BreitBurn Energy Partners L.P. reported a larger-than-expected fourth-quarter loss because of big losses in derivative instruments it uses to manage price volatility.

The Los Angeles company on Wednesday reported a net loss of $70.9 million (-$1.25 per unit), compared with a loss of $39.7 million (-75 cents) a year earlier.

Net revenue, which included results from derivative instruments, fell 53 percent to $18.2 million, even though natural gas and natural gas liquid sales were up 4.5 percent to $78.1 million. Average daily production for the quarter increased 4 percent to 18,480 barrels.

The partnership said it uses commodity and interest rate derivative instruments to mitigate the risks associated with commodity price volatility and changing interest rates and to help maintain cash flow. The unrealized loss on commodity derivative instruments was $82.3 million compared with a loss of $54.7 million a year earlier.

Analysts surveyed by Thomson Reuters on average expected the company to report a per-share loss of 36 cents on revenue of $90.9 million.

“2010 was a very productive year for the partnership,” Chief Executive Hal Washburn said in a statement. “Our operations teams performed exceptionally, delivering production results at the high-end of our guidance range while aggressively controlling operating costs.”

Shares were down $1.15, or 5 percent, to $20.65.