BreitBurn Energy Partners LP (BBEP), a master limited partnership, has entered into a deal with a wholly owned affiliate of Whiting Petroleum Corporation (WLL). Whiting Petroleum is an independent oil and gas firm.
Per the contract, BreitBurn Energy will pay $860 million to purchase the stakes of Whiting Petroleum in Postle and North East Hardesty oil fields, including related midstream properties. The fields are situated in Oklahoma Panhandle.
BreitBurn Energy has already paid $86 million to Whiting Petroleum. This payment will be adjusted toward the acquisition price during the closing of the transaction. It is expected that the purchase will be closed by Jul 31, 2013, subject to customary closing conditions and adjustment related to purchase price.
BreitBurn Energy added that it will also buy extra stakes from other sellers in some of the acquired properties, for a further consideration of roughly $30.2 million.
BreitBurn Energy believes that this agreement will significantly hike the distributable cash flow for the unit holders and create value for them in the long run. The partnership also revealed that currently, 98% of the total production from the acquired assets is liquid. Should the property purchase go through, BreitBurn Energy expects the net liquid output during the fourth quarter of 2013 to increase by over 100% from the year-ago period.
Los Angeles, Calif.-based BreitBurn Energy is involved in the acquisition, development, and production of domestic oil and gas assets.
The partnership currently retains a Zacks Rank #3 (Hold), implying that it is expected to perform in line with the broader U.S. equity market over the next 1 to 3 months.
Meanwhile, one can look at Oasis Petroleum Inc (OAS) and Sanchez Energy Corporation (SN) as good buying options. The exploration and production firms – sporting a Zacks Rank #1 (Strong Buy) – have solid secular growth stories with the potential to rise significantly from the current levels.
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