Eagle Rock (EROC) Declares $0.07 Quarterly Dividend; Approves $100M Buyback; Updates on Hedging

Eagle Rock Energy Partners (NASDAQ: EROC) declared a quarterly dividend of $0.07 per share, or $0.28 annualized.

The dividend will be payable on November 14, 2014, to stockholders of record on November 7, 2014, with an ex-dividend date of November 5, 2014.

The annual yield on the dividend is 8.3 percent.

Eagle Rock's liquidity position has significantly improved as a result of the Midstream Business Contribution which closed on July 1, 2014. With the expectation of continued improved liquidity and commodity price volatility, the Partnership has reinstated the distribution to a level that is expected to maintain a strong distribution coverage and healthy leverage ratio. Based on preliminary financial results for the quarter ended September 30, 2014 (subject to the completion of the Partnership's quarter-end review), management expects to report distribution coverage for the third quarter of 2014 in excess of management's previously discussed 1.1 – 1.2 times target coverage.

Common Unit Repurchase Program of up to $100 Million

Eagle Rock also today announced that the Partnership's Board of Directors authorized a common unit repurchase program of up to $100 million, in light of recent and potentially persisting economic and market conditions and Eagle Rock's liquidity position.

Joseph A. Mills, the Partnership's Chairman and Chief Executive Officer, stated, "Our re-instatement of a cash distribution for the third quarter of 2014 and announcement of this new repurchase program demonstrates our ongoing commitment to maximizing unitholder value through return of capital and value-enhancing investments. We also remain focused on operational excellence, growth through acquisitions, and preservation of a strong balance sheet and ample liquidity."

Repurchases may be made from time to time at prevailing prices on the open market or in privately negotiated transactions, as permitted by securities laws and other legal requirements. The program is authorized to commence following the filing of Eagle Rock's quarterly report on Form 10-Q for the third quarter of 2014 and conclude by March 31, 2016. The repurchase program does not obligate the Partnership to acquire any, or any specific number of, units and may be discontinued at any time. Eagle Rock intends to cancel any units it repurchases under the repurchase program.

The Partnership's repurchase program was approved by members of the Board not affiliated with the NGP Parties (as defined in Eagle Rock's partnership agreement), and those approving had no information regarding any specific plans of the NGP Parties to make sales of their 53,340,601 Partnership common units registered under an effective resale shelf registration statement.

Commodity Price Hedging

The Partnership employs risk mitigation strategies to protect cash flow such that the Partnership may maintain a steady rate of quarterly cash distributions to its investors. One important risk mitigation strategy is the use of commodity price hedging, to lock in stable cash flow during commodity price fluctuations. Eagle Rock's estimated hedge profile is as follows:

Note: 45% of the Partnership's natural gas liquids ("NGLs") are hedged directly in the remainder of 2014 (Propane - $1.06/gal; I Butane - $1.31/gal; N Butane - $1.30/gal). While these NGL direct product hedges, and the volumes under them, are included in the percentage of oil volumes hedged for 2014 as shown above, the weighted-average strike prices shown above for WTI and LLS in 2014 do not include any impact of these hedges. There are no direct NGL product hedges in 2015-19.

Please see the Partnership's most recent hedge presentation at www.eaglerockenergy.com for further detail on its hedge profile.

For a dividend history and other dividend-related data on Eagle Rock Energy Partners (EROC) click here.

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