Delaware
(State or other jurisdiction of
incorporation or organization)
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001-33055
(Commission
File Number)
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74-3169953
(I.R.S. Employer
Identification No.)
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Exhibit No.
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Exhibit Description
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99.1
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BreitBurn Energy Partners L.P. first quarter 2011 earnings release dated May 10, 2011.
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BREITBURN ENERGY PARTNERS L.P.
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By:
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BREITBURN GP, LLC,
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its general partner
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Dated: May 10, 2011
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By:
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/s/ James G. Jackson
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James G. Jackson
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Chief Financial Officer
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-
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The Partnership delivered another quarter of strong financial and operating results, with EBITDA, production, and lease operating expenses trending in-line with or exceeding guidance.
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-
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In February 2011, the Partnership completed a public offering of 4,945,000 common units at $21.25 per unit representing additional limited partner interests. The Partnership received net proceeds of approximately $100 million, which were used to reduce borrowings under its bank credit facility and increase the Partnership’s flexibility in funding future acquisitions. As of April 30, 2011, the Partnership had $121 million outstanding under the credit facility.
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-
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On April 28, 2011, the Partnership announced an increased cash distribution for the first quarter of 2011 at the rate of $0.4175 per unit, or $1.67 on an annualized basis, to be paid on May 13, 2011 to the record holders of common units at the close of business on May 10, 2011. This represents an increase of 11.3% over the cash distribution for the first quarter of 2010.
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-
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On May 9, 2011, the Partnership completed its semi-annual borrowing base redetermination, which resulted in an increase of its borrowing base from $659 million to $735 million.
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-
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As expected and consistent with past seasonal trends, total production decreased from 1,700 MBoe in the fourth quarter of 2010 to 1,629 MBoe in the first quarter of 2011 primarily as a result of harsher than normal winter weather in Michigan. Average daily production decreased from 18,480 Boe/day in the fourth quarter of 2010 to 18,098 Boe/day in the first quarter of 2011.
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o
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Oil and NGL production was 773 MBoe compared to 791 MBoe.
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o
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Natural gas production was 5,138 MMcf compared to 5,452 MMcf.
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-
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Lease operating expenses per Boe, which include district expenses and processing fees and exclude production/property taxes and transportation costs, decreased to $16.87 per Boe in the first quarter of 2011 from $17.37 per Boe in the fourth quarter of 2010.
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-
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General and administrative expenses, excluding non-cash unit-based compensation, were $7.1 million, or $4.33 per Boe, in the first quarter of 2011 compared to $5.9 million, or $3.47 per Boe, in the fourth quarter of 2010.
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-
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Adjusted EBITDA, a non-GAAP measure, was $56.0 million in the first quarter, down from $59.1 million in the fourth quarter of 2010.
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-
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Oil and natural gas sales revenues, including realized gains and losses on commodity derivative instruments, were $99.0 million in the first quarter of 2011, down slightly from $99.8 million in the fourth quarter of 2010.
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-
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Realized gains from commodity derivative instruments were $6.4 million in the first quarter of 2011 compared to $21.7 million in the fourth quarter of 2010.
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-
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NYMEX WTI crude oil spot prices averaged $94.07 per barrel and NYMEX natural gas prices averaged $4.20 per Mcf in the first quarter of 2011 compared to $85.16 per barrel and $3.98 per Mcf, respectively, in the fourth quarter of 2010.
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-
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Realized crude oil and natural gas prices averaged $73.81 per Boe and $7.38 per Mcf, respectively, in the first quarter of 2011, compared to $78.95 per Boe and $7.38 per Mcf, respectively, in the fourth quarter of 2010.
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-
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Net loss, including the effect of unrealized gains on commodity derivative instruments, was $94.7 million, or $1.67 per diluted limited partner unit, in the first quarter of 2011 compared to a net loss of $70.9 million, or $1.25 per diluted limited partner unit, in the fourth quarter of 2010.
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-
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Capital expenditures totaled $9.7 million in the first quarter of 2011 compared to $16.8 million in the fourth quarter of 2010.
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Three Months Ended
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||||||||||||
March 31,
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December 31,
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March 31,
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||||||||||
Thousands of dollars, except as indicated
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2011
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2010
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2010
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|||||||||
Oil, natural gas and NGL sales (a)
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$ | 92,575 | $ | 78,135 | $ | 80,469 | ||||||
Realized gain on commodity derivative instruments
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6,443 | 21,677 | 12,146 | |||||||||
Unrealized (gain) loss on commodity derivative instruments
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(112,620 | ) | (82,307 | ) | 39,919 | |||||||
Other revenues, net
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898 | 660 | 632 | |||||||||
Total revenues
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$ | (12,704 | ) | $ | 18,165 | $ | 133,166 | |||||
Lease operating expenses and processing fees
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$ | 27,485 | $ | 29,536 | $ | 30,491 | ||||||
Production and property taxes
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5,769 | 5,626 | 5,579 | |||||||||
Total lease operating expenses
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$ | 33,254 | $ | 35,162 | $ | 36,070 | ||||||
Transportation expenses
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1,423 | 943 | 847 | |||||||||
Purchases
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154 | 112 | 52 | |||||||||
Change in inventory
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1,980 | (2,121 | ) | (1,118 | ) | |||||||
Total operating costs
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$ | 36,811 | $ | 34,096 | $ | 35,851 | ||||||
Lease operating expenses pre taxes per Boe (b)
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$ | 16.87 | $ | 17.37 | $ | 19.12 | ||||||
Production and property taxes per Boe
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3.54 | 3.31 | 3.50 | |||||||||
Total lease operating expenses per Boe
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20.41 | 20.68 | 22.62 | |||||||||
General and administrative expenses excluding unit-based compensation
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$ | 7,058 | $ | 5,907 | $ | 6,374 | ||||||
Net income (loss)
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$ | (94,713 | ) | $ | (70,868 | ) | $ | 57,910 | ||||
Net income (loss) per diluted limited partnership unit
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$ | (1.67 | ) | $ | (1.25 | ) | $ | 1.02 | ||||
Total production (MBoe)
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1,629 | 1,700 | 1,595 | |||||||||
Oil and NGL (MBoe)
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773 | 791 | 727 | |||||||||
Natural gas (MMcf)
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5,138 | 5,452 | 5,207 | |||||||||
Average daily production (Boe/d)
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18,098 | 18,480 | 17,725 | |||||||||
Sales volumes (MBoe)
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1,682 | 1,664 | 1,594 | |||||||||
Average realized sales price (per Boe) (c) (d)
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$ | 58.78 | $ | 59.99 | $ | 58.15 | ||||||
Oil and NGL (per Boe) (c) (d)
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73.81 | 78.95 | 72.79 | |||||||||
Natural gas (per Mcf) (c)
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7.38 | 7.38 | 7.65 |
(a)
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Q4 2010 and Q1 2010 include $124 for each period of amortization of an intangible asset related to crude oil sales contracts.
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(b)
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Includes lease operating expenses, district expenses and processing fees.
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(c)
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Includes realized gains on commodity derivative instruments.
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(d)
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Includes crude oil purchases. 2010 excludes amortization of intangible asset related to crude oil sales contracts.
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Three Months Ended
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||||||||||||
March 31,
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December 31,
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March 31,
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||||||||||
Thousands of dollars
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2011
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2010
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2010
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|||||||||
Reconciliation of net income (loss) to Adjusted EBITDA:
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||||||||||
Net income (loss) attributable to the partnership
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$ | (94,747 | ) | $ | (70,903 | ) | $ | 57,839 | ||||
Unrealized (gain) loss on commodity derivative instruments
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112,620 | 82,307 | (39,919 | ) | ||||||||
Depletion, depreciation and amortization expense
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24,641 | 33,159 | 22,054 | |||||||||
Interest expense and other financing costs (a)
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10,443 | 13,116 | 6,551 | |||||||||
Unrealized gain on interest rate derivatives
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(1,366 | ) | (3,126 | ) | (691 | ) | ||||||
(Gain) loss on sale of assets
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14 | (123 | ) | 115 | ||||||||
Income taxes
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(1,002 | ) | (439 | ) | 144 | |||||||
Amortization of intangibles
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- | 124 | 124 | |||||||||
Unit-based compensation expense (b)
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5,413 | 5,009 | 4,883 | |||||||||
Adjusted EBITDA
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$ | 56,016 | $ | 59,124 | $ | 51,100 |
Three Months Ended
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March 31,
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December 31,
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March 31,
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||||||||||
Thousands of dollars
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2011 | 2010 | 2010 | |||||||||
Reconciliation of net cash flows from operating activities to Adjusted EBITDA:
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||||||||||||
Net cash from operating activities
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$ | 54,399 | $ | 38,722 | $ | 44,635 | ||||||
Increase (decrease) in assets net of liabilities relating to operating activities
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(7,597 | ) | 9,983 | 770 | ||||||||
Interest expense (a) (c)
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9,139 | 10,488 | 5,727 | |||||||||
Income from equity affiliates, net
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103 | (157 | ) | (158 | ) | |||||||
Incentive compensation expense (d)
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(24 | ) | (29 | ) | - | |||||||
Incentive compensation paid
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- | - | 80 | |||||||||
Income taxes
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30 | 152 | 117 | |||||||||
Non-controlling interest
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(34 | ) | (35 | ) | (71 | ) | ||||||
Adjusted EBITDA
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$ | 56,016 | $ | 59,124 | $ | 51,100 |
(a) Includes realized gain/loss on interest rate derivatives.
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(b) Represents non-cash long term unit-based incentive compensation expense.
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(c) Excludes amortization of debt issuance costs and amortization of Senior Note discount.
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(d) Represents cash-based incentive compensation plan expense.
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Year
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2011
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2012
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2013
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2014
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2015
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Oil Positions:
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Fixed Price Swaps:
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||||||||||||||||||||
Hedged Volume (Bbl/d)
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5,151 | 5,039 | 6,480 | 5,000 | 2,000 | |||||||||||||||
Average Price ($/Bbl)
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$ | 76.56 | $ | 77.15 | $ | 81.37 | $ | 88.59 | $ | 99.00 | ||||||||||
Participating Swaps: (a)
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||||||||||||||||||||
Hedged Volume (Bbl/d)
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1,377 | - | - | - | - | |||||||||||||||
Average Price ($/Bbl)
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$ | 60.00 | $ | - | $ | - | $ | - | $ | - | ||||||||||
Average Participation %
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53.1 | % | - | - | - | - | ||||||||||||||
Collars:
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||||||||||||||||||||
Hedged Volume (Bbl/d)
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2,231 | 2,477 | 500 | 1,000 | 1,000 | |||||||||||||||
Average Floor Price ($/Bbl)
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$ | 103.79 | $ | 110.00 | $ | 77.00 | $ | 90.00 | $ | 90.00 | ||||||||||
Average Ceiling Price ($/Bbl)
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$ | 153.06 | $ | 145.39 | $ | 103.10 | $ | 112.00 | $ | 113.50 | ||||||||||
Floors:
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Hedged Volume (Bbl/d)
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- | - | - | - | - | |||||||||||||||
Average Floor Price ($/Bbl)
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$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
Total:
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Hedged Volume (Bbl/d)
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8,759 | 7,516 | 6,980 | 6,000 | 3,000 | |||||||||||||||
Average Price ($/Bbl)
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$ | 80.89 | $ | 87.97 | $ | 81.06 | $ | 88.83 | $ | 96.00 | ||||||||||
Gas Positions:
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Fixed Price Swaps:
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Hedged Volume (MMBtu/d)
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20,282 | 19,128 | 37,000 | 7,500 | 7,500 | |||||||||||||||
Average Price ($/MMBtu)
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$ | 6.78 | $ | 7.10 | $ | 6.50 | $ | 6.00 | $ | 6.00 | ||||||||||
Collars:
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||||||||||||||||||||
Hedged Volume (MMBtu/d)
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20,282 | 19,129 | - | - | - | |||||||||||||||
Average Floor Price ($/MMBtu)
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$ | 9.00 | $ | 9.00 | $ | - | $ | - | $ | - | ||||||||||
Average Ceiling Price ($/MMBtu)
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$ | 11.13 | $ | 11.89 | $ | - | $ | - | $ | - | ||||||||||
Total:
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Hedged Volume (MMBtu/d)
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40,564 | 38,257 | 37,000 | 7,500 | 7,500 | |||||||||||||||
Average Price ($/MMBtu)
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$ | 7.89 | $ | 8.05 | $ | 6.50 | $ | 6.00 | $ | 6.00 |
(a)
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Participating swap combines a swap and a call option with the same strike price.
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March 31,
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December 31,
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|||||||
Thousands
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2011
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2010
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||||||
ASSETS
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Current assets
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Cash
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$ | 6,177 | $ | 3,630 | ||||
Accounts and other receivables, net
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51,587 | 53,520 | ||||||
Derivative instruments
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42,006 | 54,752 | ||||||
Related party receivables
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2,556 | 4,345 | ||||||
Inventory
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4,875 | 7,321 | ||||||
Prepaid expenses
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5,899 | 6,449 | ||||||
Total current assets
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113,100 | 130,017 | ||||||
Equity investments
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7,803 | 7,700 | ||||||
Property, plant and equipment
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Oil and gas properties
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2,142,636 | 2,133,099 | ||||||
Other assets
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11,163 | 10,832 | ||||||
2,153,799 | 2,143,931 | |||||||
Accumulated depletion and depreciation
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(445,446 | ) | (421,636 | ) | ||||
Net property, plant and equipment
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1,708,353 | 1,722,295 | ||||||
Other long-term assets
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||||||||
Derivative instruments
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25,016 | 50,652 | ||||||
Other long-term assets
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16,380 | 19,503 | ||||||
Total assets
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$ | 1,870,652 | $ | 1,930,167 | ||||
LIABILITIES AND EQUITY
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Current liabilities
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||||||||
Accounts payable
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$ | 28,029 | $ | 26,808 | ||||
Derivative instruments
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58,219 | 37,071 | ||||||
Revenue and royalties payable
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17,059 | 16,427 | ||||||
Salaries and wages payable
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3,938 | 12,594 | ||||||
Accrued liabilities
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13,712 | 8,417 | ||||||
Total current liabilities
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120,957 | 101,317 | ||||||
Credit facility
|
113,000 | 228,000 | ||||||
Senior notes, net
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300,240 | 300,116 | ||||||
Deferred income taxes
|
1,057 | 2,089 | ||||||
Asset retirement obligation
|
46,734 | 47,429 | ||||||
Derivative instruments
|
91,447 | 39,722 | ||||||
Other long-term liabilities
|
2,066 | 2,237 | ||||||
Total liabilities
|
675,501 | 720,910 | ||||||
Equity
|
||||||||
Partners' equity
|
1,194,702 | 1,208,803 | ||||||
Noncontrolling interest
|
449 | 454 | ||||||
Total equity
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1,195,151 | 1,209,257 | ||||||
Total liabilities and equity
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$ | 1,870,652 | $ | 1,930,167 | ||||
Common units outstanding
|
59,040 | 53,957 |
Three Months Ended
|
||||||||
March 31,
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||||||||
Thousands of dollars, except per unit amounts
|
2011
|
2010
|
||||||
Revenues and other income items
|
||||||||
Oil, natural gas and natural gas liquid sales
|
$ | 92,575 | $ | 80,469 | ||||
Gain (loss) on commodity derivative instruments, net
|
(106,177 | ) | 52,065 | |||||
Other revenue, net
|
898 | 632 | ||||||
Total revenues and other income items
|
(12,704 | ) | 133,166 | |||||
Operating costs and expenses
|
||||||||
Operating costs
|
36,811 | 35,851 | ||||||
Depletion, depreciation and amortization
|
24,641 | 22,054 | ||||||
General and administrative expenses
|
12,471 | 11,257 | ||||||
Loss on sale of assets
|
14 | 115 | ||||||
Total operating costs and expenses
|
73,937 | 69,277 | ||||||
Operating income (loss)
|
(86,641 | ) | 63,889 | |||||
Interest expense, net of capitalized interest
|
9,420 | 3,617 | ||||||
(Gain) loss on interest rate swaps
|
(343 | ) | 2,243 | |||||
Other income, net
|
(3 | ) | (25 | ) | ||||
Income (loss) before taxes
|
(95,715 | ) | 58,054 | |||||
Income tax expense (benefit)
|
(1,002 | ) | 144 | |||||
Net income (loss)
|
(94,713 | ) | 57,910 | |||||
Less: Net income attributable to noncontrolling interest
|
(34 | ) | (71 | ) | ||||
Net income (loss) attributable to the partnership
|
(94,747 | ) | 57,839 | |||||
Basic net income (loss) per unit
|
$ | (1.67 | ) | $ | 1.02 | |||
Diluted net income (loss) per unit
|
$ | (1.67 | ) | $ | 1.02 |
Three months ended
|
||||||||
March 31,
|
||||||||
Thousands of dollars
|
2011
|
2010
|
||||||
Cash flows from operating activities
|
||||||||
Net income (loss)
|
$ | (94,713 | ) | $ | 57,910 | |||
Adjustments to reconcile to cash flows from operating activities:
|
||||||||
Depletion, depreciation and amortization
|
24,641 | 22,054 | ||||||
Unit-based compensation expense
|
5,437 | 4,883 | ||||||
Unrealized (gain) loss on derivative instruments
|
111,254 | (40,610 | ) | |||||
Income from equity affiliates, net
|
(103 | ) | 158 | |||||
Deferred income taxes
|
(1,032 | ) | 27 | |||||
Amortization of intangibles
|
- | 124 | ||||||
Loss on sale of assets
|
14 | 115 | ||||||
Other
|
257 | 824 | ||||||
Changes in net assets and liabilities
|
||||||||
Accounts receivable and other assets
|
4,462 | 7,884 | ||||||
Inventory
|
2,446 | (1,261 | ) | |||||
Net change in related party receivables and payables
|
1,789 | (513 | ) | |||||
Accounts payable and other liabilities
|
(53 | ) | (6,960 | ) | ||||
Net cash provided by operating activities
|
54,399 | 44,635 | ||||||
Cash flows from investing activities
|
||||||||
Capital expenditures
|
(12,735 | ) | (9,954 | ) | ||||
Net cash used in investing activities
|
(12,735 | ) | (9,954 | ) | ||||
Cash flows from financing activities
|
||||||||
Issuance of common units
|
100,482 | - | ||||||
Distributions
|
(23,559 | ) | - | |||||
Proceeds from issuance of long-term debt
|
60,500 | 22,000 | ||||||
Repayments of long-term debt
|
(175,500 | ) | (58,000 | ) | ||||
Change in book overdraft
|
(1,003 | ) | 878 | |||||
Long-term debt issuance costs
|
(37 | ) | - | |||||
Net cash used in financing activities
|
(39,117 | ) | (35,122 | ) | ||||
Increase (decrease) in cash
|
2,547 | (441 | ) | |||||
Cash beginning of period
|
3,630 | 5,766 | ||||||
Cash end of period
|
$ | 6,177 | $ | 5,325 |