BreitBurn CFO says company agrees with Quicksilver that debt reduction is priority

By Jennifer Lanning Drey

Portland, Ore., May 7 - BreitBurn Energy Partners LP's chief financial officer, James Jackson, said Thursday that he "could not agree more" with Quicksilver Resources Inc.'s opinion that BreitBurn must focus on paying down its debt in 2009.

Speaking during a company conference call, Jackson said BreitBurn believes it could dedicate as much as $130 million to debt reduction in 2009, based on the company's plans to conserve capital, reduce costs and generate cash flow.

"Improving our operations, reducing cost expenses and aggressively reducing debt, which will ultimately enable us to reinstate distributions, continue to be our primary focuses," Hal Washburn, co-chief executive officer of BreitBurn, said during the call.

As previously reported, in April BreitBurn said it temporarily suspended distributions to remain in compliance with some provisions of its credit facility and to redirect cash flow to pay down debt.

In an April 30 letter to BreitBurn GP, LLC's board, Quicksilver said it was deeply disappointed by the decision.

During Thursday's call, Jackson noted that BreitBurn ended the first quarter with $706.9 million of long-term debt, down from $736.0 million at Dec. 31. Since the close of the quarter, the company has reduced outstanding debt to $693.0 million, he said.

During the first quarter, BreitBurn generated $70.7 million of cash flow from operations, which included a $45.6 million hedge monetization that was used to pay down debt. The company generated $94.3 million in the comparable 2008 period when significantly higher oil and natural gas prices prevailed.

A key financial goal for BreitBurn in 2009 is to fund operations, capital expenditures, interest payments and distributions from internally generated cash flow and to preserve financial flexibility, Jackson said.

BreitBurn is a Los Angeles-based oil and gas limited partnership.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.