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TEXT-S&P: BreitBurn Energy note rating unchanged by add-on
September 24, 2012 / 4:46 PM / 5 years ago

TEXT-S&P: BreitBurn Energy note rating unchanged by add-on

Sept 24 - Standard & Poor's Ratings Services said today the 'B' rating on
BreitBurn Energy Partners' senior unsecured notes due 2022 would remain
unchanged following the company's plan to add $200 million. This brings the
total issue amount to $450 million. The recovery rating on the note remains '5',
indicating our expectation of modest (10% to 30%) recovery for lenders in the
event of default. BreitBurn plans to use the proceeds to refinance borrowings
under its credit facility. 

The ratings on Los Angeles-based oil and gas property developer BreitBurn 
reflect our assessment of the company's "vulnerable" business risk and 
"aggressive" financial risk. The ratings incorporate the company's relatively 
small asset base and production levels, some geographic concentration (about 
50% of its total proved reserves are in Michigan), and modest organic growth 
prospects from its mature asset base. The ratings also take into account its 
acquisitive strategy as a master limited partnership (MLP) that focuses on 
maintaining its dividend and its relatively high cost structure compared with 
other exploration and production (E&P) companies. These risks are adequately 
mitigated at the rating level by a significant hedge book over the next few 
years that should help offset natural gas and oil price volatility, a large 
concentration of proved developed reserves in its asset base, long-lived 
reserves, and diversity between oil and gas.

RELATED RESEARCH AND CRITERIA
     -- Standard & Poor's Raises Its U. S. Natural Gas Price Assumptions; Oil 
Price Assumptions Are Unchanged, July 24, 2012
     -- Key Credit Factors: Global Criteria For Rating The Oil And Gas 
Exploration And Production Industry, Jan. 20, 2012
     -- Liquidity Descriptors For Global Corporate Issuers, Sept. 28, 2011
     -- 2008 Corporate Criteria: Our Rating Process, April 15, 2008

RATINGS LIST
BreitBurn Energy Partners 
 Corporate credit rating                      B+/Stable/--
 $450 mil senior unsecured notes due 2022     B
  Recovery rating                             5


Complete ratings information is available to subscribers of RatingsDirect on 
the Global Credit Portal at www.globalcreditportal.com. All ratings affected 
by this rating action can be found on Standard & Poor's public Web site at 
www.standardandpoors.com. Use the Ratings search box located in the left 
column.

Our Standards:The Thomson Reuters Trust Principles.
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