BreitBurn Energy Partners LP on Monday said that it will acquire interests in a pair of Whiting Petroleum Corp. oil fields in Oklahoma and related assets for about $860 million.
Hal Washburn, co-founder and chief executive of the Los Angeles oil and gas company, said the acquisition creates long-term value for his investors, and significantly boost the partnership’s distributable cash flow per partnership unit.
“It’s a sizable and highly accretive deal that adds long life to our assets,” Washburn said in a conference call with analysts.
The deal includes stakes in the Postle and North East Hardesty oil fields along with some other midstream assets mostly in the Oklahoma Panhandle. The older fields will require use of enhanced oil-recovery methods, a BreitBurn specialty.
The deal far surpasses BreitBurn’s earlier announced $500 million acquisition target for 2013, and also increases the company’s geographic presence to nine states.
The company is using its credit facility, which recently was amended to allow for up to $1.5 billion in borrowings. Prior to the deal, the company had only drawn $230 million on what had been a $1.2 billion credit line. The deal is expected to close by July 31.
Shares closed down 55 cents, or 3 percent, to $17.37 on Nasdaq.