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Breitburn Energy Partners LP filed for Chapter 11 Bankruptcy Protection

Oil and gas company Breitburn Energy Partners LP has filed for Chapter 11 bankruptcy protection, citing continued declines in oil prices which have eroded its balance sheet.

Los Angeles-based Breitburn (Nasdaq: BBEP) said it expects to continue its operations without interruption, with cash from its operations, cash on hand, and a $75 million debtor-in-possession financing facility giving Breitburn “more than adequate liquidity” to operate during the restructuring process.

Breitburn said during the last 30 days, it has held “constructive discussions” with various lenders over the terms of a balance sheet restructuring and emergence financing, as well as the treatment of Breitburn’s valuable hedging assets in conjunction with its emergence from the chapter 11 process.

Breitburn said it plans complete these discussions and “evaluate other value-maximizing opportunities to facilitate an expedited balance sheet restructuring that will leave Breitburn as a stronger, deleveraged, and recapitalized enterprise.”

Breitburn in its bankruptcy court filings reported assets of $4.7 billion and debts of $3.4 billion as of March 31, according to the Wall Street Journal.

About $3 billion of Breitburn’s debts are bank and bond debt, with $1.25 billion in loans from lenders led by Wells Fargo Bank, NA. The company also has $650 million of senior secured second-lien bonds and $1.1 billion in unsecured bonds.