Los Angeles, CA-based
Breitburn Energy Partners L.P.
) has priced an underwritten public offering of 7,000,000 8.25%
Series A Preferred Units at $25.00 a piece, with a 30-day
over-allotment option for an additional 1,000,000 units. The
offering, which was announced on May 14, is likely to close on May
The oil and natural gas explorer plans to use the net proceeds from
this offering - expected at approximately $193.3 million assuming
full exercise by the underwriters - to repay the debts under the
firm's credit facility.
BreitBurn Energy Partners, which recently reported upbeat first
quarter results on strong production, is an independent exploration
and production partnership engaged in the acquisition, finding, and
development of oil and gas properties. The entity's operations are
spread over nine states with primary focus on the Oklahoma and
Texas operating areas.
With a high-margin high-growth reserve base, balanced oil/gas
portfolio and accretive acquisitions, Breitburn Energy Partners'
asset portfolio is primed for high production growth and
peer-leading returns. Moreover, a track record of consistent
distribution hike, together with a business model focused on
operational efficiencies and attractive acquisitions/growth
projects, makes the partnership a good choice for investors looking
for a steady, predictable income stream.
However, as is the case with other independent exploration and
production firms, Breitburn Energy Partners' results are directly
exposed to oil and gas prices, which are inherently volatile and
subject to complex market forces. Realized prices could differ
significantly from our estimates, thereby affecting the
partnership's revenues, earnings and cash flow.
As a result, BreitBurn Energy Partners currently retains a Zacks
Rank #3 (Hold), implying that it is expected perform in line with
the broader U.S. equity market over the next one to three months.
However, some better-ranked domestic upstream energy stocks include
Matador Resources Co.
Callon Petroleum Co.
EPL Oil & Gas Inc.
). All the firms hold a Zacks Rank #1 (Strong Buy).
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BREITBURN EGY (BBEP): Free Stock Analysis
CALLON PETE-DEL (CPE): Free Stock Analysis
EPL OIL&GAS INC (EPL): Free Stock Analysis
MATADOR RESOURC (MTDR): Free Stock Analysis
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