Exploration & Production | General

Eagle Rock's Upstream, Midstream Ops Hampered by Winter Weather

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Eagle Rock Energy Partners has reported that its operating and financial performance in the fourth quarter of 2013 was impacted by severe winter weather in both its Midstream and Upstream Businesses.

The Partnership also incurred approximately $4.0 million of general and administrative expenses in connection with the recently announced execution of an agreement providing for the contribution of its Midstream Business to Regency Energy Partners LP for total consideration of up to $1.325 billion.

Based on preliminary financial results for the quarter ended December 31, 2013 (subject to the completion of the Partnership's quarter-end review), management expects to report Adjusted EBITDA and distribution coverage for the fourth quarter of 2013 well below the levels reported for the third quarter of 2013, due in large part to the adverse weather and non-recurring transaction expenses discussed above. Management further expects these factors to contribute to an increase in the Partnership's Total Leverage Ratio (as defined in its revolving credit facility agreement) relative to the prior quarter. Management expects the Partnership's liquidity position to improve upon the consummation of the contribution of its Midstream Business to Regency, which is expected to close in the first half of 2014, and its distribution coverage to improve upon the successful execution of organic and acquisition-related growth in its Upstream Business.