Los Angeles oil company Breitburn Energy Partners announced Thursday that it has agreed to buy QR Energy of Houston for nearly $2 billion in cash and stock.

The deal will create the largest master limited partnership in the nation focused on oil exploration and production, with a pro forma enterprise value of $7.8 billion.

“We are very pleased to reach this agreement with QR Energy, a company that we have always admired given its enviable MLP-friendly assets and engineering-focused operating strategy that is strikingly similar to our own,” Breitburn Chief Executive Halbert Washburn said in a statement. “Its world-class portfolio of conventional properties in large, oil rich basins fits perfectly with our asset base.”

The announcement marks a spectacular end to a dry spell for deals for Breitburn, which depends on acquisitions to fuel growth as production at its current fields wanes. Last year, Breitburn closed two deals valued at a cumulative $1.2 billion, but until this announcement, the company hadn’t reached any deals this year, despite setting a target of $600 million.

Under terms of the deal, holders of QR Energy’s common and Class B units will receive approximately 72 million Breitburn units valued at $22.48 each, for a stock transaction value of $1.62 billion. Breitburn would also pay $350 million in cash to holders of QR Energy preferred units and would assume about $1 billion in QR Energy debt, for a total deal value of about $3 billion.

Breitburn senior management will lead the combined company, which will remain headquartered in downtown Los Angeles. Breitburn will also add a board member mutually agreed upon by the two entities.

The deal has been approved by the boards of both companies, but it must still be approved by QR Energy unitholders and government regulators, with a closing date set for late this year or early next year.

Check out the Business Journal’s earlier coverage.