All Clear on a Past “Possible” Pick… Updated

• Posted by ToddSullivan
• on October 5th, 2009

Not the purchase I was talking about on Friday. This news just crossed the wires this am.  It is exactly what we thought would happen and it clears up the last remaining hurdle for buying shares.

Here is the first post on the company:

-BreitBurn Energy Partners L.P. (NASDAQ:BBEP) today announced the completion of its semi-annual borrowing base redetermination with its syndicate of lenders in its credit facility. As a result of this process, the Partnership’s borrowing base remains unchanged at $732 million.

Jim Jackson, BreitBurn’s Chief Financial Officer, said, “We are pleased with the reaffirmation of our borrowing base, which was completed without modification to any of the terms of our Credit Agreement, and acknowledge the continued support of our bank group in this process. We have further reduced our outstanding borrowings since July 31st and were approximately $585 million drawn on our credit facility as of September 30th. Our ongoing commitment to debt reduction has resulted in the pay down of more than $150 million in borrowings since year end 2008. As we begin the 2010 planning process, our improved liquidity position will allow us the flexibility to further accelerate capital spending to levels that should enable us to hold production flat and subsequently re-establish distributions when leverage has been reduced to acceptable levels.”

The Partnership’s next semi-annual borrowing base redetermination is scheduled for April 2010.

With the new limit set at $732 and current borrowing at $585, BBEP is at 80% of it borrowing base, allowing it to resume distributions. I would not expect them to do so right now, I would think (and prefer) they pay down more debt first.

But, it does mean they will resume much sooner rather than later. For that reason I am buying shares now as the official distribution news will cause the inevitable jump in shares.

UPDATE:

Most recent investor presentation.
2009 IPAA OGIS San Francisco Presentation_vFINAL

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