Past year: ▼ 49%(1.27 – 3.39 USD)
Each one in plain English, with the numbers worked through for a shareholder.
23 Aug 2011material agreement● Neutral
On August 18, 2011 Eagle Rock's subsidiary amended its NGL exchange agreement with ONEOK Hydrocarbon (dated Dec 2005, previously amended Dec 2010). The amendment lowers the maximum NGL volume from the West Plants and raises it from the East Plants by a matching amount, and increases the volume from one Dedicated Plant with a higher Base Exchange Differential on that added volume. Financial terms are redacted, so the dollar effect is not stated.
18 Aug 2011capital raising announcement● Neutral
This amendment corrects the August 16 filing: the NGP Parties exercised 3,975,362 warrants (not 5,390,384) on August 15, 2011, for an aggregate exercise price of about $23.9 million (not $32.3 million). The common units issued equal the warrants exercised. It supersedes the earlier numbers; the warrants came from the June 2010 rights offering.
17 Aug 2011capital raising announcement● NeutralMajor
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.
23 June 2011debt financing▲ GoodMajor
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.
27 May 2011debt financing● NeutralMajor
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).
17 May 2011asset acquisition disposition● Neutral
This amendment to the May 3, 2011 filing adds the Crow Creek historical financial statements (audited for 2008-2010 and unaudited for the first quarter of 2011 and 2010), pro forma financial information for the partnership, and extra pro forma data including pro forma Adjusted EBITDA. The text of the filing does not state any figures. It is filed to supply financial statements that were not included originally.
3 May 2011asset acquisition disposition● NeutralMajor
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.
13 Apr 2011capital raising announcement● NeutralMajor
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.
23 Mar 2011auditor change● Neutral
On March 18, 2011 the audit committee replaced Deloitte & Touche with KPMG as auditor for fiscal 2011. The filing says Deloitte's reports in the last two years had no adverse opinions and there were no disagreements or reportable events with Deloitte.
9 Dec 2010material agreement● Neutral
On December 3, 2010, Eagle Rock amended its 2005 agreement with ONEOK Hydrocarbon under which it sends natural gas liquids from certain Texas Panhandle plants to ONEOK for transport and fractionation. The amendment extends the term, increases Eagle Rock's volume commitment and the transport exchange fees, and makes the additional volumes take-or-pay. The filing does not state the new term or dollar amounts, as portions are redacted under a confidential treatment request.
30 June 2010listing compliance notice● NeutralMajor
EAGLE ROCK ENERGY PARTNERS L P's exchange filed to remove a class of its securities from listing.
14 June 2010listing compliance notice▲ GoodMajor
Nasdaq certified EAGLE ROCK ENERGY PARTNERS L P's securities for listing, clearing them to begin trading.
25 May 2010asset acquisition disposition● NeutralMajor
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.
27 Apr 2010capital raising announcement● NeutralMajor
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.
What it means for a shareholder
4.8m new shares at $6.01 to raise about $29.0m. Shares on issue before the raise aren't in the record, so the dilution can't be worked out.
Create a free account to see this worked out for your own holding.
9 Mar 2010debt financing● NeutralMajor
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.
12 Jan 2010material agreement● NeutralMajor
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.
21 Dec 2009material agreement● NeutralMajor
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.
1 Oct 2008asset acquisition disposition● NeutralMajor
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.
16 Sept 2008capital raising announcement▲ GoodMajor
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.
4 Apr 2008material agreement● NeutralMajor
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.
13 Dec 2007debt financing▲ GoodMajor
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.
2 Nov 2007asset acquisition disposition▼ Bad
Eagle Rock refiled the Laser financial statements it had supplied on October 11, 2007, correcting the same kind of error behind the October 25 restatement. For the three months to March 31, 2007, Laser's gas sales revenue and cost of gas were overstated by $11,182,897, with no effect on net income. It also reissued the pro forma figures and said an amended 10-Q for the June 2007 quarter is being filed alongside. This continues the restatement thread.
26 Oct 2007financial restatement▼ BadMajor
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.
11 Oct 2007asset acquisition disposition● Neutral
This amendment supplies the financial statements and pro forma figures that the August 2007 filing promised for the Escambia and Redman acquisitions. It also includes statements for Laser Midstream, bought in the spring. It adds no new transaction or terms, and the filing text shown does not state the figures.
6 Aug 2007asset acquisition disposition● NeutralMajor
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.
17 July 2007material agreement● NeutralMajor
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.
4 May 2007asset acquisition disposition● NeutralMajor
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.
4 Apr 2007material agreement● NeutralMajor
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.
14 Feb 2007material agreement● Neutral
Joan Schnepp, who had resigned as an executive vice president and director of the general partner's operating arm (announced in January 2007), signed a separation agreement. She gets $300,000 (18 months of base salary) paid through March 15, 2008, plus health coverage until March 10, 2008 at the latest, and will consult for 18 months. The agreement includes mutual claim releases and a non-solicitation of employees through July 31, 2008.
