Breitburn, QR Energy to merge into upstream MLP

Breitburn Energy Partners LP, Los Angeles, and Houston-based QR Energy LP have signed a definitive merger agreement where Breitburn will purchase QR Energy in an all-stock transaction valued at $3 billion by the companies.

Breitburn Energy Partners LP, Los Angeles, and Houston-based QR Energy LP have signed a definitive merger agreement where Breitburn will purchase QR Energy in an all-stock transaction valued at $3 billion by the companies.

The merger, the companies say, would create the largest oil-weighted upstream master limited partnership with a pro forma enterprise value of about $7.8 billion.

The transaction includes QR Energy’s existing net debt and outstanding Class C convertible preferred units.

After the deal is completed, the newly formed entity will have average production of 57,300 boe/d—67% liquids—based on second-quarter results.

The transaction has been unanimously approved by the boards of both companies. Completion of the deal, which is still subject to the QR Energy unitholder approval, certain regulatory approvals, and customary closing conditions, is expected to close in late 2014 or early 2015.

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