BreitBurn Buys In California

Purchase of WI in Belridge Field, producing 825 BOE per day, 85% of which is oil.

BeitBurn Energy Partners LP (Nasdaq: BBEP) plans to buy oil-producing properties in the Belridge Field In Kern County, California from American Energy Operations Inc. for about $94.6 million in cash and stock.

The purchase price includes $40 million in cash and 3.013 million common units in the partnership and is subject to the usual adjustments at closing.

BreitBurn chief executive Hal Washburn said, "The Belridge Field is one of the largest fields in California, with significant oil in place, and these long-lived assets will provide us with attractive growth opportunities to further increase our oil drilling inventory. These assets will add to our high quality California oil production being sold based on Brent crude which is currently priced at approximately $110 per barrel.

The acquisition is expected to give BreitBurn an additional estimated average daily net production of approximately 825 barrels of oil equivalent (BOE) per day as of October 2012, 85% of which is oil. Oil production is about 29 API gravity and the price fluctuates around Brent minus 1%.

In addition, the field contains estimated proved reserves of approximately 3.8 million BOE as of Nov. 1, in addition to additional potential resources. The estimated reserve life for the field is about 12 years based on estimated proved reserves and current production rates.

BreitBurn will finance the purchase with borrowings under our bank credit facility. The Common Units to be issued as partial consideration for the acquisition will be issued in a private placement and will not be registered under the Securities Act of 1933.

This purchase is BreitBurn’s fourth acquisition in 2012, bringing the total value of the acquisitions year to date to over $400 million. Prior to the most recent purchase, BreitBurn purchased properties in the Permian Basin in May from Element Petroleum LP for $150 million. In addition, BreitBurn purchased Permian properties from CrownRock LP for $70 million. Both Element and CrownRock are privately-held and based in Midland, Texas.

In April, BreitBurn purchased 90% working interest in 3,225 net acres in Ferguson Ranch, Willow Draw, Hunt and Sheep Point fields in Park County, gaining 600 BOE/d, 5.9 MMBOE proved, from NiMin Energy Corp. for about $98 million.

BreitBurn is a publicly-traded independent oil and gas limited partnership based in Los Angeles, Calif. The partnership's producing and non-producing crude oil and natural gas reserves are located in Michigan, Wyoming, California, Florida, Texas Indiana and Kentucky.