Breitburn Energy Partners Announces Suspension of Distribution for Common Units and Declares Monthly Distributions for Preferred Units
Breitburn Energy Partners LP (NASDAQ:BBEP) announced today that it has
elected to suspend the distribution on its Common Units, effective
immediately.
Halbert S. Washburn, Breitburn’s Chief Executive Officer said: “In light
of the ongoing weakness in commodity prices, and crude oil prices in
particular, and after careful consideration, Breitburn has decided to
suspend cash distributions on its Common Units. Since December of last
year we have taken a series of proactive steps to address the ongoing
challenges in the commodity markets. These included: 1) reducing our
capital budget by over $360 million from BBEP and QR Energy’s combined
2014 levels, to only $200 million this year; 2) strengthening our
balance sheet in April by raising $1 billion in long-term debt and
convertible preferred stock, the proceeds of which were used to reduce
short term borrowings; 3) implementing a companywide workforce reduction
plan resulting in significant savings of general and administrative
expenses; and 4) reducing Common Unit distributions in both January and
April to conserve cash and improve financial and operating flexibility.
While the decision to suspend Common Unit distributions at this time is
a difficult one, we believe it is in the long-term best interest of the
company and will allow us to save approximately $111 million annually,
which we can redirect to reduce debt or invest in the business and
better position Breitburn for the future.”
Breitburn also announced today distributions for its 8.25% Series A
Cumulative Redeemable Perpetual Preferred Units (NASDAQ: BBEPP) and 8.0%
Series B Perpetual Convertible Preferred Units. A cash distribution of
$0.171875 per Series A Unit is payable on January 15, 2016, to record
holders of its Series A Units at the close of business on December 31,
2015. This monthly distribution is equal to an annual distribution of
$2.0625 per Series A Unit. Breitburn has elected to pay the distribution
on the Series B Units in kind by issuing additional Series B Units
instead of paying a cash distribution. A distribution of 0.006666 PIK
unit per Series B Unit is payable on December 15, 2015, to record
holders of Series B Units at the close of business on November 30, 2015.
About Breitburn Energy Partners LP
Breitburn Energy Partners LP is a publicly traded, independent oil and
gas master limited partnership focused on the acquisition, development,
and production of oil and gas properties throughout the United States.
Breitburn’s producing and non-producing crude oil and natural gas
reserves are located in the following seven producing areas: Ark-La-Tex,
Michigan/Indiana/Kentucky, the Permian Basin, Mid-Continent, the
Rockies, Florida, and California. See www.breitburn.com
for more information.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains forward-looking statements. All statements,
other than statements of historical facts, included in this press
release that address activities, events or developments that Breitburn
expects, believes or anticipates will or may occur in the future are
forward-looking statements. These statements are based on certain
assumptions made by Breitburn based on management’s experience and
perception of historical trends, current conditions, anticipated future
developments and other factors believed to be appropriate. Such
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, including those which are set
forth under the heading “Risk Factors” in 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.
Non-U.S. investors are not eligible holders of Breitburn common, Series
A Units, and Series B Units. This press release is intended to provide a
qualified notice under Treasury Regulation Section 1.1446-4(b). Brokers
and nominees should treat one hundred percent (100.0%) of Breitburn’s
distributions to non-U.S. investors as being attributable to income that
is effectively connected with a U.S. trade or business. Accordingly,
Breitburn’s distributions to non-U.S. investors are subject to federal
income tax withholding at the highest applicable effective tax rate.
BBEP-IR
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Copyright Business Wire 2015
Source: Business Wire
(November 30, 2015 - 8:25 PM EST)
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