- Investors love Eagle Rock's (EROC) plan to sell ~$1.3B of Texas Panhandle pipeline assets to Regency Energy Partners (RGP); it's "a great Christmas present for EROC unitholders," Robert Baird analyst Ethan Bellamy says.
- With increased capital and lower debt, EROC expects to be much more focused on mergers and acquisitions next year, CEO Joseph Mills said in a conference call.
- Meanwhile, RGP expects the deal will be accretive to cash flow and will recommend a 6%-8% increase in distributions this year.
- Energy Transfer Equity (ETE) plans to support RGP - which is part of the Energy Transfer family of MLPs - by committing to purchase $400M RGP units as part of the deal, and is the "real ultimate winner" of RGP's expansion and expectations for additional cash flow, the Baird analyst says.
- In today's trading, EROC finished +12.5%, RGP +7.7%, ETE +1.3%, ETP +2.4%.