NEW YORK (TheStreet) -- BreitBurn Energy Partners L.P. (BBEP), a master limited partnership that develops oil and natural gas fields in the U.S., should be appealing to investors seeking income because it has a dividend yield of 10% and will start giving monthly cash distributions in January.
Founded 25 years ago, BreitBurn, with a market cap of almost $2 billion, has grown from just two wells in California to more than 5,000 wells in nine states, with significant exposure to the Permian Basin in Texas, one of the leading oil-producing regions of the world.
The firm has a history of successful acquisitions. In 2012, it spent more than $600 million on seven deals. Of these, nearly $420 million were spent on acquiring oil-rich properties at the Permian Basin from several different buyers.
In July, BreitBurn acquired oil and gas properties, as well as their related midstream assets, in the Oklahoma Panhandle and New Mexico for $864 million.
Last week, BreitBurn agreed to acquire additional properties at the Permian Basin from CrownRock for $282 million. BreitBurn will tap into its credit facility to fund this acquisition. This is a fairly low risk acquisition as the properties purchased are next to BreitBurn's existing acreage.
About two-thirds of the BreitBurn's assets are oil and the rest is natural gas. The latest acquisition represents average daily production of 2,900 barrels of oil equivalents. With proven reserves of 16.6 million barrels, the properties have reserve life of more than 15 years. BreitBurn's unit holders will immediately start seeing the benefits of this acquisition in their distributable cash flows.