Seeking Alpha

Eagle Rock Energy to suspend quarterly distribution

  • Eagle Rock Energy Partners (EROC) says it is suspending distributions in advance of closing the sale of its midstream business to Regency Energy Partners (RGP).
  • EROC says the FTC's request for additional information concerning the midstream sale has extended its original timeframe for closing the transaction and created the need to preserve greater liquidity in the interim to fund growth capex and other financial obligations.
  • EROC expects Q1 higher distributable cash flow than in Q4 2013, but says it may need to amend its credit facility if the sale does not close by the end of Q2.
Comments (4)
  • crl1603
    , contributor
    Comments (242) | Send Message
     
    anyone have any thoughts as to whether EROC can remain a viable operation if the regency deal does not go through, even without the distribution?
    23 Apr 2014, 07:59 PM Reply Like
  • Albert Alfonso
    , contributor
    Comments (2206) | Send Message
     
    EROC is toast without the Regency deal. It way overpaid for the midstream assets and now the loan covenants are getting breached. It might have to sell its more desirable upstream assets if the deal falls through.
    23 Apr 2014, 10:50 PM Reply Like
  • lasewoof
    , contributor
    Comments (10) | Send Message
     
    Anyone know what covenants exist in the Regency deal should Regency opt out of the deal or want to renegotiate the price?
    24 Apr 2014, 12:28 AM Reply Like
  • crl1603
    , contributor
    Comments (242) | Send Message
     
    i would have thought it's very likely that regency will seek to renegotiate,and if their stock drops surely it becomes harder to do any new accretive deals.
    24 Apr 2014, 01:05 AM Reply Like
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