Everyone wins in Eagle Rock-Regency pipeline deal, but Energy Transfer could be "ultimate winner"

|About: Eagle Rock Energy Partners,... (EROC)|By:, SA News Editor

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%.