Quick Win by the Algorithm: Breitburn Energy Partners LP (BBEP)

Quick Win by the Algorithm

Breitburn Energy Partners LP

On May 15th, 2016, the I Know First algorithm gave a bearish signal of -308.39 for the ticker BBEP with a predictability indicator of 0.16. In accordance with the algorithm’s prediction, BBEP dropped 70.95% in the following three days.

Quick Win by the Algorithm BBEP

Breitburn Energy Partners LP (BBEP) is an independent oil and gas master limited partnership (MLP) focused on the acquisition, exploitation, development and production of oil and gas properties in the United States. An MLP is a resource-focused publicly traded partnership that brings together the tax benefits of a partnership with the liquidity of a public company.

Breitburn Energy Partners LP (BBEP) tumbled -70.95% on news that the company filed for Chapbankruptcycruptcy protection on Monday, May 16th. The company is negotiating with debt holders but it is quite certain that the value of common equity will go to 0.

Breitburn, as the whole oil industry, has been struggling with the collapse of oil prices in late 2014 and its sales revenue decreased 22% between 2014 and 2015. The mild recent recovery in the price of crude has proven to be too little too late as its 2015 full year income statement was hit with a $2.3 billion impairment loss of its oil and natural gas properties which resulted in a $2.5 billion net loss, making its current level of debt burden unsustainable.

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