CrownRock LP

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
164MM
Description

Purchase of privately-held Permian Basin assets.

BreitBurn Energy Partners LP (Nasdaq: BBEP) plans to buy two different producing properties in the Permian Basin for a combined price of about $189 million.

BreitBurn will buy the assets, from privately-held CrownRock LP and Lynden USA Inc., a wholly-owned subsidiary of Lynden Energy Corp (Toronto Venture: LVL). The purchase is for 100% operated interest and 70% working interest in the fields and will add an average daily net production of about 1,850 barrels of oil equivalent per day, 65% of which is from oil.

Breitburn will fund the purchase from its existing bank credit facility. The deal is expected to close by year-end.
The estimated proven reserves from the acquired assets is about 13.6 million BOE. The estimated reserve life index is more than 18 years. The assets have about 48 producing wells and over 200 potential drilling locations.

The assets have a lifting cost of about $8 per bbl. Production is priced around WTI less $4.50 per bbl.

BrietBurn chief executive Hal Washburn said, "This is an excellent bolt-on acquisition that substantially increases our Permian Basin position and will make Texas one of our most active areas for production and development. This transaction brings the total value of our acquisitions to approximately $600 million for the year, which significantly exceeds our acquisition target for 2012."

Lynden Energy said it will sell its interest in 16 gross (7.0 net) Wolfberry Project wells and underlying leases covering approximately 1,440 gross acres (630 acres net to Lynden) for $25.0 million. The sale will have an effective date of Dec. 1.

Lynden has a 43.75% working interest in the wells to be sold and a right to earn a 43.75% working interest in the portion of the leases not already held by production. In addition, Lynden’s working interest partner in the assets has also entered into an agreement to sell its interest. Lynden’s net production, after royalties, from the wells to be sold is approximately 20% of its production on Dec. 1.

Lynden said the sale is in line with its strategy to sell portions of its proven acreage in order to manage its working capital position and to redeploy funds to its less developed and unproven acreage, where it believes it can achieve the best returns for shareholders. Lynden said its current plans call for 43 gross (18.14 net) Wolfberry Project wells to spud from July 1, 2012 to June 30, 2013 (fiscal 2013).

Meanwhile, Lynden announced it continues to believe that it will meet its forecasted Dec. 31, 2012 net production exit rate, after royalties, of 900 – 1,000 BOE per day. The Wolfberry Project covers approximately 18,931 gross (16,979 net) acres, equivalent to approximately 6,730 acres net to Lynden’s working interest.

BreitBurn Energy Partners LP is a publicly-traded independent oil and gas limited partnership based in Los Angeles. It has producing and non-producing crude oil and natural gas reserves in Michigan, Wyoming, California, Florida, Texas Indiana and Kentucky.