Breitburn Energy Partners

Breitburn Energy Partners logo


Investment Banker

Los Angeles, CA

An independent oil and gas partnership that acquires, exploits, and develops oil, natural gas liquids (NGLs), and natural gas properties in the United States
  • As a result of a prolong period of declining oil prices, a highly levered balance sheet after a significant acquisition, and an upcoming redetermination of the RBL credit facility, the company filed for bankruptcy in May 2016.
  • The debtors obtained a $150mm DIP facility from its RBL lenders which provided liquidity and enough runway to pursue a plan of reorganization.
  • Given the debtors’ MLP legal organization the public equity holders were exposed to a significant tax liability under a cancelation of debt scenario; as a result, the judge ordered an official equity committee to be formed.
Key Challenges
Oil Industry Cyclical Downturn
Depressed Asset Values
Unique Geographical Footprint
Plan of Reorganization
Contested Valuation
Complex Capital Structure

Engagement Highlights

Following the appointment of the equity committee, Carl Marks Advisors was retained to serve as its exclusive investment banker and advise throughout the financial restructuring.

Engagement highlights include:

  • Review of the 13-week cash flow, monthly operating reports, and liquidity.
  • Negotiate amendments to the DIP facility to ensure the company has enough runway to negotiate a plan of reorganization.
  • Vet the debtors’ business plan, capital requirements, drilling perspectives, and Permian acreage development initiative.
  • Develop and socialize a restructuring term sheet that outlined the equity committee’s financial ask that included NewCo equity shares, a warrant package, rights offering participation, and information rights, among others.
  • Assist industry experts in formulating a valuation for a contested confirmation hearing.
  • Work with counsel to evaluate and size a potential cancelation of debt income liability for the equity holders.

Carl Marks successfully helped negotiate a mitigation of the tax liability to equity holders as part of an overall restructuring solution – a key win for our constituents.

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