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Breitburn Energy Partners to cut capex by 60% in 2016

Last updated: 00:04 27 Feb 2016 AEDT, First published: 19:04 26 Feb 2016 AEDT

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Amid weak oil prices Breitburn expects a 9% drop in output for 2016.

Breitburn Energy Partners (NASDAQ:BBEP), an investor in America’s onshore oil industry, told investors it would be cutting 2016 capex by 60%, down to $80mln, due to the continued weakness in crude prices.

Chief Executive Halbert Washburn, however, said he expected production volumes would only drop by around 9% over the year despite the cutbacks.

He highlighted, in a stock market statement, that the company’s portfolio comprised “quality, long-lived, low-decline” assets.

Results for the twelve months, to December 31 2015, reveals total production of 20.2mln barrels of oil, up from 14.1mln in 2014, as a result of a merger with QR Energy.

“We were very proactive last year in adapting to a volatile commodity price environment,” Washburn added.

“We had strong operating and financial results, with production coming in at the high end of our guidance and our capital, operating, and G&A costs performing in line with or better than our guidance.”

Breitburn reported earnings (adjusted EBITDA) of $636.8mln, up from $473.8mln in the prior year.  

But, a $2.4bn non-cash write off meant the company made a $2.6bn net loss for 2015.

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