-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, AB2N3a5OWA6+CD/IZqQzw0Q0IqvA56FLOTIm/BzYdrtRhlblZYPrYpMTrV2j3moT 8ZICUlxsWclDpTNCf+3ugQ== 0001157523-07-011205.txt : 20071113 0001157523-07-011205.hdr.sgml : 20071112 20071113161517 ACCESSION NUMBER: 0001157523-07-011205 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20071113 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20071113 DATE AS OF CHANGE: 20071113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BreitBurn Energy Partners L.P. CENTRAL INDEX KEY: 0001357371 STANDARD INDUSTRIAL CLASSIFICATION: CRUDE PETROLEUM & NATURAL GAS [1311] IRS NUMBER: 743169953 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-33055 FILM NUMBER: 071238397 BUSINESS ADDRESS: STREET 1: 515 SOUTH FLOWER STREET, SUITE 4800 CITY: LOS ANGELES STATE: CA ZIP: 90071 BUSINESS PHONE: (213) 225-5900 MAIL ADDRESS: STREET 1: 515 SOUTH FLOWER STREET, SUITE 4800 CITY: LOS ANGELES STATE: CA ZIP: 90071 8-K 1 a5545759.txt BREITBURN ENERGY PARTNERS L.P. 8-K ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) November 13, 2007 ---------------------- BREITBURN ENERGY PARTNERS L.P. (Exact name of Registrant as specified in its charter) Delaware 001-33055 74-3169953 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification No.) 515 South Flower Street, Suite 4800 Los Angeles, CA 90071 (Address of principal executive office) (213) 225-5900 (Registrant's telephone number, including area code) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ================================================================================ Item 2.02 Results of Operation and Financial Condition. On November 13, 2007, BreitBurn Energy Partners L.P. (the "Partnership") issued a press release announcing financial results for the third quarter 2007. A copy of the press release is attached to this Current Report on Form 8-K as Exhibit 99.1 and is incorporated herein solely for purposes of this Item 2.02 disclosure. The information in this Current Report on Form 8-K provided under Item 2.02, including Exhibit 99.1 attached hereto, shall not be deemed to be "filed" for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that Section, and shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing. Item 9.01 Financial Statements, Pro Forma Financial Information and Exhibits. (d) Exhibits. Exhibit No Exhibit Description - ----------- ------------------------------------------------------------------- 99.1 BreitBurn Energy Partners L.P. third quarter 2007 earnings release dated November 13, 2007. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. BREITBURN ENERGY PARTNERS L.P. By: BREITBURN GP, LLC, its general partner Dated: November 13, 2007 By: /s/ Randall H. Breitenbach ---------------------------------------- Randall H. Breitenbach Co-Chief Executive Officer EX-99.1 2 a5545759ex99_1.txt EXHIBIT 99.1 Exhibit 99.1 BreitBurn Energy Partners L.P. Third Quarter 2007 Results Benefit from Successful Acquisition Strategy; Adjusted EBITDA Increases 73% LOS ANGELES--(BUSINESS WIRE)--Nov. 13, 2007--BreitBurn Energy Partners L.P. (the "Partnership") (NASDAQ:BBEP), an oil and gas master limited partnership ("MLP"), today announced results for its third quarter 2007. Summary of Third Quarter 2007 Results Including unrealized losses on derivative instruments of $22.2 million, net loss for the third quarter totaled $7.5 million, or $0.25 per diluted limited partnership unit. The unrealized losses included a $12 million unrealized loss from commodity swaps related to the recently completed Quicksilver acquisition (described below) as well as the impact of higher crude oil futures prices on hedges for future production. Excluding the impact of unrealized losses on derivative instruments, net income for the third quarter of 2007 would have been $14.7 million, or $0.50 per fully diluted unit. In the second quarter of 2007, the net loss was $1.1 million, or $0.04 per diluted limited partnership unit, including unrealized losses on derivative instruments of $8.4 million. Excluding the impact of unrealized losses on derivative instruments in the second quarter of 2007, net income would have been $7.3 million, $0.29 per fully diluted unit. Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA") totaled $21.2 million, which was $9.0 million higher than the second quarter of 2007, due primarily to higher production volumes from recent acquisitions and higher operating margins. (See "Non-GAAP Financial Measures" and the associated tables for a discussion of management's use of Adjusted EBITDA in this release.) On November 1, 2007, we completed the acquisition of assets and equity interests in certain entities from Quicksilver Resources Inc. in exchange for $750 million in cash and 21,347,972 Common Units. We acquired all of Quicksilver's natural gas, oil and midstream assets in Michigan, Indiana and Kentucky. The midstream assets in Michigan, Indiana and Kentucky consist of gathering, transportation, compression and processing assets that transport and process the Partnership's production as well as third party gas. Hal Washburn, Co-CEO of BreitBurn, said, "We continued to grow our production as a result of our successful acquisition strategy and the ongoing exploitation of our existing properties. The recently completed Quicksilver acquisition substantially increases our production profile going forward and brings with it a significant number of organic growth opportunities that we did not have before." Financial and Operating Results Production During the third quarter, average daily production increased 22% from the second quarter of 2007 to 7,184 boe per day (boe/d). Aggregate production during the third quarter totaled 661,000 boe, an increase of 125,000 boe from the immediately preceding quarter. This production growth was principally driven by two acquisitions during the second quarter of 2007 that were successfully integrated during the third quarter of 2007. While production during the quarter increased substantially from the prior period, average daily production was lower than anticipated due to continuing mechanical problems with three of our 15 wells in Florida. Revenues and Realized Prices Excluding the effect of derivatives, our oil, natural gas and natural gas liquid sales were $49.5 million, or $61.37 per boe, in the third quarter of 2007. Including the effects of realized losses on derivative instruments, realized prices were $58.10 per boe. This compared to oil, natural gas and natural gas liquid sales of $32.4 million, or $54.40 per boe, in the second quarter of 2007. Including the effects of realized gains on derivative instruments, realized prices in the second quarter of 2007 were $55.80 per boe. Lease Operating Expenses Lease operating expenses for the third quarter totaled $13.8 million, or $20.82 per boe, 84 cents per boe higher than the second quarter, and in line with management expectations. Depletion, Depreciation and Amortization (DD&A) DD&A expense for the third quarter totaled $6.1 million, or $9.30 per boe compared with $4.5 million, or $8.42 per boe, for the second quarter of 2007. The increase in DD&A expenses reflects the three acquisitions completed during the first and second quarters of 2007. General and Administrative Expenses (G&A) G&A expenses for the third quarter totaled $5.1 million, including $1.5 million of incentive compensation expenses, and were in line with management expectations. During the second quarter of 2007, G&A expenses totaled $6.6 million, including $3.9 million of incentive compensation expenses. Interest Expense Interest and other financing costs were $521,000 during the third quarter, including approximately $134,000 of interest expense relating to $35 million borrowed during the quarter to fund the deposit made in connection with the Quicksilver acquisition. Funding of the $35 million deposit is reflected in the Partnership's total borrowings of $48 million at September 30, 2007. Crude Oil Derivative Instruments The Partnership has entered into various derivative instruments to manage exposure to volatility in the market price of crude oil. The Partnership intends to use options (including collars) and fixed price swaps for managing risk relating to commodity prices. In September 2007, in connection with the Quicksilver acquisition, the Partnership entered into certain commodity swaps for crude oil and natural gas that were contingent upon the closing of the acquisition (see the following table). The crude oil contracts settle against NYMEX WTI and the natural gas contracts settle against Natural Gas - Michcon City Gate Inside FERC. Year Product Volume Terms Effective Period ====================================================================== 2008 Crude Oil 680 Bbl/d Swaps - $71.56 per January 1 - Bbl December 31 - ------ ------------ ------------ ------------------ ------------------ 2009 Crude Oil 680 Bbl/d Swaps - $71.56 per January 1 - Bbl December 31 - ------ ------------ ------------ ------------------ ------------------ 2010 Crude Oil 680 Bbl/d Swaps - $71.56 per January 1 - Bbl December 31 ====================================================================== 2008 Natural Gas 48,643 Swaps - $8.01 per January 1 - mmbtu/d mmbtu December 31 - ------ ------------ ------------ ------------------ ------------------ 2009 Natural Gas 44,071 Swaps - $8.01 per January 1 - mmbtu/d mmbtu December 31 - ------ ------------ ------------ ------------------ ------------------ 2010 Natural Gas 40,471 Swaps - $8.01 per January 1 - mmbtu/d mmbtu December 31 - ------ ------------ ------------ ------------------ ------------------ 2011 Natural Gas 39,838 Swaps - $8.01 per January 1 - March mmbtu/d mmbtu 31 - ------ ------------ ------------ ------------------ ------------------ The Partnership also added the following contracts in the third quarter of 2007: Year Product Volume Terms (a) Effective Period ====================================================================== 2009 Crude Oil 500 Bbl/d Swap $72.25 per Bbl April 1 - June 30 - ------ ---------- ---------- ---------------------- ------------------ 250 Bbl/d Swap $72.47 per Bbl October 1 - December 31 - ------ ---------- ---------- ---------------------- ------------------ 250 Bbl/d Participating Swap January 1 - $62.50 per Bbl (67.3% December 31 participation above $62.50 floor) - ------ ---------- ---------- ---------------------- ------------------ 250 Bbl/d Participating Swap October 1 - $60.00 per Bbl (70.0% December 31 participation above $60 floor) - ------ ---------- ---------- ---------------------- ------------------ 500 Bbl/d Participating Swap October 1 - $65.00 per Bbl (54.0% December 31 participation above $65 floor) - ------ ---------- ---------- ---------------------- ------------------ 500 Bbl/d Participating Swap October 1 - $65.00 per Bbl (50.0% December 31 participation above $65 floor) ====================================================================== 2010 Crude Oil 250 Bbl/d Swap $72.47 per Bbl January 1 - June 30 - ------ ---------- ---------- ---------------------- ------------------ 250 Bbl/d Swap $71.58 per Bbl January 1 - June 30 - ------ ---------- ---------- ---------------------- ------------------ 500 Bbl/d Participating Swap $65 January 1 - June per Bbl (50.0% 30 participation above $65 floor) - ------ ---------- ---------- ---------------------- ------------------ 500 Bbl/d Swaps - $71.60 per Bbl January 1 - July 31 - ------ ---------- ---------- ---------------------- ------------------ 250 Bbl/d Participating Swap January 1 - June $60.00 per Bbl (70.0% 30 participation above $60 floor) - ------ ---------- ---------- ---------------------- ------------------ 250 Bbl/d Participating Swap January 1 - $62.50 per Bbl (56.2% December 31 participation above $62.50 floor) ====================================================================== (a) A participating swap is a single instrument which combines a swap and a call option with the same strike price. Non-GAAP Financial Measures This press release, the financial tables and other supplemental information, including the reconciliations of certain non-generally accepted accounting principles ("non-GAAP") measures to their nearest comparable generally accepted accounting principles ("GAAP") measures, may be used periodically by management when discussing the Partnership's financial results with investors and analysts and they are also available on the Partnership's website under the Investor Relations tab. Among the non-GAAP financial measures used is "Adjusted EBITDA." This non-GAAP financial measure should not be considered as an alternative to GAAP measures, such as net income, operating income or any other GAAP measure of liquidity or financial performance. Adjusted EBITDA is presented as management believes it provides additional information and metrics relative to the performance of the Partnership's business, such as the cash distributions we expect to pay to our unitholders, as well as our ability to meet our debt covenant compliance tests. Management believes that these financial measures indicate to investors whether or not cash flow is being generated at a level that can sustain or support an increase in our quarterly distribution rates. Adjusted EBITDA may not be comparable to a similarly titled measure of other publicly traded partnerships or limited liability companies because all companies may not calculate Adjusted EBITDA in the same manner. The following tables present reconciliations of the Partnership's consolidated net income and net cash from operating activities to Adjusted EBITDA: Quarter Quarter Quarter Nine Months Ended Ended Ended Ended September 30, June 30, March 31, September 30, Thousands of dollars 2007 2007 2007 2007 - ----------------------- ---------------------------------------------- Reconciliation of consolidated net income to Adjusted EBITDA: Net income (7,466) (1,068) (4,756) (13,290) Unrealized loss on derivative instruments 22,212 8,373 9,696 40,281 Depreciation expense 6,145 4,511 3,087 13,743 Interest and other financing costs 521 603 498 1,622 Income tax provision (249) (215) (97) (561) - ----------------------- ---------------------------------------------- Adjusted EBITDA 21,163 12,204 8,428 41,795 ======================= ============================================== Quarter Quarter Quarter Nine Months Ended Ended Ended Ended September 30, June 30, March 31, September 30, Thousands of dollars 2007 2007 2007 2007 - ----------------------- ---------------------------------------------- Reconciliation of net cash from operating activities to Adjusted EBITDA: Net cash from operating activities 22,110 13,568 13,421 49,099 Add: Increase (decrease) in assets net of liabilities relating to operating activities (22,024) (6,731) (15,133) (43,888) Unrealized loss on derivative instruments 22,212 8,373 9,696 40,281 Cash interest expense 238 844 115 1,197 Equity earnings from affiliates, net 75 (12) (82) (19) Stock based compensation, net of payments (1,470) (4,072) 183 (5,359) Other 22 234 228 484 - ----------------------- ---------------------------------------------- Adjusted EBITDA 21,163 12,204 8,428 41,795 ======================= ============================================== Cash Distribution On November 14, the Partnership will pay a cash distribution of approximately $29.9 million, or $0.4425 per common unit, to its general partner and common unitholders of record as of the close of business on November 12, 2007. The quarterly distribution to be paid in November 2007 represents an increase of approximately 7.3% over our initial quarterly distribution rate of $0.4125 per unit and approximately 4.7% over the August 2007 distribution rate of $0.4225 per unit. As announced on May 25, 2007, management expects to recommend to the Board an additional $0.01 per unit increase effective for the fourth quarter of 2007. If approved by BreitBurn's Board, this increase would raise BreitBurn's distributions per unit to $0.4525 per quarter, or $1.81 on an annualized basis. As announced on September 12, 2007, management expects to recommend a further increase in our annual cash distribution rate to $2.30 for the first quarter of 2008 with an expected rate of $2.50 per unit by the end of 2008. The Board's approval of these recommended increases is subject to review of future operating results including production, commodity prices, operating costs, capital requirements, the performance of the recent acquisition from Quicksilver, and other factors affecting BreitBurn's business. Guidance BreitBurn intends to issue 2008 guidance before year-end and notes that its earlier guidance issued August 14, 2007 for 2007 was prepared prior to the acquisition from Quicksilver and is no longer current or applicable. Conference Call As announced on November 7, 2007, BreitBurn Energy Partners L.P. will host an investor conference call to discuss the Partnership's results today at 5 p.m. (Eastern). Investors may access the conference call over the Internet via the Investor Relations tab of the Partnership's website (www.breitburn.com), or via telephone by dialing 888-228-5274 (international callers dial +1-913-312-1498) a few minutes prior to register. Those listening via the Internet should go to the site 15 minutes early to register, download and install any necessary audio software. In addition, a replay of the call will be available through Tuesday, November 20, by dialing 888-203-1112 (international callers dial +1-719-457-0820) and entering replay PIN 5464596, or by going to the Investor Relations tab of the Partnership's website (www.breitburn.com). BreitBurn Energy Partners L.P. will take live questions from securities analysts and institutional portfolio managers; the complete call is open to all other interested parties on a listen-only basis. About BreitBurn Energy Partners L.P. BreitBurn Energy Partners L.P. is an independent oil and gas limited partnership focused on the acquisition, exploitation and development of oil and gas properties. BreitBurn's assets consist primarily of producing and non-producing crude oil and natural gas reserves located in the Los Angeles Basin in California, the Wind River and Big Horn Basins in central Wyoming, the Permian Basin in West Texas, the Sunniland Trend in Florida, and the Antrim Shale in Michigan and the New Albany Shale in Indiana and Kentucky. Visit BreitBurn online at www.BreitBurn.com Cautionary Statement Relevant to Forward - Looking Information for the Purpose of "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 This press release contains forward-looking statements relating to BreitBurn's operations that are based on management's current expectations, estimates and projections about its operations. Words such as "anticipates," "expects," "intends," "plans," "targets," "projects," "believes," "seeks," "schedules," "estimates," "opportunities", "recommends," "will recommend" and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Unless legally required, BreitBurn undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are crude oil and natural gas prices; the competitiveness of alternate energy sources or product substitutes; technological developments; delays in planned or expected drilling and development programs; the future performance of the properties acquired from Quicksilver Resources Inc.; potential disruption or interruption of BreitBurn's net production due to accidents or severe weather; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; and the factors set forth under the heading "Risk Factors" incorporated by reference from our Annual Report on Form 10-K for the year ended December 31, 2006, and the factors to be set forth in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2007 (to be filed tomorrow) and other filings with the Securities and Exchange Commission. Unpredictable or unknown factors not discussed herein also could have material adverse effects on forward-looking statements. BBEP-IR BreitBurn Energy Partners L.P. and Subsidiaries Consolidated Statements of Operations Three Three Three Nine Months Months Months Months Ended Ended Ended Ended September June March September Thousands of dollars, 30, 30, 31, 30, except per unit amounts 2007 2007 2007 2007 - ------------------------------ ---------- -------- -------- ---------- Revenues and other income items: Oil, natural gas and natural gas liquid sales $ 49,528 $32,413 $21,389 $ 103,330 Realized gain (loss) on derivative instruments (2,555) 822 3,028 1,295 Unrealized loss on derivative instruments (22,212) (8,373) (9,696) (40,281) Other revenue, net 130 237 241 608 ---------- -------- -------- ---------- Total revenues and other income items 24,891 25,099 14,962 64,952 Operating costs and expenses: Operating costs 20,775 14,604 8,692 44,071 Depletion, depreciation and amortization 6,146 4,511 3,087 13,744 General and administrative expenses 5,057 6,633 7,503 19,193 ---------- -------- -------- ---------- Total operating costs and expenses 31,978 25,748 19,282 77,008 ---------- -------- -------- ---------- Operating loss (7,087) (649) (4,320) (12,056) ---------- -------- -------- ---------- Interest and other financing costs, net 522 603 498 1,623 Other expenses, net 71 21 35 127 ---------- -------- -------- ---------- Total other expense 593 624 533 1,750 ---------- -------- -------- ---------- Loss before taxes and minority interest (7,680) (1,273) (4,853) (13,806) ---------- -------- -------- ---------- Income tax benefit (250) (215) (97) (562) Minority interest 37 10 - 47 ---------- -------- -------- ---------- Net loss $ (7,467) $(1,068) $(4,756) $ (13,291) - General Partner's interest in net loss (114) (16) (95) (225) ---------- -------- -------- ---------- Net loss available to common unitholders $ (7,353) $(1,052) $(4,661) $ (13,066) ========== ======== ======== ========== Basic net loss per unit $ (0.25) $ (0.04) $ (0.21) $ (0.52) ========== ======== ======== ========== Diluted net loss per unit $ (0.25) $ (0.04) $ (0.21) $ (0.52) ========== ======== ======== ========== BreitBurn Energy Partners L.P. and Subsidiaries Consolidated Balance Sheets September 30, June 30, March 31, December 31, Thousands of dollars 2007 2007 2007 2006 - ----------------------- ------------- --------- --------- ------------ ASSETS Current assets: Cash and cash equivalents $ 4,452 $ 1,041 $ 484 $ 93 Accounts receivable, net 23,540 19,554 11,208 10,356 Non-hedging derivative instruments 1,845 - - 3,998 Related party receivables 1,672 2,301 1,403 6,209 Inventory 2,294 7,672 - - Prepaid expenses 1,282 2,342 109 215 Intangibles 1,140 1,126 - - Other current assets 160 160 85 85 ------------- --------- --------- ------------ Total current assets 36,385 34,196 13,289 20,956 Investments 160 235 223 142 Property, plant and equipment Oil and gas properties 444,448 436,493 235,732 203,911 Non-oil and gas assets 890 893 591 569 ------------- --------- --------- ------------ 445,338 437,386 236,323 204,480 Accumulated depletion and depreciation (31,275) (25,727) (21,513) (18,610) ------------- --------- --------- ------------ Net property, plant and equipment 414,063 411,659 214,810 185,870 Other long-term assets Deposit for oil and gas properties 35,000 - - - Intangibles 1,808 2,144 - - Other long-term assets 4,085 226 251 276 ------------- --------- --------- ------------ Total assets $ 491,501 $448,460 $228,573 $ 207,244 ============= ========= ========= ============ LIABILITIES AND PARTNERS' EQUITY Current liabilities: Accounts payable $ 7,007 $ 8,091 $ 4,124 $ 3,308 Bank overdraft 3,985 1,850 400 2,036 Non-hedging derivative instruments 14,132 5,157 1,784 - Related party payables 8,750 7,996 5,068 5,913 Accrued liabilities 9,036 5,763 3,303 2,201 ------------- --------- --------- ------------ Total current liabilities 42,910 28,857 14,679 13,458 Long-term debt 48,000 13,500 30,100 1,500 Long-term related party payables 1,640 1,911 1,420 467 Deferred income taxes 3,480 3,763 4,206 4,303 Asset retirement obligation 15,628 15,353 10,717 10,253 Non-hedging derivative instruments 24,051 8,969 3,970 55 Other long-term liability - 440 - - ------------- --------- --------- ------------ Total liabilities 135,709 72,793 65,092 30,036 Minority interest 534 497 - - Partners' equity 355,258 375,170 163,481 177,208 ------------- --------- --------- ------------ Total liabilities and partners' equity $ 491,501 $448,460 $228,573 $ 207,244 ============= ========= ========= ============ BreitBurn Energy Partners L.P. and Subsidiaries Consolidated Statement of Cash Flows Three Three Three Nine Months Months Months Months Ended Ended June Ended Ended September 30, March September 30, 31, 30, Thousands of dollars 2007 2007 2007 2007 - --------------------------- ---------- ---------- --------- ---------- Cash flows from operating activities Net loss $ (7,467) $ (1,068) $ (4,756) $ (13,291) Adjustments to reconcile to cash flow from operating activities: Depletion, depreciation and amortization 6,145 4,511 3,087 13,744 Deferred stock based compensation 1,546 4,020 3,546 9,112 Stock based compensation paid (76) 52 (3,729) (3,753) Unrealized loss on derivative instruments 22,212 8,372 9,696 40,281 Equity in earnings of affiliates, net of dividends 75 (12) (82) (18) Deferred income tax (283) (443) (97) (824) Minority interest 37 10 - 47 Other 110 (233) 320 193 Changes in net assets and liabilities: Accounts receivable and other assets (6,289) (7,972) (901) (15,162) Inventory 5,377 2,862 - 8,239 Due to (from) related parties (30) (1,717) 4,059 2,312 Accounts payable and other liabilities 753 5,186 2,279 8,219 ---------- ---------- --------- ---------- Net cash provided by operating activities 22,110 13,568 13,422 49,099 ---------- ---------- --------- ---------- Cash flows from investing activities Capital expenditures (6,947) (9,650) (1,601) (18,198) Property acquisitions (35,752) (200,961) (30,028) (266,740) ---------- ---------- --------- ---------- Net cash used by investing activities (42,699) (210,611) (31,629) (284,938) ---------- ---------- --------- ---------- Cash flows from financing activities Issuance of common units - 222,000 - 222,000 Repayments of initial distributions by predecessor members - - 581 581 Distributions (12,445) (9,250) (8,947) (30,642) Proceeds from the issuance of long-term debt 67,000 25,200 51,300 143,500 Repayments of long-term debt (32,500) (41,800) (22,700) (97,000) Book overdraft 2,135 1,450 (1,636) 1,949 Long-term debt issuance costs (190) - - (190) ---------- ---------- --------- ---------- Net cash provided by financing activities 24,000 197,600 18,598 240,198 ---------- ---------- --------- ---------- Increase in cash 3,411 557 391 4,359 Cash beginning of period 1,041484 93 93 ---------- ---------- --------- ---------- Cash end of period $ 4,452 $ 1,041 $ 484 $ 4,452 ========== ========== ========= ========== CONTACT: BreitBurn Energy Partners L.P. James G. Jackson, 213-225-5900 x273 (Investor Relations) Executive Vice President and Chief Financial Officer or Ruder Finn/West Pierre Hirsch, 415-692-3060 -----END PRIVACY-ENHANCED MESSAGE-----