Breitburn Energy Partners Commences Chapter 11 Cases to Facilitate Balance Sheet Restructuring
Secures $75 Million in Debtor-in-Possession Financing
Discussions Will Continue with Secured and Unsecured Creditors
Regarding Terms of Expedited Balance Sheet Restructuring
Operations to Continue as Usual During Restructuring Process
Breitburn Energy Partners LP (Breitburn) (NASDAQ: BBEP) today announced
that it and certain of its affiliates filed voluntary petitions for
relief under Chapter 11 of the United States Bankruptcy Code in the
United States Bankruptcy Court for the Southern District of New York
(Chapter 11 Cases). Breitburn expects to continue its operations without
interruption, and cash from its operations, cash on hand, and a
$75 million debtor-in-possession financing facility (DIP Financing
Facility) will provide Breitburn with more than adequate
liquidity to fund its operations during the restructuring process.
Breitburn’s DIP Financing Facility lenders have offered to arrange an
additional $75 million of DIP financing at Breitburn’s request. The
Chapter 11 Cases will facilitate the restructuring of Breitburn’s
balance sheet.
During the last 30 days, Breitburn has been engaged in constructive
discussions with its second lien noteholders and the advisors to its
unsecured noteholders regarding the need for, sponsorship of, and terms
of a balance sheet restructuring. Simultaneously, Breitburn has been
engaged in constructive discussions with its revolving lenders regarding
their support for emergence financing, as well as the treatment of
Breitburn’s valuable hedging assets in conjunction with its emergence
from the Chapter 11 Cases. Breitburn plans to utilize the Chapter 11
Cases to continue and complete these discussions with key stakeholders
and evaluate other value-maximizing opportunities to facilitate an
expedited balance sheet restructuring that will leave Breitburn as a
stronger, deleveraged, and recapitalized enterprise.
Hal Washburn, Chief Executive Officer, said, “The prolonged decline
in commodity prices that began in 2014 has placed significant financial
stress on today’s oil and gas industry. Our long-lived, low-decline
portfolio of diverse assets continues performing in line with our
expectations, but the current outlook for commodity prices makes our
existing debt burden unsustainable. Taking this action now gives us
flexibility in maximizing the value of the ongoing business. By
continuing the proactive approach we started 15 months ago and
restructuring our balance sheet now, we expect to create a stronger and
more financially sound company for the benefit of all our stakeholders.
During the restructuring process, we will continue managing our business
and operating our assets as we do today. Cash from our operations, cash
on hand and cash available under the DIP Financing Facility will provide
us with more than sufficient funds to operate our business during
the restructuring process. We look forward to working with our service
providers, suppliers, customers, vendors, and partners to ensure that
Breitburn emerges from the restructuring process a stronger company.”
Breitburn has filed a variety of “first-day” motions with the court
seeking, among other things, authority to maintain its existing cash
management system, approval of the DIP Financing Facility, authority to
make payments to royalty interest holders and with respect to its lease
operating expenses, drilling and production costs, and other related
operating costs, and other customary relief. When granted, such motions
will assure Breitburn’s ability to maintain business-as-usual operations
throughout the restructuring process.
Additional information, including court filings, regarding Breitburn’s
restructuring is available at https://cases.primeclerk.com/breitburn
or by contacting Breitburn’s proposed notice and claims agent at
855-851-7887 (for toll-free domestic calls) and 917-258-6103 (for tolled
international calls) or by email at breitburninfo@primeclerk.com.
Weil, Gotshal & Manges LLP is serving as Breitburn’s legal advisor,
Lazard Frères & Co. LLC is serving as investment banker, and Alvarez and
Marsal North America, LLC is serving as financial advisor.
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 Ark-La-Tex; the Midwest; the Permian Basin; the
Mid-Continent; the Rockies; the Southeast; and California. See www.breitburn.com
for more information.
Cautionary Statement Regarding Forward-Looking
Information
This press release contains forward-looking statements that relate to
future results and events that are not facts and constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements are
based on Breitburn’s current expectations, estimates and assumptions
and, as such, involve certain risks and uncertainties. The ability of
Breitburn to predict results or the actual effects of its plans and
strategies is subject to inherent uncertainty. Actual results and events
in future periods may differ materially from those expressed or implied
by these forward-looking statements because of a number of risks,
uncertainties and other factors. All statements other than statements of
historical fact, including statements containing the words “intends,”
“believes,” “expects,” “will,” and similar expressions, are statements
that could be deemed to be forward-looking statements. In addition, the
forward-looking statements represent Breitburn’s views as of the date as
of which they were made. Breitburn anticipates that subsequent events
and developments may cause its views to change. However, although
Breitburn may elect to update these forward-looking statements at some
point in the future, it specifically disclaims any obligation to do so.
These forward-looking statements should not be relied upon as
representing Breitburn’s views as of any date subsequent to the date
hereof. Additional factors that may cause results to differ materially
from those described in the forward-looking statements are set forth in
Breitburn’s Annual Report on Form 10-K for the fiscal year ended
December 31, 2016, which was filed with the Securities and Exchange
Commission on February 26, 2016, under the headings “Risk Factors” and
“Cautionary Statement Regarding Forward-Looking Information,” as well as
subsequent reports on Form 10-Q. Additional risks include, but are not
limited to, those associated with Breitburn’s filing for relief under
chapter 11 of the Bankruptcy Code.
BBEP-IR
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