Breitburn Energy Partners LP (BBEP) said it would acquire QR Energy LP (QRE) in an equity-and-cash deal valued at nearly $2 billion.

The combined company will become the largest, oil-weighted upstream oil and gas master limited partnership, with current average daily production of about 57,300 barrels of oil equivalent a day, the companies said.

The deal would boost Breitburn's ability to generate greater cash flow and is expected to add to distributable cash flow per unit, the company said.

Breitburn's senior management team will lead the combined company and plans to employ all of QR Energy's engineering, operations, and support staff, excluding those that are being retained by Quantum Resources Management LLC.

Breitburn will also add a new member to its board, who will be selected by both companies.

Holders of QR Energy's common and Class B units will receive 0.9856 of a Breitburn unit for each unit of QRE held, for a consideration of $22.48 a unit, marking a 19% premium to QRE's latest closing price.

Holders of QR Energy Class C convertible preferred units will also receive $350 million in cash at closing, bringing the deal's stock and cash value to about $1.97 billion.

Including QR Energy's existing net debt and outstanding Class C convertible preferred units, the deal is valued at about $3 billion, the companies said.

Breitburn has agreed to recommend to its board a distribution increase to $2.08 per unit on an annualized basis, upon the deal's closing.

The deal, which is expected to close later this year or in early 2015, has already been approved by the boards of both companies.

Write to Erin McCarthy at erin.mccarthy@wsj.com

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