By OGJ editors
HOUSTON, June 22 -- Provident Energy Trust (Provident), Calgary, has acquired all shares of Los Angeles-based exploitation and production company BreitBurn Energy LLC for $155 million (Can.) in cash and the assumption of $35 million of working capital and BreitBurn debt.
Under terms of the transaction, Provident will reorganize BreitBurn into a limited partnership (LP) with Provident holding 92% and BreitBurn cofounders and co-CEOs, Randy Breitenbach and Hal Washburn acquiring an 8% interest for $13.7 million. Washburn and Breitenbach will continue to lead BreitBurn's business in the US as co-CEOs.
Provident will fund the acquisition with the proceeds of a concurrent bought deal financing, available only in Canada, and available credit facilities in Canada. BMO Nesbitt Burns served as financial advisor to Provident during this transaction.
BreitBurn's operations are focused in southern California. Operating 99% of its assets, BreitBurn's production for second half 2004 is forecast at 4,200 boe/d, weighted 89% light-medium oil and 11% natural gas. The average production decline rate of BreitBurn's fields is 6%/year.
The BreitBurn acquisition will increase Provident's average production for 2004 to 32,000 boe/d, which will be 42% natural gas, 37% light-medium oil and natural gas liquids, and 21% heavy oil.