QR Energy, LP

QR Energy, LP terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

The Breitburn merger closed on November 19, 2014, and QR Energy became a wholly owned Breitburn subsidiary. Each common and Class B unit converted into 0.9856 Breitburn common units (cash for fractions), Class C preferred units converted into cash totalling $350 million, and restricted and performance units vested and converted on the same terms. The contingent Class B units were treated as issued in an adjusted amount of 6,748,067 less a performance-unit adjustment (the excess of performance units settled in common units over 383,900) and also converted into Breitburn units. NYSE trading in QRE units was suspended on November 20, 2014, delisting was requested, and a Form 15 to end reporting is planned. All directors and listed officers (including CEO Alan Smith and CFO Cedric Burgher) resigned at closing. This completes the merger that was pending in earlier filings.

business combination

QR Energy, LP's exchange filed to remove a class of its securities from listing.

listing compliance notice

QR Energy filed its definitive proxy statement/prospectus for the November 18, 2014 vote on the Breitburn merger. Common and Class B unitholders would get 0.9856 Breitburn common units per unit (capped at 72,001,686 Breitburn units in total), valued at $22.48 per unit on July 23, 2014, a 19% premium to QRE's $18.87 close that day. Class C preferred units get $350 million in cash in total. QRE unitholders would own about 37% of Breitburn afterwards. Approval needs a majority of all outstanding common, Class B and Class C units voting together. The Class B and Class C holders have agreed to vote in favour, and together with the common units those holders own, they represent about 37% of the votes. The board recommends voting for, and not voting counts as a vote against.

business combination

This filing gives the terms of the July 23, 2014 Breitburn merger: each QR Energy common unit and Class B unit converts into 0.9856 Breitburn common units (cash for fractions), while the Class C preferred units get cash totaling $350 million split across those units. Breitburn agreed to raise its monthly distribution to at least $0.1733 per unit after closing. Closing needs QR Energy unitholder approval, an effective Breitburn S-4 and NASDAQ listing; either side can terminate if the merger is not completed by March 31, 2015, and QR Energy would owe a $64.875 million termination fee in specified cases such as taking a superior offer. Quantum fund holders and the management unitholders agreed to vote their units for the merger and not sell, and the Quantum services and omnibus agreements will be terminated at closing. The deal is not yet closed, so unitholders' conversion into Breitburn units is pending, not completed.

business combination

On July 24, 2014, QR Energy announced a definitive merger agreement with Breitburn Energy Partners LP, in which Breitburn will merge with QR Energy in a unit-for-unit exchange the press release values at about $3.0 billion including net debt and the Class C preferred units; QR Energy would become a wholly owned Breitburn subsidiary and get one seat on Breitburn's board. The same filing furnished preliminary second-quarter 2014 results: revenue $133.3 million, production 20,264 Boe/d, Adjusted EBITDA $69.6 million, distributable cash flow $34.9 million, and about $1,012 million of debt at June 30, 2014. This ends QR Energy's path as an independent company if the deal closes, subject to unitholder, SEC and other approvals.

business combination

On March 2-3, 2014, QR Energy bought 100% of its general partner, QRE GP, LLC, from QR Holdings (QRE), LLC and QR Energy Holdings, LLC, and ended the Management Incentive Fee (the fee that in March 2013 was partly paid in Class B Units). In exchange the sellers can receive up to 11,552,184 Class B units in up to four equal installments of 2,888,046, in any four of the six years starting 2014, only if the year's distributions are at least $0.4744 per unit each quarter, distribution coverage is at least 1.0, and debt to EBITDAX stays at or below 4.0 (unless the conflicts committee waives it). The filing states this is a change of control of the partnership. Separately, the company set up an at-the-market program to sell up to $100 million of common units through UBS, Credit Suisse and JonesTrading, and amended its credit agreement (Sixth Amendment) to permit the buyout; it also furnished fourth-quarter 2013 results and 2014 guidance, whose figures are cut off in the text provided.

capital raising announcement

On June 27, 2013, QR Energy agreed to buy predominantly oil properties in the Ark-La-Tex area for about $110 million from an undisclosed private seller, to be paid from cash on hand and credit facility borrowings, with closing expected in August 2013. The press release (company estimates) describes the properties as contiguous to its existing East Texas field holdings, with about 900 Boe/d of production and 6.0 million Boe of proved reserves, and says it expects an immediate boost to distributable cash flow; this is another acquisition following the December 2012 East Texas and Jay field purchases.

material agreement

On March 4, 2013, QR Energy issued 6,133,558 new Class B Units to its general partner after the general partner chose to take 80% of its fourth-quarter 2012 management incentive fee in units instead of cash; the fee falls to $0.7 million and the Class B Units get a $3.0 million distribution for the quarter. The Class B Units convert one-to-one into common units and carry the same distribution rights, so this modestly increases the unit count. The same filing furnished fourth-quarter 2012 results: net income $1.9 million, Adjusted EBITDA $71.1 million, distributable cash flow $39.3 million, a $0.4875 per unit distribution paid February 15, 2013, and $766 million of debt outstanding with $400 million undrawn.

capital raising announcement

On December 28, 2012, QR Energy bought oil properties in the Jay field (Florida Gulf Coast area) for about $145 million from entities in its sponsor's Quantum group, paid with cash on hand and credit facility borrowings. The sellers are related parties: affiliates of the sellers own the general partner and about 31.4% of the units, and the deal was approved by the general partner's board on the recommendation of an independent conflicts committee. The company's press release (company estimates) says it expects the deal to add to distributable cash flow immediately and describes about 2,500 Boe/d of current production, and this is a second acquisition within a month after the December 4 East Texas purchase; financial statements for the acquired assets are still to be filed.

asset acquisition disposition

On December 7, 2012, QR Energy agreed with a group of underwriters to sell 12,000,000 new common units at $16.24 each, and the underwriters then bought a further 1,800,000 units on December 10; closing was expected December 12. The press releases put net proceeds at about $214.9 million, to repay credit facility borrowings and for general corporate purposes, and the filing says affiliates of some underwriters are lenders under the facility and will receive substantially all the net proceeds. This repays part of the borrowing used for the December 4 East Texas purchase (a connection the filing does not state), and it adds to the number of units outstanding, spreading ownership across more units.

material agreement

On December 4, 2012, QR Energy closed the purchase of the Ark-La-Tex (East Texas field) oil properties agreed on October 26, 2012, at an adjusted price of about $214.3 million, funded with credit facility borrowings. This completes the deal announced in November and means the credit facility debt, partly repaid with the July notes proceeds, rises again. Financial statements for the acquired business will be filed later.

asset acquisition disposition

On October 26, 2012, QR Energy's operating subsidiary agreed to buy mainly oil properties in the Ark-La-Tex area from an undisclosed private seller for about $215 million, to be paid from cash on hand and credit facility borrowings, with closing expected in December 2012. The press release describes the properties as in the East Texas field, overlapping existing QRE properties, with current net production of about 1,400 Boe/d (90% oil) and estimated proved reserves of 10.7 million Boe; these are company estimates and it says the deal is expected to add to distributable cash flow.

material agreement

QR Energy and its finance subsidiary sold $300 million of 9.25% senior unsecured notes due August 2020 at 98.62% of par, for gross proceeds of $295.86 million, closing July 30, 2012. The press release says net proceeds of about $290.7 million will repay credit facility borrowings, and the credit facility's borrowing base fell from $730 million to $655 million as a result. The notes add fixed-rate long-term debt with restrictions on things like paying distributions, and the company must offer to exchange them for registered notes within a year.

debt financing

On April 20, 2012, QR Energy's operating subsidiary closed the purchase of mainly oil properties in the Ark-La-Tex area (small part in Michigan) from Prize Petroleum and Prize Pipeline for $226 million in cash. This completes the deal announced in March 2012 (the earlier filing said about $230 million). Financial statements for the acquired business are due later.

asset acquisition disposition

On April 11, 2012, QR Energy priced a public offering of 17.5 million common units at $19.18: 6,202,263 sold by the company and 11,297,737 by the Quantum selling unitholders, with the underwriters later exercising in full an option for 2,625,000 more units from the company. The company gets no proceeds from the Quantum sales. Its press release says it intends to use the net proceeds to repay credit facility borrowings (about $114.3 million, or about $162.6 million with the option). A third credit amendment, effective on closing of the Prize acquisition, raises lender commitments from $750 million to $1.5 billion and the borrowing base from $630 million to $730 million.

material agreement

On March 19, 2012, QR Energy's operating subsidiary agreed to buy mainly oil properties in the Ark-La-Tex area (with a small part in Michigan) from Prize Petroleum and Prize Pipeline for about $230 million, expected to close in April 2012. It plans to pay with cash and credit facility borrowings and has secured commitments for an extra $200 million of bank loans if needed. It also added oil price swaps for May 2012 through 2017, for example 850 barrels a day at an average $109.17 in 2012 and 1,580 barrels a day at $92.33 in 2017.

material agreement

QR Energy closed the Texas, Oklahoma and New Mexico acquisition from its Quantum fund affiliates on October 3, 2011. It assumed $227 million of debt, repaid with $234 million of credit facility borrowings (including $7 million of estimated fees), and issued 16,666,667 Class C Convertible Preferred Units paying a 4.0% coupon on $21.00 par for three years. The credit facility borrowing base was raised by $300 million to $630 million. Fund-affiliated entities now hold about 67% of the limited partner interest, and the sellers received registration rights for resales of the converted units. This completes the deal announced on September 12.

asset acquisition disposition

On September 12, 2011, QR Energy agreed to buy oil and gas properties in Texas, Oklahoma and New Mexico from its Quantum fund affiliates for about $234 million in cash (including $7 million of estimated fees) plus 16,666,667 new Class C Convertible Preferred Units with a $21.00 par value. The cash would come from its credit facility, with the borrowing base expected to rise by $300 million to $630 million. This is a related-party deal under the omnibus agreement, approved by the general partner's independent conflicts committee, and was expected to close around October 1, 2011.

capital raising announcement

QR Energy closed its IPO on December 22, 2010, selling 15,000,000 common units at $20.00 each for about $275.0 million net proceeds. It paired this with about $225 million of borrowings on a new $750 million, five-year credit facility (initial borrowing base about $300 million) to pay roughly $300 million to the Quantum fund and repay about $200 million of the fund's debt. It also signed an omnibus agreement giving it first rights on fund property sales and a services agreement with Quantum Resources Management (fee of 3.5% of Adjusted EBITDA through 2012). Fund affiliates own the general partner, about 47.5% of the common units and all the subordinated units.

asset acquisition disposition

the New York Stock Exchange certified QR Energy, LP's securities for listing, clearing them to begin trading.

listing compliance notice