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Eagle Rock Energy Partners, L.P Message Board

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  • youcanpickum youcanpickum Nov 9, 2009 2:48 PM Flag

    One third of the goal, which should be forgotten

    From Barclays:

    Investment Conclusion
    EROC posted another quarter of better than
    expected results driven by favorable commodity
    prices. On the other hand, leverage ratio and
    liquidity position were worse than expected.
    Leverage ratio reached 4.75x vs 5.0x covenant
    limit. EROC had $45 mm of liquidity at the end of
    Q3 including $35 mm available from its revolver
    capacity. While we are concerned with leverage
    and liquidity going forward, we believe a timely
    completion of asset sales/recapitalization
    transaction will allow EROC to immediately fix its
    balance sheet and grow distribution from its
    current levels of $0.10/year. We are maintaining
    our distribution estimates based on our
    assumption that recapitalization and asset sales
    transaction completes by early 2010.
    􀂉 EROC reported EBITDA of $51.3 mm and DCF of
    $36.6 mm above guidance. Midstream EBITDA
    rose 27% QoQ despite 4.8% of volume decline,
    due to strong commodity price improvement.
    Made progress on debt paydown reaching $30
    mm in Q3 and $63 mm since Q1.
    􀂉 We maintain PT of $6 based on distribution
    assumption of $0.57/$0.85 (assuming 1.3x
    coverage) in 2010/2011 and target yield of 12%.

1.740.00(0.00%)Oct 8 3:59 PMEDT