Regency Energy Partners Closes on Acquisition of Midstream Business of Eagle Rock Energy Partners, L.P.

abarrelfullabarrelfull wrote on 05 Jul 2014 07:00
Tags: n-america pipeline regency usa

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Regency Energy Partners LP (NYSE:RGP) (“Regency”) announced today that it has closed on its previously announced acquisition of the midstream business of Eagle Rock Energy Partners, L.P. (NASDAQ:EROC) (“Eagle Rock”) for a combination of cash, Regency common units and assumption of indebtedness. Regency issued approximately 8.2 million Regency common units to Eagle Rock and assumed approximately $500 million of outstanding Eagle Rock senior notes and exchanged those notes into Regency senior notes. Regency will fund the cash consideration with proceeds from a $400 million private placement of Regency common units to a subsidiary of Energy Transfer Equity, L.P. (NYSE:ETE), the owner of Regency’s general partner, and borrowings under Regency’s revolving credit facility.

“The acquisition will complement Regency’s core gathering and processing business, and when combined with the recent acquisition of PVR Partners, will strengthen our existing positions in the Texas Panhandle and East Texas,” said Mike Bradley, president and chief executive officer of Regency. “In addition, we believe this acquisition will be accretive to our distributable cash flow per common unit, and continue to expect to recommend to our board of directors distribution increases representing a growth rate of 6-8% for 2014.”

“I would also like to thank Eagle Rock's management team for facilitating the completion of this transaction,” continued Bradley.

Eagle Rock’s midstream assets include approximately 8,100 miles of gathering pipeline and over 800 MMcf/d of processing plants and their cash flows are supported by large, long-term acreage dedications. The combined system is expected to provide significant synergies, increase efficiencies on Regency’s current system, and enhance services for its customers.

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