BreitBurn Settles Litigation and Now Pays 10.5% Distribution $$

• Posted by ToddSullivan
• on February 8th, 2010

Great start to the week…

We are up 35% in this since October and will continue to hold..

BreitBurn Announces Settlement of All Litigation with Quicksilver and Reinstatement of Distributions at Annual Rate of $1.50 Beginning with the First Quarter

Management will Host a Conference Call and Webcast on Monday, February 8 at 11a.m. Eastern Time

LOS ANGELES, Feb 08, 2010 (BUSINESS WIRE) — BreitBurn Energy Partners L.P. (the “Partnership” or “BreitBurn”) announced today that all litigation between the Partnership and its directors and Quicksilver Resources Inc. (“Quicksilver”) has been settled. BreitBurn also announced its intention to reinstate quarterly cash distributions at the rate of $0.375 per quarter, or $1.50 on an annualized basis, beginning with the first quarter 2010 distribution. The Partnership intends to pay this distribution on or before May 15, 2010.

CEO Hal Washburn said, “Despite a challenging market environment at the start, 2009 proved to be a very successful year for the Partnership. Operationally, we had an excellent year, with total production expected to come in above the high end of our guidance range at approximately 6.52 MMBoe. We also lowered costs, reduced leverage, and, with improvements in commodity prices during the second half of the year, ramped up our capital program. Given the improved market conditions, our increased financial flexibility, and resolution of the Quicksilver litigation, we are pleased to be reinstating quarterly cash distributions and we look forward to a very successful 2010. Furthermore, we are happy to have settled all issues with Quicksilver, and look forward to a positive and productive relationship that will benefit all of our limited partners.”

Additional Terms of Settlement Agreement

In conjunction with settlement of the Quicksilver litigation, Quicksilver will nominate two members to BreitBurn GP, LLC’s Board of Directors. To accommodate these additions, both Messrs. Washburn and Breitenbach will resign from the Board of Directors. The Board will consist of the four current independent directors and the two new members to be nominated by Quicksilver. One of the Quicksilver nominees will be independent of both the Partnership and Quicksilver and the other will be a current independent member of the Quicksilver board. A new independent chairman will be appointed as well. In addition, Mr. Breitenbach’s title will change from Co-Founder and Co-CEO to Co-Founder and President.

In addition, Quicksilver has agreed to a standstill agreement pursuant to which it has agreed not to take certain actions relating to the governance of the Partnership. If Quicksilver’s ownership interest is reduced to certain levels in the future, its nominated directors will no longer serve on the Board and the standstill agreement will terminate. The Partnership has also agreed to pay Quicksilver the sum of $13 million and expects this sum to be paid by insurance. However, discussions with the Partnership’s insurers are ongoing.

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