Breitburn Energy Partners LP (NASDAQ:BBEP) today released its
interim estimated total proved reserves (Interim Reserves) and
present value of estimated future net cash flows relating to such
estimated reserves discounted using an annual rate of 10% (PV10),
as of November 1, 2015, based on NYMEX future strip prices as of
November 2, 2015.
The table below summarizes Breitburn’s estimated Interim
Reserves and PV10 as of November 1, 2015, based on NYMEX future
strip prices as of November 2, 2015, and the estimated
market-to-market value of its commodity hedges as of November 1,
2015.
Interim Reserves(Boe)(1)
PV10
($MM)(1)
Estimated Value
($MM)(2)
Proved Developed 194 $1,460 Proved Undeveloped
58 406 Total Interim Reserves 252
$1,866 Commodity Hedge Portfolio -- --
$ 632 Total Including Commodity Hedges 252 -- $2,498
(1) The Interim Reserves and PV10 have not been prepared by an
independent engineering firm and are based on internal estimates.
The Interim Reserves and PV10 have not been calculated pursuant to
SEC rules and regulations, which require that they be estimated
using the average price during the prior 12-month period,
determined as an unweighted average of the first-day-of-the-month
price for each month (without regard to Breitburn’s commodity
derivative positions and without assuming any change in Breitburn’s
development plans or costs, which has not been the case
historically in periods of prolonged depressed commodity
prices).
The Interim Reserves and PV10 are based on NYMEX future strip
prices as of November 2, 2015 (approximately $46.14 - $58.79 per
Bbl for WTI, approximately $48.80 - $64.02 per Bbl for Brent, and
approximately $2.26 - $3.15 per MMBtu for Henry Hub through 2020
and then held flat thereafter). The use of these future prices is
for illustration purposes only, does not necessarily indicate
Breitburn’s overall view on future commodity prices, and does not
represent a forecast or estimate of Breitburn’s estimated total
proved reserves as of December 31, 2015, which will be reported as
of that date in Breitburn’s Form 10-K for 2015. See Part I—Item 1A
“—Risk Factors” in Breitburn’s Form 10-K for 2014 for a description
of some of the risks and uncertainties associated with our business
and reserves.
PV10 is a non-GAAP measure. Breitburn’s calculation of PV10
differs from the standardized measure of discounted future net cash
flows determined in accordance with SEC rules and regulations in
that it is presented including the impact of updated estimated
reserves and future strip prices rather than the average price
during the prior 12-month period, determined as an unweighted
average of the first-day-of-the-month price for each month.
Information used to calculate PV10 is not derived directly from
data determined in accordance with the provisions of applicable
accounting standards. Breitburn’s calculation of PV10 should not be
considered as an alternative to the standardized measure of
discounted future net cash flows required under SEC rules and
regulations.
The following is a reconciliation of the standardized measure of
discounted future net cash flows at December 31, 2014, to
Breitburn’s calculation of PV10 in this press release using interim
estimated proved reserves and future strip prices (through 2020 and
then held flat thereafter) as of November 2, 2015 (in
millions):
Standardized measure of discounted future net cash flows at
December 31, 2014** $4,504 Less difference due to updated estimated
reserves at oil and natural gas strip prices, due principally to
commodity prices, changes in estimated future production costs and
future development costs, production, additions and sales of
minerals in place (2,638) PV-10 (excluding commodity hedges) as of
November 1, 2015 $1,866
** Represents the present value of estimated future net revenue
to be generated from the production of proved reserves, determined
in accordance with SEC rules and regulations (using prices and
costs in effect as of December 31, 2014), less future development,
production and income tax expenses, and discounted at 10% per annum
to reflect the timing of future net revenue, without giving effect
to derivative transactions.
(2) Estimated value for commodity hedges reflects mark-to-market
value as of November 1, 2015, based on November 2, 2015 NYMEX
future strip prices (approximately $46.14 - $58.79 per Bbl for WTI,
approximately $48.80 - $64.02 per Bbl for Brent, and approximately
$2.26 - $3.15 per MMBtu for Henry Hub through 2020).
Breitburn is disclosing the information in this press release
pursuant to its obligations under separate confidentiality
agreements with certain holders of its unsecured notes
(Noteholders). While Breitburn has been in discussions with the
Noteholders concerning a potential privately negotiated debt
restructuring transaction, there can be no assurance that such a
transaction will be completed.
The information disclosed herein does not constitute an offer to
buy, or a solicitation of an offer to buy notes or any other
Breitburn security.
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.
Reserve engineering is a complex and subjective process of
estimating underground accumulations of oil and natural gas that
cannot be measured in an exact way, and the accuracy of any reserve
estimate is a function of the quality of available data and of
engineering and geological interpretation and judgment. As a
result, estimates prepared by one engineer may vary from those
prepared by another. Estimates of proved reserves for our oil and
gas properties as of December 31, 2015 will be prepared by
independent petroleum engineering firms in accordance with SEC
rules and regulations governing the preparation of estimated proved
reserves using the unweighted average of the first-day-of-the-month
price for each month in the 12-month period ending December 31,
2015, and other information available at that time. Upon completion
of their review, the estimate of the proved reserves for our oil
and gas properties as of December 31, 2015 may be materially
different from our management’s estimates of the proved reserves
for our oil and gas properties as of November 1, 2015 shown in the
table above.
Potential Tax
Liabilities
Potential debt exchanges, repurchases or cancellations and/or
asset sales could result in a tax liability for Breitburn’s
unitholders. The effect to each unitholder would depend on the
unitholder’s individual tax position with respect to any units that
it is holding. If available, prior year passive losses from a
unitholder’s interest in Breitburn may serve to reduce or eliminate
such unitholder’s current and future year taxable income and
related income tax liability.
BBEP-IR
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version on businesswire.com: http://www.businesswire.com/news/home/20151216006282/en/
Breitburn Energy Partners LPAntonio D'AmicoVice President,
Investor Relations & Government AffairsorJessica TangInvestor
Relations Manager(213) 225-0390