HOUSTON--(BUSINESS WIRE)--Nov. 9, 2009--
Eagle Rock Energy Partners, L.P. (“Eagle Rock” or the “Partnership”)
(NASDAQ: EROC) announced today that the Conflicts Committee (the
“Conflicts Committee”) of the Board of Directors of the general partner
of the general partner of the Partnership (the “Board”) received a joint
letter on November 7, 2009, from Natural Gas Partners VII, L.P. and
Natural Gas Partners VIII, L.P. (collectively with certain of their
affiliates, “NGP”) and Black Stone Minerals Company, L.P. (collectively
with certain of its affiliates, “Black Stone”). The joint letter dated
November 7, 2009 includes a joint term sheet (together with the letter,
the “Joint Proposal”) setting forth revised terms and conditions of, and
serving as a replacement of, both NGP’s and Black Stone’s most recent
individual proposals to the Partnership. A copy of the Joint Proposal
has been filed by the Partnership with the Securities and Exchange
Commission on Form 8-K.
The Joint Proposal contemplates, among other things:
-
a commitment by NGP to participate in a portion of, and provide
support for (“back-stop”), a rights offering and an equity offering;
-
a commitment by Black Stone to purchase the Partnership’s Minerals
Business (as defined in the Partnership’s filings with the Securities
and Exchange Commission) for $170 million;
-
a contribution to the Partnership of all incentive distribution rights
in the Partnership and the 20,691,495 subordinated units outstanding;
-
an option in favor of the Partnership to acquire the Partnership’s
844,551 outstanding general partner units by acquiring all of the
outstanding equity of the general partner of the general partner of
the Partnership and all of the limited partner units of the
Partnership’s general partner, in exchange for one million
newly-issued common units; and
-
the payment by the Partnership to NGP of a transaction fee, payable at
the Partnership’s option as $29 million in cash or as some combination
of cash, common units and/or warrants.
At management’s request to the Conflicts Committee, the new incentives
for the management team that were included in NGP’s prior proposals were
not included in the Joint Proposal.
NGP owns a significant equity position in Eagle Rock Holdings, L.P.,
which owns 2,338,419 common units, 20,691,495 subordinated units and all
of the equity interests in Eagle Rock Energy GP, L.P., the Partnership’s
general partner (directly and through ownership of all equity interests
of the general partner of the Partnership’s general partner), which
holds the general partner units and incentive distribution rights in the
Partnership. In addition, NGP owns and controls 8,700,169 aggregate
common units and reports beneficial ownership over some additional
common units.
The Conflicts Committee has not yet determined that the Joint Proposal
constitutes an acceptable framework for negotiation of definitive
documents. In addition, consummation of the proposed transaction(s) in
the Joint Proposal is expected to be conditioned upon receiving the
approval of a majority of the common units held by non-affiliates. The
Partnership cautions the unitholders of the Partnership, and others
considering trading in securities of the Partnership, that the Joint
Proposal is not binding at this time, that neither the Board nor the
Conflicts Committee has made any decision with respect to the response
of the Partnership to the Joint Proposal, and that there can be no
assurance that definitive documents will be executed or that any
transaction will be approved or consummated.
This news release may include forward-looking statements. All
statements, other than statements of historical facts, included in this
press release that address activities, events or developments that the
Partnership expects, believes or anticipates will or may occur in the
future are forward-looking statements and speak only as of the date on
which such statement is made. These statements are based on certain
assumptions made by the Partnership based on its experience and
perception of historical trends, current conditions, expected future
developments and other factors it believes are appropriate under the
circumstances. Such statements are subject to a number of assumptions,
risks and uncertainties, many of which are beyond the control of the
Partnership, which may cause the Partnership’s actual results to differ
materially from those implied or expressed by the forward-looking
statements. The Partnership assumes no obligation to update any
forward-looking statement as of any future date. For a detailed list of
the Partnership’s risk factors, please consult the Partnership’s Form
10-K, filed with the Securities and Exchange Commission for the year
ended December 31, 2008, and the Partnership’s Forms 10-Q filed with the
Securities and Exchange Commission, as well as any other public filings
and press releases.
Source: Eagle Rock Energy Partners, L.P.
Eagle Rock Energy Partners, L.P.
Jeff Wood, 281-408-1203
Senior
Vice President and Chief Financial Officer
