HOUSTON, Oct. 28, 2013 (GLOBE NEWSWIRE) -- Eagle Rock Energy Partners, L.P. (Nasdaq:EROC) ("Eagle Rock" or the "Partnership") today declared a cash distribution for the quarter ended September 30, 2013 of $0.15 per common unit (including eligible restricted common units), equivalent to $0.60 per unit on an annualized basis. The distribution will be paid on Thursday, November 14, 2013 to unitholders of record as of the close of business on Thursday, November 7, 2013, and represents a decrease from the distribution of $0.22 per common unit paid with respect to the second quarter.
The Partnership's operating and financial performance improved in the third quarter of 2013. Despite this, the Partnership continued to generate insufficient distributable cash flow to cover the $0.22 per unit distribution level. With the expectation that the challenges that have affected the Partnership over the last several quarters are likely to continue, the Board of Directors decided to lower the distribution to a level that stabilizes and begins to improve the Partnership's leverage ratio and liquidity position.
Based on preliminary financial results for the quarter ended September 30, 2013 (subject to the completion of the Partnership's quarter-end review), management expects to report Adjusted EBITDA of approximately $62.8 million, which would represent an increase of 12% over the second quarter 2013 amount. Management expects to report distribution coverage of approximately 1.05x for the third quarter of 2013, and expects that level to increase over the next several quarters.Management anticipates that the lower distribution level coupled with an anticipated growing distribution coverage over the next several quarters will allow the Partnership to redirect some of its cash from operations toward debt repayment in the near term, which will benefit the common unitholders in the form of greater equity value, and the Partnership in the form of greater liquidity and financial flexibility. All actual future distributions will be determined, declared and paid at the sole discretion of the Board of Directors. In addition, management and the Board of Directors continue to explore alternatives to address the Partnership's leverage ratio and liquidity position, which may include asset sales or purchases, equity financings, the separation of its upstream and midstream businesses or other alternatives.
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