Ethan Bellamy is Robert W. Baird & Co.’s Senior Analyst covering master limited partnerships and U.S. royalty trusts. In an interview last May, this top-ranked oil and gas industry analyst was positive on BreitBurn Energy Partner’s (BBEP) royalty trusts and MLP management: “…and then longer term, we think that there’s potential production upside from their exposure to the Orcutt diatomite. We have a $21 target on ROYT, which implies 30% potential to our target and 9% in total rate of return. We think that’s attractive and really well-run. It’s actually one of the few that’s actively marketed by the folks that run it. The management team is the same folks who run BreitBurn Energy Partners, and that’s interesting because they are in the market every day and, incidentally while we are not talking about MLPs, today we do like the BreitBurn management team and BBEP as well.”
Daniel Katzenberg is Executive Director and Senior Analyst for Oppenheimer & Co., and he seconds this recommendation in his interview from last March: “On the upstream side, there are two names that I think are attractive. BreitBurn (BBEP) had a very active year last year in the acquisition market, and they currently have about $900 million available to make acquisitions this year. We expect that they’ll most likely use the majority of that and make accretive acquisitions. They had a secondary offering just a few weeks back, so I think they’re pretty well-positioned from this point going forward. I expect to get some acquisition announcements soon, and possibly of a large size, that will really improve their outlook.”
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Halbert S. Washburn, the CEO and a Director at BreitBurn Energy Partners, confirms that they are an acquisition-driven organization and explains their methodology in this interview from earlier this year: “We look at a lot of deals, and we get a very small amount of them. In 2011, we looked at roughly 200 transactions and closed two. In 2012 we screened about 480 deals and closed six. So we look at a lot of transactions. Our team is used to having deals fall through. Ninety-nine times out of 100, we don’t get the deal. But the deals that we do get, we get because we have worked them very hard, we understand them as well and better than as anyone. And then, we are able to make a strong and aggressive bid.”
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