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Eagle Rock Energy Partners, L.P Message Board

  • rotasenal rotasenal Sep 29, 2009 4:57 AM Flag

    Very Dissapointed with NGP

    I am new to the forum to express my dissapointment with the deal NGP, the apparently single owner of the company is propposing to the apparently unnexisting mimority holders in EROC. That is why after a successful month as shareholder or whatever you want to call it for a partnership, I sold all yesterday.

    I entered in this company because of the arrearages expecting good dividends in due time. Now NGP pretends to quit this ovbious bad deal for them at the minority holders expense, and on top of that they want to charge 35M in fees, in my oppinion it is inmoral.
    Typical of swred VCs. If they would have been worried on the minority shareholders they would have renegociated with the banks an early payment and issue more stock to pay for it, that way we would have been much better off. I will reconsider buying again below 3.0, and with such dilution don't get fooled by warrant promises and huge upside expectations, think on the ammount of debt the company continues to have.

    The sale of the minerals business is inmoral also, how can you buy it for less being a related party??? How can you pretend that the management sells it for more in 60 days!?Why don't you just buy it and grant a put to EROC . . .Tough job for the management and the conflict of interest commette . . . or shall I say easy?

    ... good luck anyhow to the rest of you and pray all for the natural gas to go up.

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    • I thought EROC was primarily a pipeline/midstream company that just happened to have some mineral leases. Dump the mineral leases and stick just with the transportation and storage of NG and oil. You always get money for hauling even if oil and nat gas is in the dumper.

    • To all the rest of the unit holders who are not happy with the NGP proposal, do as I did and contact the conflicts committee and let them know you oppose the plan. Since the independent unit holders need to vote to approve the plan, the more opposition the committee sees the less likely they will be to recommend that the proposal proceeds to a vote.

      So stop complaining and instead send a message to the committee.

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    • I don't think NG going up is going to have a huge positive impact on EROC. Especially if we divest our commodity exposure vis a vie the minerals business, and going forward perhaps the upstream business itself?

      I agree that some long term shareholder value is being destroyed if this deal goes through, however that doesn't mean the units are overpriced at these levels. EROC is already deeply undervalued, and will remain undervalued (to a lesser extent) after this re-organization.

      I think that even though the valuation will take a bit of a hit, the inherent risk of an investment in EROC should diminish as the partnership is recapitalized. It seems reasonable that these still undervalued partnership units will garner a significantly smaller risk premium, which should lead to multiple expansion (hopefully this will offset the decrease in FCF/E due to the large increase in equity, and the divestment of the minerals bus.)

      For some reason I've known a lot of "value" investors that are far more prone to buy a company that is cheap compared to cash flow if it's not overleveraged, but stay far away from companies that are VERY cheap with lots of leverage.

      If all else was equal I'd rather wait this out, and deleverage the painful way. However, EROC is such a large position for me that I think my portfolio will be SAFER when this position is financed more safely and begins cashflowing (to me) in the short-intermediate term.

      It all boils down to the fact that I still think EROC is going to be a better deal than 95% of the investments out there even with this deal which is dilutive to cashflow.

    • I was just thinking of how bad of a deal this is for common
      share holders. When is the vote ?

      NGP is trying to make money off this why else would they buy
      Is EROC in financial meltdown and needs to sell importaint assets for cheap. IS management lying about the financial
      aspects of the company ...?
      so many questions

1.740.00(0.00%)Oct 8 3:59 PMEDT