Breitburn Energy Partners Announces Decision to Suspend Declarations of Preferred Distributions & Defer Making Interest Payme...
April 14 2016 - 9:00AM
Business Wire
Breitburn Energy Partners LP (“Breitburn”) (NASDAQ: BBEP) today
announced that it has elected to suspend the declaration of any
further distributions on its 8.25% Series A Cumulative Redeemable
Perpetual Preferred Units (NASDAQ: BBEPP) and 8% Series B Perpetual
Convertible Preferred Units and to defer an interest payment of
approximately $33.5 million due today on its 7.875% senior notes
due April 2022 (the “2022 Notes”) and an interest payment of
approximately $13.2 million on its 8.625% senior notes due October
2020 (the “2020 Notes” and, together with the 2022 Notes, the
“Notes”). Under the terms of the indentures governing the 2020
Notes and 2022 Notes, the company has a 30-day grace period after
the interest payment date before an event of default occurs.
Breitburn can elect to make the interest payments due under the
Notes at any time during the grace period. However, if Breitburn
decides not to make such interest payments by the end of the grace
period, such failure constitutes, with respect to each series of
Notes, an “Event of Default” and also results in a cross-default
under Breitburn’s revolving credit facility and its 9.25% Senior
Secured Second Lien Notes due May 2020. Failure to make an interest
payment for either Note by the end of the grace period also results
in the Trustee under the related indenture or the holders of at
least 25% in aggregate principal amount of the then outstanding
Notes having the right to accelerate the repayment of the principal
amounts due under each series of Notes.
Breitburn has elected to utilize the grace period for the Notes
as part of its process to explore strategic alternatives to
strengthen its balance sheet and maximize the value of Breitburn.
Additionally, it has initiated discussions with its secured
debtholders related to alternatives to improve Breitburn’s
long-term capital structure. Breitburn has retained Lazard Frères
& Co. LLC as its financial advisor and Weil, Gotshal &
Manges LLP as its legal advisor to assist the Board of Directors
and the management team with the strategic review process. In
addition, Jefferies LLC will provide Breitburn with corporate and
financial advisory services.
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: the Midwest, Ark-La-Tex, 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 relating
to Breitburn’s operations that are based on management’s current
expectations, estimates and projections about its operations. Words
and phrases such as “believes,” “expect,” “future,” “impact,”
“guidance,” “will be,” “forecast” and variations of such words and
similar expressions are intended to identify such forward-looking
statements. These 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. These include risks relating to Breitburn’s
financial performance and results, availability of sufficient cash
flow and other sources of liquidity to execute our business plan,
prices and demand for natural gas and oil, increases in operating
costs, uncertainties inherent in estimating our reserves and
production, our ability to replace reserves and efficiently develop
our current reserves, political and regulatory developments
relating to taxes, derivatives and our oil and gas operations,
risks relating to our acquisitions and the factors set forth under
the heading “Risk Factors” incorporated by reference from 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. Therefore, actual outcomes and
results may differ materially from what is expressed or forecasted
in such forward-looking statements. The reader should not place
undue reliance on these forward-looking statements, which speak
only as of the date of this press release. Unless legally required,
Breitburn undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information,
future events or otherwise. Unpredictable or unknown factors not
discussed herein also could have material adverse effects on
forward-looking statements.
BBEP-IR
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version on businesswire.com: http://www.businesswire.com/news/home/20160414005464/en/
Breitburn Energy Partners LPAntonio D'AmicoVice President,
Investor Relations & Government AffairsorJessica TangInvestor
Relations Manager213-225-0390