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Eagle Rock Energy Partners, L.P. Message Board

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  • quantuon quantuon May 24, 2012 4:15 PM Flag

    What are the thoughts here?

    the bottom line is they are spending (capex and divs) 30mn a quarter more than they make. I find it strange that they plan on increasing dividend in this environment. The market clearly is not calling for it given where it yields today - if anything, the market is pricing for a cut. If the revolver balance was lower, I wouldn't mind. There are no more warrants to cash in and I'm not sure a debt deal is feasible in today's environment. I could see a preferred convert private maybe....

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    • They are giving a presentation at an MLP conf. in a couple of days. I'll listen to the recording. See if they hint at expectations. Prudent plan would be to under promise and over deliver. Cutting the distribution in the face of a market that expects an increase will kill the PPS, will likely to below 8. The idea behind an MLP is to grow the distribution and protect DCF with hedges and sound business strategy. Of course, you could be right. We'll see.

 
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