?Hal Washburn and Randy Breitenbach’s MLP BreitBurn Energy Partners LP, Los Angeles, (Nasdaq: BBEP) has bought out the limited partnership and indirect general partnership interests of BreitBurn previously owned by Calgary-based Provident Energy Trust (Toronto: PVE.UN; NYSE: PVX) for US$345 million.
Provident held a 22% interest in BreitBurn Energy Partners and a 96% interest in the MLP general partner, BreitBurn GP LLC.
Additionally, BreitBurn acquired the remaining 4.45% of BreitBurn GP owned by BreitBurn Energy Corp., which is wholly owned by BreitBurn’s co-chief executives Washburn and Breitenbach, for limited partnership units valued at approximately US$455,000. BreitBurn GP holds no interest in the MLP following the transactions.
The deal was funded with a credit facility from Wells Fargo Bank NA that was amended from $750 million to $900 million.
BreitBurn co-CEO Washburn says, “We are pleased that the partnership was able to...remove the ongoing uncertainties surrounding the sale of Provident’s interests in BreitBurn. Given the opportunity, the partnership was able to take advantage of its financial flexibility, the recent weakness in the market price of partnership units, and the fact that commodity prices were at all-time highs.”
Tom Buchanan, Provident president and chief executive, says, “This sale is an important first step in Provident’s strategic review process announced Feb. 5. Provident’s investment in BreitBurn has provided an outstanding return to unit-holders and the completion of this sale is key to enhancing Provident’s flexibility to execute our business plan, capitalize on strategic growth opportunities in our Canadian oil and gas and midstream business units.”
Provident is continuing to pursue the sale of its remaining U.S. assets consisting of a 96% interest in BreitBurn Energy Co. LP, a privately held partnership. Its assets consist primarily of producing and nonproducing properties in Los Angeles, Orange and Santa Barbara counties in California.
Provident’s decision to pursue a potential sale of its BreitBurn interests was driven primarily by the Canadian government’s resolution in October 2006 to impose growth restrictions on Canadian energy trusts and implement a tax on distributions beginning in 2011.
Morgan Stanley was advisor to Provident for this deal.

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