67 WALL STREET, New York - March 21, 2013 - The Wall Street Transcript has just published its Oil & Gas: Master Limited Partnerships Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Increasing Demand for Midstream Assets - U.S. Energy Infrastructure Build Out - Emerging Shale Plays - Oil and Gas Transportation Infrastructure Demand - Master Limited Partnerships Distribution Growth - Outlook for Natural Gas Liquids - Low Treasury Yields and MLP Dividends
Companies include: Eagle Rock Energy Partners, L.P (EROC) and many more.
In the following excerpt from the Oil & Gas: Master Limited Partnerships Report, the CEO and the SVP & CFO of Eagle Rock Energy Partners L.P. (EROC) discuss company strategy and the outlook for this vital segment of the oil and gas production chain:
TWST: How does the company minimize its exposure to what obviously can be a volatile commodity market?
Mr. Wood: That's a very important part of our overall strategy, and there's really two key points to that. The first is just on the operational side on the midstream. We have made a concerted effort to move our midstream contract mix more toward a fee-based model, and we've had a couple of big steps forward in that regard over 2012. First, with the acquisition of BP's midstream assets we entered into a long-term, 20-year strategic relationship with BP, where we will be the gatherer of all of their production around that existing system in the Panhandle, which is extensive, and all of those BP volumes will be gathered on a fee basis to us, so that obviously limits our direct commodity exposure. We had an existing contract with Anadarko Petroleum around our East Texas assets, and we restructured that contract from what's called a percentage-of-proceeds arrangement, where we do have direct commodity exposure, to a fee-based arrangement. We were very pleased to move more toward a fee-based model, which helps to stabilize our cash flows.
The second, of course, is hedging. As an MLP and as a company that is designed to pay out its cash flow, we do everything we can to stabilize that stream of cash flows, and so we are a very aggressive and consistent hedger of our commodity exposure, and we will hedge anywhere from three to five years out. For example, on both the oil and gas side we now have 80-plus percent of our 2013 - and almost that level on our 2014- expected volumes hedged.
TWST: You released your latest quarterly results earlier this week. What were the highlights?
Mr. Mills: We actually reported some very good numbers for the fourth quarter, including...
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.