BreitBurn Adds Acreage in Permian Basin
BreitBurn Energy Partners L.P. has signed two separate agreements to acquire oil and natural gas properties located in the Permian Basin in Texas for a combined price of approximately $220 million, subject to customary closing conditions and purchase price adjustments. The acquisitions will be funded with borrowings under the Partnership’s existing bank credit facility and are expected to close within 60 days.
Hal Washburn, BreitBurn's CEO, said, "We are very pleased to announce two attractive acquisitions that give us entry into the Permian Basin, an area of strong interest for the Partnership. These acquisitions will expand our geographic presence to seven states, further increase our exposure to oil, and give us the opportunity to leverage the expertise of a strong operator as we build a local team. The properties are excellent MLP assets that have significant recoverable oil in place and predictable development drilling outcomes with over 160 potential drilling locations. We believe the acquisitions will be immediately accretive to distributable cash flow per unit upon closing."
Highlights of the combined acquisitions include:
- Current net production of approximately 2,100 Boe/day (56% oil)
- Estimated proved reserves of approximately 9.5 MMBoe
- Estimated reserve life index of over 13 years based on estimated proved reserves
- Approximately 40 existing wells and over 160 potential drilling locations
- Net acreage position of approximately 4,600 acres
- Low lifting costs of approximately $6.00 per Boe
- Oil price received is currently WTI less approximately $3.00 per barrel of oil
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