Eagle Rock Reports Fourth-Quarter And Year-End 2010 Financial Results

HOUSTON, March 9, 2011 (GLOBE NEWSWIRE) -- Eagle Rock Energy Partners, L.P. ("Eagle Rock" or the "Partnership") (Nasdaq:EROC) today announced its unaudited financial results for the full-year and three months ended December 31, 2010. Financial highlights with respect to fourth-quarter 2010 included the following (all current and historical financial results for the Partnership's Minerals Business, which was sold during the second quarter of 2010, have been removed from the operating financial results and are reflected in Discontinued Operations):

• Reported Adjusted EBITDA of $31.7 million, down from the $33.2 million reported in third-quarter 2010.
• Reported Distributable Cash Flow of $18.1 million, an increase of approximately 5% as compared to the $17.2 million reported in third-quarter 2010.
• Reported a net loss of $52.2 million, primarily attributable to unrealized commodity derivative losses and impairments totaling $55.9 million.
• Paid a quarterly distribution with respect to the fourth quarter of 2010 of $0.15 per common unit, an increase of $0.125 per common unit over the distribution paid with respect to third-quarter 2010, with a distribution coverage ratio of approximately 1.4x; management has announced its objective and expectation of reaching an annualized distribution rate of $0.75 per unit commencing with respect to the fourth quarter of 2011 (payable in February 2012).
• Announced that the borrowing base under the Partnership's senior secured credit facility had been increased to $140 million from its previous level of $130 million as part of Eagle Rock's regularly scheduled semi-annual borrowing base redetermination.

Other notable operational events impacting the fourth quarter of 2010 include the following:

• Announced and closed the acquisition of 200 miles of complementary gathering systems in Texas Panhandle and the acquisition of additional interests in the Partnership's Big Escambia Creek Field; the two transactions totaled approximately $31 million.
• Announced start-up of commercial operations of the Partnership's Phoenix Plant located in Roberts County in Texas Panhandle.
• Approximately one quarter of the Partnership's total upstream production was shut-in for the entire quarter due to an unscheduled shutdown of a third-party owned and operated processing facility which negatively impacted the Partnership's financial results for the quarter. The Partnership recovered and recorded $3.0 million under its contingent business interruption insurance policy during the quarter.

For the full-year 2010, Eagle Rock generated $128.7 million of Adjusted EBITDA, a decrease of 26% from the $174.5 million reported for the full-year 2009. Realized commodity derivative gains contributed approximately $83.3 million to full-year 2009 Adjusted EBITDA, while realized commodity derivative losses reduced full-year 2010 Adjusted EBITDA by approximately $17.0 million. Without this impact, Adjusted EBITDA would have increased by $54.5 million, or 60%, from full-year 2009 to full-year 2010, which was largely driven by increases in the underlying commodity prices.