My thoughts on Hal’s Presentation at the IPAA OGIS Conference:
1. BBEP is not only committed to continued distribution increases but “wants to be at the top of peer group in increased distributions.”
2. Plans to drill 10 – 20 wells (oil) in California this year.
3. 56% reserves and 60% production growth/unit since IPO.
4. $300 million, possibly $400 - $500 million for acquisitions this year.
5. Acquisition Goal: “Properties with large amounts of original oil in place and low terminal decline rates.”
6. 1.18 cover ratio on distributions.
7. Stock price disappointing and wants it much higher by this time next year.
Expect to see:
a. continued distribution increases for at least the next several years.
b. a major acquisition later this year in a predominately oil field.
c. BBEP doing everything possible to raise their stock price.
To elaborate on the distribution issue: at the breakout session of the Wells Fargo MLP conference last December in NYC, in response to my question about future distribution increases, BBEP senior management said that it is their intention to raise the distribution 8-10% per year for the foreseeable future---- which, in practical terms, translates into at least the next two to three years.
yes liked distribution discussion but also gave stronger update on MI and New Albany and again re emphasized over 1 billion bbls oil in place in california with only 20 mm bbls oil recorded as proved and strong borrowing base
MI--120,000 to 130,000 net acres held by production in Utica-Collingswood and A-1 carbonate and other deeper plays and bbep will focus their 2012 MI capital into these deeper liquids plays-note their horizontal Florida drilling is in carbonate so developed a lot of experience into carbonate where devon has very good mi results
Ind/Kent-New Albany-acreage held by production. currently have over 100,000 net acres. will see it play out further before applying capital