Eagle Rock Energy Partners, L.P. (NASDAQ: EROC), together with its subsidiaries, gathers, compresses, treats, processes, transports, and sells natural gas. The company also acquires, develops and produces oil and natural gas working interests in Alabama and Texas; in addition to acquiring and managing fee minerals and royalty interests. Eagle Rock has natural gas gathering and processing assets in Texas Panhandle, east Texas/Louisiana, south Texas, west Texas, and the Gulf of Mexico.
The company aims to achieve stable, growing distributions to its investors by excelling in four mission critical activities — operations, acquisitions, organic growth projects and risk management. Eagle Rock emphasizes connecting new wells quickly, operating low-pressure gathering systems, executing contracts and agreements promptly, and providing reliable services. In all of its operations, the company strives to maintain a commitment to safety and compliance with environmental regulations.
In the second quarter, the company announced that it is temporarily reducing its quarterly distribution rate to enhance its liquidity position and reduce debts. The Board of Directors made this decision in view of the significant decline in commodity prices and drilling activity. Despite the distribution cut, the company continues to generate significant cash flow and believes technical pressure will reverse when meaningful distribution is reinstated.
With natural gas prices hitting a 6 ½ year low two months ago, it’s no surprise Eagle Rock’s stock has also hit new lows recently. However, the management team has demonstrated its ability to minimize expenditures and is working to better position the company to capitalize on future opportunities. With a solid asset mix and exposure to high quality producing basins, the company is poised to substantially benefit from an upswing in natural gas prices.
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