Shares of Breitburn Energy Partners plunged more than 20 percent on Tuesday after the Los Angeles oil and gas drilling partnership made a long-expected announcement it is suspending shareholder distributions, effective immediately.

Breitburn’s distributions, similar to dividends, were 50 cents a share. That equated last week to a payout of more than 24 percent of the stock price – the highest on the Business Journal’s Stock Index.

Like all oil companies, Breitburn has been rocked by the prolonged collapse in crude oil prices. But Breitburn has been hit even harder because in the summer of 2014, just two months before oil prices started falling, it made a $2 billion acquisition, financed almost entirely with debt that continues to loom over the company.

Breitburn had tried to take steps to protect itself from an oil price drop by hedging its oil property portfolio. This year, more than 70 percent of its portfolio is locked in at $93.50 a barrel. (West Texas Intermediate crude oil closed Tuesday at $41.63 a barrel.) But the hedges fall off sharply next year and disappear almost entirely by 2017, leaving Breitburn exposed if oil prices don’t rebound by then.

The company has pared back expenses, laid off workers, and slashed its shareholder distribution by 75 percent. Then this past April, Breitburn secured a $1 billion investment in preferred stock purchases and new debt from EIG Global Energy Partners, a Washington, D.C. private equity firm. That allowed Breitburn to continue shareholder payouts for a few months, giving time to see if oil prices would head back up.

Instead, oil prices have dropped a bit more since then, wreaking havoc in the entire industry. In October, larger rival LINN Energy of Houston suspended its shareholder distribution, giving cover to Breitburn and other oil drilling partnerships in the process. Analysts then expected Breitburn to immediately follow suit.

That announcement finally came after Monday’s market close. Breitburn Chief Executive Hal Washburn said, “In light of the ongoing weakness in commodity prices, and crude oil prices in particular, and after careful consideration, Breitburn has decided to suspend cash distributions on its common units.

Washburn continued: “While the decision…is a difficult one, we believe it is in the long-term best interest of the company and will allow us to save approximately $111 million annually, which we can redirect to reduce debt or invest in the business and better position Breitburn for the future.”

Breitburn shares closed Tuesday at $1.59, down 20.5 percent from Monday’s close, on heavy trading volume of nearly 8 million share units.

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