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Eagle Rock Energy Partners, L.P. Message Board

  • busy26795 busy26795 Dec 26, 2013 6:27 PM Flag

    Best answer to you Liz

    "Liz, you don't even know what you are talking about... Upstreams build out midstream because no one else will do it for them. Devon exploded when it formed a JV midstream MLP with XTEX. In that case Devon plans on having the new MLP to be its midstream build out asset without having to consume its own working capital.

    Reading between the lines, it appears EROC plans to have RGP be its captive MLP with respect to as much of its future midstream build out as possible. Anadarko does this with WES.

    EROC may not have only turned the corner in terms of balance sheet strength no one appears to be discussing this issue of having more working capital for E&P if it no longer engages in building out its own midstream."

    Sentiment: Strong Buy

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    • "EROC plans to have RGP be its captive MLP"

      Captive? RGP is several times larger than EROC, that makes zero sense. EROC's equity ownership is less than 10%, and I assume they'll dump it at some point, it was probably just something to grease the deal.

    • Sure Liza knew what its all about, But as a basher, no truth would be told. Only phony opinions & twisted facts could be heard from a basher. Always beware.

      Sentiment: Strong Buy

    • It can't be the best answer as it is not an answer to anything I have posted and is not even relevant to EROC.

      EROC did not primarily build out their midstream assets to support their upstream and they also did not divest them for those reasons (they were forced to sell something by the banks and the midstream was probably easier for them to sell than the upstream assets). It's also not even true about most upstreams building out midstream if we are talking in the context of MLPs. Sure, it applies to the big integrated companies but name another E&P MLP other than EROC which has significant midstream assets. There aren't any.

      So the above was an apropos comment which has some applicability to other companies but not for EROC and so not relevant to anything I had posted.

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