EAGLE ROCK ENERGY PARTNERS L P

EAGLE ROCK ENERGY PARTNERS L P terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

EAGLE ROCK ENERGY PARTNERS L P's exchange filed to remove a class of its securities from listing.

listing compliance notice

The Vanguard merger closed on October 8, 2015: each Eagle Rock common unit was converted into 0.185 Vanguard common units (cash for fractions), and Eagle Rock became a wholly owned indirect Vanguard subsidiary. The Wells Fargo credit agreement was repaid and terminated, all directors and the listed officers (including Mills, Haines and Boettcher) resigned, Eagle Rock units were to stop trading on NASDAQ before the open on October 9 with delisting and a Form 15 to follow, and Eagle Rock and its general partner entities were then merged into Vanguard Operating, LLC and ceased to exist. This resolves the merger thread; the filing does not say how the 8 3/8% notes with $51.1M outstanding were handled.

business combination

Eagle Rock filed its definitive joint proxy statement for the Vanguard merger, dated September 3 and first mailed about September 4, 2015. Each Eagle Rock unit would convert into 0.185 Vanguard units (a fixed ratio, stated as a 24.5% premium to the May 21, 2015 close), and the filing says Eagle Rock holders would own about 24.9% of Vanguard, or about 22.0% if Vanguard's separate LRR Energy deal also completes. Both companies' unitholder meetings are set for October 5, 2015; Eagle Rock's board unanimously recommends voting for the merger and for the merger-related pay proposal. This continues the merger thread and confirms the terms from May; the vote had not yet happened.

business combination

On May 21, 2015 Eagle Rock agreed to merge with Vanguard Natural Resources: each Eagle Rock common unit would convert into 0.185 Vanguard common units (cash for fractions), and Eagle Rock would become a wholly owned indirect subsidiary of Vanguard. Closing needs approval by both companies' unitholders, an effective S-4 registration, and NASDAQ listing of the new units, with an outside date of January 31, 2016. Eagle Rock owes a $20 million termination fee in specified cases (e.g. taking a superior proposal), and Vanguard owes $20 million if its own unitholders vote the issuance down. The NGP-related holders, who held about a third of the units per the September 2014 filing, agreed to vote for the deal. This is a new thread that would end current unitholders' positions in Eagle Rock if completed, but it is not yet closed.

business combination

On October 10, 2014 Eagle Rock signed a Fifth Amendment to its credit agreement with Wells Fargo and other lenders, extending maturity from June 2016 to October 2019 and converting it to a reserve-based facility with $320 million of commitments (expandable up to $1.2 billion) and a $320 million initial borrowing base. Total leverage is capped at 4.0x (4.5x for two periods after an acquisition above $50 million), the senior secured leverage and interest coverage tests are removed, and fees improve by 25 basis points. The Regency units received in July are excluded from the lenders' collateral. This continues the covenant thread and replaces the Fourth Amendment limits (4.75x/4.50x) that were due to tighten after Q3 2014; the next borrowing base redetermination is April 1, 2015. The filing does not say how much is drawn.

debt financing

On July 1, 2014 Eagle Rock closed the contribution of its midstream business to Regency Energy Partners, receiving $576.2 million cash, 8,245,859 Regency common units, and Regency 8.375% notes due 2019 swapped for $498.9 million face amount of Eagle Rock's notes. The filing text gives two figures for exchanged notes ($489.9 million and $498.9 million) alongside $51.1 million left outstanding; the numbers do not fully reconcile. The remaining notes lose substantially all restrictive covenants and certain default events under a Third Supplemental Indenture, and the exchanged notes are cancelled. This resolves the Regency transaction announced earlier; unitholders keep their units, but the company no longer holds the midstream assets built up since 2012.

asset acquisition disposition

On May 28, 2014 a Fourth Amendment to the credit agreement kept the 5.85x total leverage and 3.40x senior secured limits for Q2 2014 only, cut the upstream component from $380 million to $330 million, set a new midstream component of about $489.2 million, and reduced total commitments to $819,165,178. Lenders also confirmed that debt assumed by Regency in the pending midstream contribution counts as cash for the asset-sale restrictions, and the agent will release liens on the contributed entities at closing. This continues the covenant-relief thread and clears the path for the Regency deal.

material agreement

A Third Amendment to the credit agreement, effective February 26, 2014, lifts the maximum total leverage ratio to 5.85x for Q1 2014 only and the senior secured limit to 3.40x, fixes the upstream borrowing component at $380 million and postpones its redetermination, and a fee was paid to lenders. The filing also discloses a previously announced plan to contribute the midstream business to Regency Energy Partners, expected to close in Q2 2014 subject to regulatory and unitholder approvals; a preliminary proxy was filed January 31, 2014. Eagle Rock says cash proceeds will pay down the revolver and Regency will run an exchange offer for the full $550 million of senior notes, and it expects total debt to fall by over $1 billion if all notes are exchanged, leaving a pure-play upstream MLP. This is a major new thread that changes the company's direction from the midstream-heavy business built up in 2012-13.

debt financing

On July 23, 2013 the lenders signed a Second Amendment to the credit agreement, effective June 30, 2013, raising the maximum total leverage ratio from 4.75x to 5.50x (stepping down to 4.50x by Dec 31, 2014) and the senior secured limit from 2.85x to 3.15x (ending after Q3 2014). This is a second loosening of debt limits after the December 2012 amendment; the filing does not give a reason (inference: the company needed more room under the limits). The same filing announces a $0.22 per unit distribution for the quarter ended June 30, 2013, payable August 14, 2013 to holders of record August 7.

debt financing

EAGLE ROCK ENERGY PARTNERS L P's exchange filed to remove a class of its securities from listing.

listing compliance notice

On March 13, 2013 Eagle Rock agreed to sell 10,350,000 common units to the public at $9.31 each, including 1,350,000 from the underwriters' full over-allotment option. The offering closed March 18, 2013, with net proceeds of about $92.2 million.

material agreement

On December 28, 2012 the lenders raised total commitments under Eagle Rock's credit facility from $675 million to $820 million, adding Whitney Bank to the group. The First Amendment temporarily loosens the maximum total leverage ratio from 4.50x to 4.75x and adds a new Senior Secured Leverage Ratio limit of 2.85x, both through the third quarter of 2013, and doubles the permitted other-investments basket from $25 million to $50 million. This follows the revolver-funded BP acquisition; the filing does not say the step-up was needed because of it (inference only).

debt financing

On October 3, 2012 Eagle Rock's operating subsidiary amended its Brookeland gas gathering and processing agreement with Anadarko, effective April 1, 2012. Anadarko must now also deliver gas from an additional roughly 800,000-acre, 10-year dedication in Louisiana, and new wells spud on or after April 1, 2012 move to a fixed gathering fee instead of a commodity-price-sensitive processing fee. Financial terms are partly redacted, so the dollar impact is not stated.

material agreement

Eagle Rock, through its subsidiary Eagle Rock Field Services, completed the BP acquisition of the two Texas Panhandle gas plants and gathering system on October 1, 2012 for about $230.6 million in cash (including the roughly $23 million deposit), funded with borrowings under its revolving credit facility. At closing it signed a 20-year fixed-fee Gas Gathering and Processing Agreement with BP covering BP's production from the connected wells and certain future wells. This resolves the pending BP deal; the filing says the purchase was funded from the revolver, while the August equity raise was earlier stated as meant for part of the price.

asset acquisition disposition

Eagle Rock sold 10,120,000 new common units to the public at $8.72 each (including 1,320,000 from the underwriters' full over-allotment option), closing August 17, 2012, for net proceeds of about $84.5 million. The press release says the money is meant to fund part of the BP acquisition, with interim use to repay credit facility borrowings, and general partnership purposes if the deal does not close. The new units dilute existing unitholders; this is separate from the $100 million at-the-market program, and the filing does not say that program was used.

material agreement

On August 10, 2012 Eagle Rock agreed to buy two BP gas processing plants (Sunray and Hemphill, about 220 MMcf/d combined capacity) and a connected gathering system in the Texas Panhandle for about $227.5 million in cash, subject to adjustments, and paid a deposit of about $23 million. The assets sit next to its existing Panhandle midstream assets; closing is expected October 1, 2012, subject to conditions including antitrust (HSR) clearance, and the deposit is forfeited if Eagle Rock terminates, with limited exceptions. This is a new acquisition thread; the filing text provided is truncated, so how it will be funded is not shown here.

material agreement

On July 10, 2012 Eagle Rock agreed to sell an additional $250 million of its 8 3/8% senior notes due 2019 at 96.751% of par, for net proceeds of about $241.6 million, closing July 13, 2012 and used to repay borrowings under its credit facility. The new notes are treated as one class with the $300 million issued in May 2011, bringing the total to $550 million (inference: sum of the two issues). A new registration rights agreement requires an exchange offer within 300 days of July 13, 2012, or 1% additional interest.

debt financing

On May 30, 2012, Eagle Rock signed equity distribution agreements with UBS Securities and Knight Capital Americas, allowing it to sell common units with an aggregate offering price of up to $100 million from time to time through them at market prices. Any sales would add new units and could dilute existing holders; the filing does not say how many units, if any, will be sold or what the proceeds would be used for.

material agreement

The warrant program ended on May 15, 2012: 2,140,964 warrants were exercised for new common units, bringing in about $12.8 million, and 407,117 expired unexercised. This includes 273,484 warrants exercised by Montierra Minerals & Production, an NGP affiliate, for $1,640,904; the filing notes CEO Joseph Mills is also CEO and a manager of Montierra's general partner. This resolves the open thread on the June 2010 warrants.

capital raising announcement

On March 15, 2012, entities affiliated with Eagle Rock Holdings and Natural Gas Partners exercised 200,000 warrants for $1,200,000, and the partnership issued the same number of common units. The attached press release says 3,159,624 warrants in total were exercised that day for about $19.0 million, which the partnership intends to use to repay revolving credit facility borrowings, leaving 2,548,081 warrants outstanding. The final exercise date is May 15, 2012, after which unexercised warrants expire.

capital raising announcement

On August 15, 2011 NGP-affiliated parties exercised warrants for 5,390,384 common units at a total exercise price of about $32.3 million; the warrants dated from the June 2010 rights offering. This figure was corrected the next day's amendment (see the 8-K/A), so it should not be relied on. The new units add to the units outstanding and bring cash to the partnership.

capital raising announcement

On June 22, 2011 Eagle Rock replaced its $800 million credit agreement (which was due Dec 2012) with a new five-year facility maturing June 22, 2016, with initial commitments and an initial borrowing base of $675 million, expandable to $1.2 billion on request. It is secured by substantially all material assets, and interest is LIBOR plus 1.75% to 2.75%. Covenants include a total leverage ratio no higher than 4.50x (previously a 3.75x senior secured leverage limit in the context) and interest coverage of at least 2.50x. The company also restructured some hedges, with termination costs of about $4.8 million (oil swaps) and $5.0 million (interest rate swaps) and about $14.6 million on novated commodity hedges. This extends the debt maturity beyond the Dec 2012 date in the earlier facility and supersedes the $405 million borrowing base set at the Crow Creek closing.

debt financing

On May 24, 2011 Eagle Rock agreed to sell $300 million of 8 3/8% senior notes due June 1, 2019 to initial purchasers (Wells Fargo, Merrill Lynch, BNP Paribas, RBS). The sale closed May 27, 2011 at 96.779% of par, for net proceeds of about $289.2 million, used to repay borrowings under its credit facility. The notes are unsecured, rank behind the secured credit facility, and are guaranteed by the partnership's subsidiaries; the partnership agreed to offer registered exchange notes within 400 days. This is the first bond issue in the filings we have and pays down the revolver drawn for Crow Creek (inference: that revolver use is the context; the filing only says the credit facility was repaid).

debt financing

Eagle Rock completed the Crow Creek acquisition on May 3, 2011, paying about $15 million cash, 28,753,174 new common units at a negotiated $10.50 each, and taking on about $213 million of debt, which it repaid from its revolver. The revolver's borrowing base rose from $160 million to $405 million. NGP VIII must vote its new units in proportion to other unitholders' votes on most matters and received registration rights for resale of its units and warrants. NGP can appoint three directors of the general partner's board. This resolves the acquisition announced April 12, 2011.

asset acquisition disposition

On April 12, 2011, Eagle Rock agreed to buy Crow Creek Energy (oil and gas reserves in Oklahoma, Texas and Arkansas) from a portfolio company of NGP VIII, which is NGP's fund and the partnership's largest unitholder, for about $525 million: about $15 million cash, about $303 million in new common units and about $207 million of assumed debt. The units issued would be between 28,857,143 and 40,400,000, depending on the trading price (floor $7.50, ceiling $10.50), which would dilute existing unitholders. The cash and debt repayment would be funded from the revolver, whose borrowing base lenders intend to raise from $160 million to $405 million. Closing was expected around May 3, 2011, and the agreement can be terminated if it has not closed by May 31, 2011. This is a deal with the controlling shareholder, and it follows the May 2010 recapitalization.

capital raising announcement

EAGLE ROCK ENERGY PARTNERS L P's exchange filed to remove a class of its securities from listing.

listing compliance notice

Nasdaq certified EAGLE ROCK ENERGY PARTNERS L P's securities for listing, clearing them to begin trading.

listing compliance notice

The recapitalization closed on May 24, 2010: the minerals business (fee mineral and royalty interests plus the Ivory Working Interests stake) was sold to Black Stone Minerals for $171.6 million cash, down from the $174.5 million agreed in December 2009 after price adjustments, with further true-ups possible. NGP's Eagle Rock Holdings handed over all 20,691,495 subordinated units and all incentive distribution rights, which were cancelled, and received 4,825,211 new common units as the $29 million fee. Unitholders approved the deal on May 21, 2010. NGP parties will buy 5,029,472 common units for $12,573,680 through the rights offering. The partnership can buy its general partner for 1,000,000 units, after which public unitholders would elect a majority of the board; the conflicts committee said it will do so once it finds two more independent directors. This resolves the vote and minerals-sale threads and continues the GP-option thread.

asset acquisition disposition

The Conflicts Committee confirmed the $29 million transaction fee to ERH will be paid in 4,825,211 new common units, at $6.0101 per unit (90% of the 10-day weighted average price as of April 24, 2010). The units are issued only if unitholders approve and the minerals sale closes. The special meeting is set for May 14, 2010, with the minerals sale expected to close on or before May 25, 2010. This continues the recapitalization thread by fixing the fee form and unit count.

capital raising announcement

Eagle Rock amended its December 2007 credit agreement on March 8, 2010 so that exercising the option to buy the general partner would not count as a change of control, if unitholders approve the recapitalization before July 31, 2010. In exchange, the maximum senior secured leverage ratio drops from 4.25x to 3.75x, and $100 million of the minerals sale proceeds must repay the revolver, cutting total commitments to $871 million. The filing says current availability is not affected. This continues the recapitalization and minerals sale threads and ties them to the lenders.

debt financing

The recapitalization agreement was amended and restated, changing only how the $29 million fee to NGP's affiliate ERH is paid. It is now paid in common units at the greater of $3.10 or 90% of a trailing 10-day average price, unless the Conflicts Committee chooses cash at least 20 days before the unitholder meeting. If units are issued they come before the rights offering record date, and NGP agrees to exercise the rights on them. The filing says other terms are not materially changed. This continues the December 2009 recapitalization thread, and the new formula could mean more units than $3.10 would have given.

material agreement

Eagle Rock agreed to sell its fee mineral and royalty business (the Minerals Business) to Black Stone Minerals for $174.5 million cash. It also signed a recapitalization agreement with its controlling holder, Natural Gas Partners (NGP): a rights offering at $2.50 per right (each giving a common unit plus a two-year $6.00 warrant), elimination of the incentive distribution rights and subordinated units, a $29 million fee to NGP's affiliate ERH, and an option to buy the general partner for 1,000,000 units. Everything needs approval from the unaffiliated unitholders, and is conditioned on the minerals sale. This is a new thread and moves away from the upstream and minerals buildup of 2007-2008, with the Conflicts Committee approving it.

material agreement

Eagle Rock completed the Millennium Midstream Partners acquisition on October 1, 2008 for about $235.5 million: roughly $180.5 million cash plus 4,000,000 new common units (about $55 million, at $13.75 each). $176.4 million was borrowed on the revolver on September 29, using part of the $180 million accordion expansion. The purchase agreement was amended to make any Hurricane Ike damages a retained obligation of MMP and the Sellers. This resolves the pending MMP deal; the press release also says the company bought crude oil put options for 2009 and 2010 to hedge liquids exposure at the two Louisiana plants.

asset acquisition disposition

On September 11, 2008 Eagle Rock agreed to buy Millennium Midstream Partners for $236 million: $181 million cash from its revolver plus 4,000,000 units (valued at $13.75 each in the press release). Closing is expected in October 2008, subject to antitrust waiting periods and other conditions, with an October 31, 2008 end date. MMP has gas gathering lines in East, Central and West Texas plus minority stakes in two Louisiana processing plants. The company expects about $29.2 million of added annual Adjusted EBITDA in 2009 and calls the deal immediately accretive, which are management's statements. The new units will be privately placed. It adds to the 2007-2008 acquisition run.

capital raising announcement

On April 2, 2008 Eagle Rock agreed to buy Stanolind Oil and Gas Corp., which has Permian Basin oil and gas properties in Texas, for $79 million cash, with closing expected April 30, 2008. The filing cites an estimated 290 producing wells, 850 Boe/d of net production and 6.7 MMBoe of proved reserves, and expects about $15.3 million of annual adjusted EBITDA. The seller is owned mostly by NGP funds that also control Eagle Rock's general partner, so the independent Conflicts Committee reviewed the deal and found it fair to public unitholders. Funding is from cash from operations and the existing revolver. This continues the upstream expansion and the NGP conflict-of-interest thread.

material agreement

On December 13, 2007 Eagle Rock replaced its $600 million credit facility (Goldman Sachs Credit Partners as agent, due August 31, 2011) with a new $800 million facility led by Wachovia Bank, due December 13, 2012. Initial availability is $724 million under its covenants, it can be raised to $1 billion, and it is secured by liens on substantially all assets. Interest is LIBOR plus 1.25% to 2.00%. Borrowings at the start were used to repay the old facility, with no increase in debt outstanding and no early termination penalty. This fills the earlier gap on debt facility details.

debt financing

Eagle Rock said it will restate its second-quarter 2007 results because revenue and cost of goods sold were both overstated by about $25.6 million. The errors came from the subsidiaries acquired from Laser in the spring of 2007 and affect only the South Texas segment. The filing says margins, net income/loss, cash flows, members' equity, Adjusted EBITDA, Segment Profit and the balance sheet are unaffected, and that the earlier second-quarter statements should no longer be relied on. A 10-Q/A will be filed as soon as possible.

financial restatement

On July 31, 2007 Eagle Rock closed both deals announced July 11: Escambia for $240.5 million ($224.0 million cash plus 689,857 units) and Redman for $189.7 million ($83.8 million cash plus 4,428,333 units). Both prices were higher than the figures first announced, which the filing attributes to working capital adjustments. It also sold 9,230,770 units at $22.10 each for about $204 million to partly fund the cash. Financial statements for the acquisitions were promised in a later amendment.

asset acquisition disposition

Eagle Rock signed deals to buy Escambia Asset Co. (Alabama wells and gas plants) for about $220 million and the Redman companies (mainly East and South Texas wells) for $180 million. Redman is owned by Natural Gas Partners funds, which own a majority of Eagle Rock, so a conflicts committee approved it. A private placement of 9,230,770 units for about $204 million is conditioned on both closing. This continues the 2007 acquisition spree, with the company stating expected annual adjusted EBITDA of $58.1 million for Escambia and $24.8 million for Redman.

material agreement

Eagle Rock closed the Montierra purchase on April 30, 2007 for $127.4 million (6,390,400 units plus $6 million cash) and the Laser purchase on May 3 for $136.8 million. It also closed the private sale of 7,005,495 units at $18.20 each for $127.5 million. Natural Gas Partners funds own a majority of both Eagle Rock and Montierra, so an independent conflicts committee reviewed and approved the Montierra deal as fair. Montierra's chief executive, Joseph Mills, became Chairman and CEO of the general partner's operating arm, and Alex Bucher moved from CEO to President and COO. The filing says the Montierra deal adds oil and gas commodity-price exposure to a mainly midstream business.

asset acquisition disposition

Eagle Rock agreed to buy Laser Midstream's gathering systems (over 405 miles in South Texas, East Texas and North Louisiana) for about $136.8 million ($110 million cash plus 1,407,895 units). It also agreed to buy mineral, royalty and working-interest properties from Montierra and NGP-VII for about $127.6 million (6,400,000 units plus $6 million cash). A $127.5 million private placement of 7,005,495 units is to fund the Laser cash. Both deals were still awaiting closing, and the attached press release reported a 2006 net loss of $23.3 million on revenue of $478.4 million.

material agreement