive.

material agreement

Nasdaq warned that Breitburn's units had traded below $1 for 30 straight days, giving it until July to recover. Units that were sold at $18-21 through the acquisition years were now worth less than a dollar.

listing compliance notice

The QR Energy merger closed on 19 November 2014 after 97% approval, roughly doubling Breitburn's size and adding QR's debt to its own. It closed with oil already 25% below its June peak, and the enlarged, heavily indebted partnership had eighteen months left.

asset acquisition disposition

Breitburn registered up to 72,001,686 new common units to pay for its merger with QR Energy, LP, agreed on 23 July 2014. QRE unitholders get 0.9856 Breitburn units per QRE unit (valued at $22.48 per QRE unit on 23 July 2014, a 19% premium), and QRE's Class C preferred units get $350 million in cash in total. QRE holders would own about 37% of Breitburn's common units afterwards, so existing Breitburn unitholders would be diluted to roughly 63%. The deal needs a QRE unitholder vote.

business combination

Agreed to buy QR Energy LP in an all-unit merger valuing it at about $3.0 billion including debt, at 0.9856 Breitburn units per QR unit. Announced in July 2014, weeks before the oil price began its two-year collapse - Breitburn was doubling its size at the top of the cycle and paying in its own units.

business combination

Nasdaq certified Breitburn Energy Partners LP's securities for listing, clearing them to begin trading.

listing compliance notice

Sold 8 million 8.25% Series A preferred units at $25 for about $193 million. Preferred units cost more than the common distribution but did not dilute unitholders - the first sign that ordinary equity was becoming harder to sell.

material agreement

Banks lifted the borrowing base to $1.6 billion, kept commitments at $1.4 billion and pushed the revolver out a year to May 2017. This was the high-water mark of lender confidence; every redetermination after the oil price broke went the other way.

debt financing

Closed the third CrownRock deal plus $20 million of extra interests. The disclosure that matters is the last line: $727 million drawn against $1.4 billion of lender commitments, after roughly $1.15 billion of acquisitions in 2013 alone.

asset acquisition disposition

A third CrownRock purchase, $282 million for more Permian acreage, with Breitburn saying it would hedge five years of the acquired production immediately. The hedges were the whole thesis: buy long-life production on debt and lock in the price.

material agreement

Issued a further $400 million of the 7.875% 2022 notes, taking that single issue to $850 million. Combined with the 2020 notes, unsecured bond debt was now well over $1.1 billion - the same notes whose holders would later be wiped down to a rights offering in bankruptcy.

debt financing

Closed the Whiting purchase at about $846 million, with Whiting continuing to run the fields until the end of October. Breitburn had roughly doubled its debt to buy a mature enhanced-oil-recovery project whose economics depend on a high oil price.

asset acquisition disposition

Agreed to buy Whiting's Postle and North East Hardesty oil fields in Oklahoma's Texas County for about $859.8 million cash, with the related gas plant, CO2 and oil pipelines and CO2 supply contracts. It also took a 60% interest in Transpetco and used a $85.98 million deposit.

material agreement

Went back to CrownRock five months after the first Permian deal, agreeing to pay it $165 million and Lynden USA $25 million for more Wolfberry acreage - another $190 million on the bank line.

material agreement

Added $200 million to the 7.875% 2022 notes, taking that issue to $450 million, again to repay bank borrowings. Bond debt was growing faster than the asset base it funded.

debt financing

Closed both Permian deals - $150 million to Element and $70 million to CrownRock - with CrownRock's affiliate operating most of the roughly 160 future drilling locations. Breitburn was now a Permian owner but not, on the growth acreage, the operator.

material agreement

Two agreements on the same day - $146 million to Element Petroleum and the balance to CrownRock, about $220 million together - took Breitburn into the Permian Basin for the first time, funded on the bank line. Its seventh state and a deliberate tilt towards oil.

material agreement

Raised $250 million of 7.875% notes due 2022 to repay the revolver. Same manoeuvre as the 2020 notes: bank borrowings used for acquisitions were termed out into long-dated bonds, leaving the revolver free to be drawn again.

debt financing

Closed the Cabot purchase at $283 million, adding the Evanston and Green River Basin gas fields in Wyoming.

asset acquisition disposition

Agreed to buy Cabot Oil & Gas's south-west Wyoming properties for $285 million, 95% natural gas, funded entirely on the bank revolver. The largest purchase to date and a deliberate move back towards gas.

material agreement

Breitburn's first bond issue: $305 million of 8.625% notes due 2020, sold privately to institutions, with the bank borrowing base reaffirmed alongside. The partnership now had long-dated debt as well as a revolver - the beginning of the capital structure that eventually broke it.

debt financing

Breitburn agreed with Quicksilver and Provident to settle all litigation, paying Quicksilver $13 million that it expected insurance to cover. It intended to reinstate quarterly distributions at $0.375 a unit ($1.50 a year) from Q1 2010, if coverage was at least 1.2, with Quicksilver gaining two board seats.

material agreement

The other half of the Provident separation: Breitburn's own senior managers, with Metalmark Capital and Greenhill Capital, bought the California predecessor company BreitBurn Energy Company from Provident. That company became a permanent related party - the same two co-CEOs sat on both sides - governed by a services agreement and a non-compete that split future opportunities between them.

material agreement

Breitburn bought its own sponsor out: it paid Provident Energy Trust $335 million for 14.4 million of its own units and a further $10 million for 95.55% of the management company that controls its general partner. From here the partnership ran itself rather than being run by a Canadian parent.

asset acquisition disposition