Breitburn’s founders, Hal Washburn and Randy Breitenbach, met as roommates at Stanford University in the early 1980s. Despite the allure of Silicon Valley’s high-tech industry, Washburn and Breitenbach chose to study petroleum engineering due to the boom in the U.S. oil and gas industry at the time. Washburn and Breitenbach were confident that domestic oil fields would benefit from technological advancements in exploitation methods and decided to follow their entrepreneurial spirit.
By the late 1980s, the domestic oil boom had cooled as major industry players began shifting their focus abroad for new opportunities. These international projects generally required significant capital, and many of the majors began divesting their mature U.S. assets to fund their efforts. Washburn and Breitenbach recognized the value in these mature assets—high-quality, long-lived fields with significant remaining oil in place and low-decline rates. So in 1988, they formed Breitburn Energy Corporation (BEC) with a strategy of acquiring mature fields, increasing their production with state-of-the-art technology and experienced operating teams, and generating stable cash flow from those assets.
In 1993, BEC acquired the West Pico and the Sawtelle oil fields in Los Angeles from Occidental Petroleum. These fields fit the founders' strategy of buying mature oil fields and using tools such as geological modeling and reservoir simulation to optimize the assets. Since being acquired by Hal and Randy, the West Pico and Sawtelle fields have produced more than 12 million barrels of oil; ultimately, they are expected to produce more than 22 million barrels, almost 4 times more than the 6 million barrels of proved reserves that were in place at the time of the acquisition.
BEC expanded its presence in the LA basin in 1999, buying the Santa Fe Springs, Rosecrans, and Brea Olinda oil fields and a portion of the East Coyote Field from Texaco, effectively tripling the size of the company. The Santa Fe Springs field was producing approximately 1,400 boe per day and had estimated proved reserves of approximately 5.8 million boe when it was acquired. Soon thereafter, BEC increased production to approximately 1,800 boe per day and maintained that rate consistently through 2010. Today, Breitburn has nearly doubled the production rate when it acquired the field and expects to produce almost four times the the barrels of reserves in place at the time of acquisition. In June 2004, Provident Energy, a Canadian energy trust, acquired a majority interest in BEC and provided capital to the growing company. BEC continued to make strategic acquisitions and expand its asset base.
While Washburn and Breitenbach saw continued opportunities to expand, they also needed access to long-term capital to fund the company’s growth. Because BEC’s business model—generate predictable cash flow by acquiring and developing long-lived, low-decline oil and gas properties—was less risky than that of a traditional exploration and production company, Washburn and Breitenbach decided to take a portion of the company public as a master limited partnership. Breitburn Energy Partners LP (Breitburn) successfully completed its IPO in October 2006, listing as BBEP on the NASDAQ. Washburn and Breitenbach were named co-CEOs. In 2008, Breitburn acquired all of the interests previously owned by Provident.
In 2012, Randy Breitenbach retired as President of Breitburn and was appointed Vice-Chairman of Breitburn’s Board of Directors. Hal Washburn continues to serve as CEO of Breitburn.
In November 2014, Breitburn completed the largest transaction in company history by acquiring QR Energy, LP.
Commodity prices began a prolonged slide, however, in 2014 which placed significant financial stress on the oil and gas industry. While Breitburn’s long-lived, low-decline portfolio of diverse assets performed in line with its expectations, the lower-for-longer downturn in commodity prices made its existing debt burden unsustainable. As a result, on May 15, 2016, Breitburn (and its affiliates) filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code to facilitate the restructuring of Breitburn’s balance sheet. Click here to view our restructuring page.
* as of December 31, 2015
Breitburn’s business strategy has remained the same since the founding of its predecessor company over 25 years ago. Breitburn's business was formed in 1988 by Halbert Washburn and Randall Breitenbach, two Stanford petroleum engineers who saw an opportunity to maximize the production and value of mature oil and gas properties with technical expertise and state-of-the-art exploitation and drilling technologies. Since then, we have had a consistent goal: manage our oil and gas producing properties for the purpose of generating cash flow and making distributions to our unitholders.
Our experienced and accomplished team has become the backbone of our operations and growth. Today, Breitburn operates under the same disciplined, core investment strategy that we started with:
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As a unitholder of Breitburn, you are investing in a portfolio of high quality, long-lived oil and gas properties with approximately 16 years of reserve life. These are stable, low-decline, proven assets with significant original oil and gas in place, some of which have been producing for more than 100 years. We have been able to successfully apply our exploitation expertise and technology on these assets to maximize production. For the year ended 2013, estimated proved reserves were 323.4 MMBoe*. Comprised of 58% oil, 8% NGLs, and 34% natural gas, 82% of the proved reserves are proved developed (PDP) and 18% are proved undeveloped (PUD). The PUD component of our portfolio provides us with ample low-risk organic growth opportunities at the drill-bit. We intend to grow production and reserves not only through acquisitions but from our legacy assets as well. Meanwhile, our acquisition strategy continues to add high quality assets that complement our current portfolio.
Breitburn’s properties consist primarily of producing and non-producing crude oil and natural gas reserves located primarily in:
*Reflects Breitburn Energy Partners and QR Energy, LP combined asset base as of December 31, 2013
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A monthly distribution MLP, BreitBurn is committed to delivering consistent distributions for our unitholders. Our ability to provide stable distributions is supported by our strong base of assets, organic growth opportunities, strong hedging strategy, and accretive acquisitions. Distributions have increased consistently since the first quarter of 2010.
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Our financing philosophy is to maintain a solid liquidity profile and low leverage ratios over time. We fund acquisitions with financing strategies designed to ensure liquidity while optimizing long-term cost of capital.