BAKERSFIELD, Calif. (AP) - Berry Petroleum Co. became the latest oil and gas
company to halt plans for a master limited partnership (MLP) on Thursday due to
"unfavorable capital market conditions."
The company said in October it would spin off some of its oil and natural
gas properties creating an MLP through an initial public offering. However, a
jittery market full of investors worried about the deteriorating housing and
credit markets have lessened the attractiveness of such ventures.
Berry's Fort Worth, Texas-based peer XTO Energy Inc. said Tuesday it will
not pursue the MLP it considered for certain assets because of "uncertainty in
the financial markets." Petrohawk Energy Corp. said in January it will delay its
MLP, as did Exco Resources Inc.
Berry Chief Financial Officer Ralph Goehring said the MLP is "currently on
hold due to unfavorable capital market conditions," but that the company will
continue to monitor the potential of an MLP.
A master limited partnership has the tax benefits of a limited partnership
and the liquidity of a publicly traded company. Almost all of its cash flows
must come from real estate, natural resources or commodities.
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