Breitburn Energy Partners Commences Chapter 11 Cases to Facilitate Balance Sheet Restructuring
May 16 2016 - 12:09AM
Business Wire
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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Breitburn Energy Partners LPAntonio D’AmicoVice President,
Investor Relations & Government AffairsorJessica TangInvestor
Relations Manager(213) 225-0390