This
article was originally published by TheStreet
NEW
YORK (TheStreet) -- BreitBurn
Energy Partners L.P. (BBEP_), a master
limited partnership that develops oil and natural gas fields in the U.S.,
should be appealing to investors seeking income because it has a dividend
yield of 10% and will start giving monthly cash distributions in January.
Founded 25 years ago,
BreitBurn, with a market cap of almost $2 billion, has grown from just two
wells in California to more than 5,000 wells in nine states, with significant
exposure to the Permian Basin in Texas, one of the leading oil-producing
regions of the world.
The firm has a history of successful acquisitions. In 2012, it spent more
than $600 million on seven deals. Of these, nearly $420 million were spent on
acquiring oil-rich properties at the Permian Basin from several different
buyers.
In July, BreitBurn acquired oil
and gas properties, as well as their related midstream assets, in the Oklahoma
Panhandle and New Mexico for $864 million.
Last week, BreitBurn agreed to acquire additional properties at
the Permian Basin from CrownRock for $282 million. BreitBurn will tap into its
credit facility to fund this acquisition. This is a fairly low risk acquisition
as the properties purchased are next to BreitBurn's existing acreage.
About two-thirds of the
BreitBurn's assets are oil and the rest is natural gas. The latest acquisition
represents average daily production of 2,900 barrels of oil equivalents. With
proven reserves of 16.6 million barrels, the properties have reserve life of
more than 15 years. BreitBurn's unit holders will immediately start seeing the
benefits of this acquisition in their distributable cash flows.
In a conference held before the announcement of the
Permian acquisition, BreitBurn Chief Financial Officer James Jackson pointed
out that … read full
article at TheStreet
