BreitBurn has enough 'dry powder' to cover acquisition goals, says CEO

By Lisa Kerner

Charlotte, N.C., April 18 - BreitBurn Energy Partners LP has "well over $700 million in dry powder" to execute its acquisition strategy in 2012, chief executive office and cofounder Hal Washburn said during a presentation at the IPAA OGIS Conference in New York on Wednesday.

Washburn said acquiring and exploiting properties is a core part of his company's strategy. In 2011, BreitBurn targeted acquisitions totaling between $200 million and $300 million. It ended the year with acquired properties totaling $340 million.

For 2012, Washburn said he'd like to see acquisitions total between $400 million and $500 million or $300 million at the least.

"We have the financial capability to make those acquisitions," Washburn said.

BreitBurn's total debt is $643 million, and its total debt to enterprise value is 35%.

Earlier in the month, the partnership's borrowing base was increased to $850 million from $788 million.

There are $88 million of outstanding borrowings under the company's credit facility.

In the last 15 months, BreitBurn has raised $300 million of equity and over $500 million of long-term high-yield bonds.

The company has access to capital markets at attractive pricing, Washburn said.

According to Washburn, BreitBurn is "always looking" for bolt-on opportunities and the company is not limited geographically, although it is unlikely it will acquire offshore or outside of the United States.

Ideally, BreitBurn is looking for a blended portfolio of acquisitions where its technical and operational teams can increase the value of the properties.

BreitBurn, in addition to acquisitions, remains committed to hedging and to growing distributions.

Washburn believes that given its hedge book, history of growing distributions and coverage ratio, BreitBurn trades a little lower than it should.

BreitBurn is a Los Angeles-based limited partnership focused on the acquisition, exploitation and development of oil and gas properties.

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