Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: BreitBurn Energy Partners L.P.'s (OTC:BBEPQ) unit price surged just about 20% in April. The company didn't put out a single new release, nor was the surge in price driven by analyst upgrades or an activist investor. Instead, BreitBurn's move was solely fueled by strong oil prices, as we see in the chart below.
So what: Given the fact that BreitBun is the largest oil-weighted MLP in America, the oil price movement was bound to have an impact on the unit price. In fact, when oil prices turned south last year they took BreitBurn right down with them. Now that oil prices are recovering, BreitBurn's unit price is as well.
That being said, there was another positive development that took place right at the end of March that also helped to fuel BreitBurn's rise in April: the announcement that it had secured a $1 billion cash infusion from EIG Global Energy Partners, a deal it closed in early April. That cash infusion eliminated any near-term liquidity concerns, as it enabled the company to pay down its credit facility and then lock in its borrowing base with its banks through April of 2016, leaving BreitBurn with about $500 million in liquidity for the next year.
Now what: With oil prices heading higher and BreitBurn's liquidity concerns off the table for the next year, some investor angst has been removed. Looking ahead, even more worries about its future could be eliminated when it reports first-quarter results Tuesday morning. A stronger than expected report could send units soaring.