Exhibit 99.1
Eagle Rock Energy Partners, L.P.
Reports Results for Fourth Quarter and Full Year 2006
HOUSTON--(BUSINESS WIRE)--April 2, 2007--Eagle Rock Energy
Partners, L.P. (Nasdaq:EROC) today reported its financial results for
the fourth quarter and full year ended December 31, 2006.
For the fourth quarter of 2006, the Partnership reported $115.7
million of revenues as compared to $57.4 million for the fourth
quarter of 2005. Total revenues for the year ended December 31, 2006
were $478.4 million as compared to total revenues of $73.7 million for
the year ended December 31, 2005.
The Partnership reported a net loss of $11.7 million for the
fourth quarter of 2006, compared to net income of $3.2 million for the
same period in 2005. Net loss for the fourth quarter of 2006 included
a $4.8 million net loss for unrealized risk management activities as
compared to an $8.9 million net gain for the fourth quarter of 2005.
Additionally, during the fourth quarter of 2006, the Partnership
recorded a pre-tax $6.0 million expense related to the termination of
an advisory services agreement, which contributed to the net loss
reported. Net loss for the year ended December 31, 2006 was $23.3
million as compared to net income of $2.7 million for the year ended
December 31, 2005. Included in net loss for 2006 was $23.5 million net
loss of unrealized risk management activities as compared to $8.9
million of net gains for unrealized risk management activities in
2005, in addition to the pre-tax expense attributable to the $6.0
million expense related to the termination of an advisory services
agreement.
Adjusted EBITDA for the fourth quarter of 2006 was $19.0 million,
which was in the guidance range the Partnership reported earlier. For
the fourth quarter of 2005, adjusted EBITDA was $3.1 million. Adjusted
EBITDA for the year ended December 31, 2006 was $81.2 million as
compared to $3.4 million for the year ended December 31, 2005.
The increase in revenues and adjusted EBITDA for the fourth
quarter of 2006 as compared to the previous year's fourth quarter
reflects the impact from a full quarter inclusion of the Panhandle
Texas acquisition (assets acquired December 1, 2005) and the
Brookeland and MGS acquisitions during 2006. The improvement in
results also reflects the impact of the organic growth projects during
the year including the first phase of the Tyler County Pipeline
project, as well as the growth from the well attachment programs
during the year.
The Partnership also announced the filing of its Annual Statement
on Form 10-K for the year ended December 31, 2006 with the Securities
and Exchange Commission.
Eagle Rock will host a conference call to discuss financial
results and the previously announced potential acquisitions, financing
and organizational changes on Wednesday, April 4, 2007, at 9 a.m. CT
(10 a.m. ET). Interested parties may listen live over the Internet or
via telephone. To participate live over the Internet, log on to the
Partnership's Web site at www.eaglerockenergy.com. To participate by
telephone, the call in number is 866-356-3377, confirmation code
32523357. Please call five to 10 minutes prior to the scheduled start
time.
An audio replay of the conference call will also be available for
seven days by dialing 888-286-8010, confirmation code 58050693. A
replay and transcript will also be available by accessing the
Partnership's Web site.
Eagle Rock Energy Partners, L.P. is a growth-oriented midstream
energy partnership engaged in the business of gathering, compressing,
treating, processing, transporting and selling natural gas and
fractionating and transporting natural gas liquids in Texas and
Louisiana. Its corporate office is located in Houston, Texas.
Adjusted EBITDA is defined as net income (loss) plus income tax,
interest-net, depreciation and amortization expense, other non-cash
operating expenses less non realized revenues risk management loss
(gain) activities and less net income from discontinued operations.
This press release may include "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended.
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. 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.
Eagle Rock Energy Partners, L.P.
Consolidated Statements of Operations
Quarter Quarter Year Ended Year Ended
Ended Ended
December December December December
31, 2006 31, 2005 31, 2006 31, 2005
---------- ---------- ---------- ----------
($ in thousands)
REVENUE:
Natural gas liquids
sales $52,730 $17,284 $234,354 $29,192
Natural gas sales 48,396 25,438 195,146 26,463
Condensate 12,783 1,117 57,411 4,266
Gathering, compression
and processing fees 4,367 6,070 14,862 6,247
Gain (loss) on risk
management instruments (2,795) 7,308 (24,004) 7,308
Other 185 214 621 214
---------- ---------- ---------- ----------
Total Revenue 115,666 57,431 478,390 73,690
COSTS AND EXPENSES:
Cost of natural gas and
natural gas liquids $88,699 $41,530 $377,580 $55,272
Operations and
maintenance 9,013 2,085 32,905 2,955
General and
administrative 4,052 3,364 13,161 4,765
Advisory termination
fee 6,000 - 6,000 -
Depreciation and
amortization 11,762 3,310 43,220 4,088
---------- ---------- ---------- ----------
Total Costs and
Expenses 119,526 50,289 472,866 67,080
OPERATING INCOME (LOSS): $(3,860) $7,142 $5,524 $6,610
Other Income (Expense):
Interest and other
income 321 1,770 996 171
Interest and other
expense (7,675) (5,693) (28,604) (4,031)
---------- ---------- ---------- ----------
INCOME (LOSS) BEFORE
INCOME TAXES $(11,214) $3,219 $(22,084) $2,750
Income tax provision 486 - 1,230 -
---------- ---------- ---------- ----------
NET INCOME (LOSS) $(11,700) $3,219 $(23,314) $2,750
========== ========== ========== ==========
Eagle Rock Energy Partners, L.P.
Consolidated Balance Sheets
($ in thousands)
December 31,December 31,
2006 2005
------------------------
Assets
Current assets:
Cash and cash equivalents $10,581 $19,372
Accounts receivable 43,567 43,557
Risk management assets 13,837 21,830
Prepayments and other current assets 2,679 1,277
------------------------
Total current assets 70,664 86,036
Property plant and equipment - net 554,063 441,588
Intangible assets - net 130,001 115,000
Risk management assets 17,373 44,023
Other assets 7,800 14,012
------------------------
Total assets $779,901 $700,659
========================
Liabilities and Members' Equity
Current liabilities:
Accounts payables $49,558 $43,401
Distributions payable - affiliate - 5,000
Accrued liabilities 7,996 2,324
Risk management liabilities 1,005 2,260
Current maturities of long-term debt - 3,866
------------------------
Total current liabilities 58,559 56,851
Long-term debt 405,731 404,600
Asset retirement obligations 1,819 679
Deferred tax liability 1,229 -
Risk management liabilities 20,576 30,433
Members' equity
Common unit holders 116,283 208,013
Subordinated unit holders 176,248 -
General partner (544) 83
------------------------
Total members' equity 291,987 208,096
------------------------
Total Liabilities and Members' Equity $779,901 $700,659
========================
Press Release
Supplemental Financial Information
Eagle Rock Energy Partners, L.P.
Results of Operations
($ in thousands) Three Months Ended Twelve Months
Ended
---------------------------- ------------------
Dec 2006 Sept 2006 Dec 2005 Dec 2006 Dec 2005
--------- --------- -------- --------- --------
Sales of natural gas,
NGLs and condensate $113,909 $132,830 $43,839 $486,911 $59,921
Gathering and treating
services 4,367 4,549 6,070 14,862 6,247
Risk management
instrument-realized
transactions 2,180 (449) - 2,302 -
Risk management
instrument-unrealized (4,975) 14,480 7,308 (26,306) 7,308
Other revenues 185 109 214 621 214
--------- --------- -------- --------- --------
Total operating
revenues 115,666 151,519 57,431 478,390 73,690
--------- --------- -------- --------- --------
Purchase of natural
gas and NGLs 88,699 100,645 41,530 377,580 55,272
--------- --------- -------- --------- --------
Segment Profit 26,967 50,874 15,901 100,810 18,418
--------- --------- -------- --------- --------
Operation and
maintenance expense 9,013 9,227 2,085 32,905 2,955
General and
administrative
expense 4,052 2,965 3,364 13,161 4,765
Depreciation and
amortization expense 11,762 11,244 3,310 43,220 4,088
Interest- net
including realized
risk management
instrument 7,490 7,881 5,522 30,383 5,459
Unrealized risk
management interest
related instrument (136) 6,449 (1,599) (2,775) (1,599)
Advisory termination
fee 6,000 - - 6,000 -
Income tax provision 486 236 - 1,230 -
--------- --------- -------- --------- --------
Net Income $(11,700) $12,872 $3,219 $(23,314) $2,750
========= ========= ======== ========= ========
--------- --------- -------- --------- --------
Adjusted EBITDA $19,019 $24,202 $3,144 $81,192 $3,390
--------- --------- -------- --------- --------
GAAP to Non GAAP Reconciliations
Segment Profit reconciliation to Net Income (Loss):
Three Months Ended Twelve Months
Ended
--------------------------- ------------------
Dec 2006 Sept Dec 2005 Dec 2006 Dec 2005
2006
--------- -------- -------- --------- --------
Segment Profit $26,967 $50,874 $15,901 $100,810 $18,418
Less
Operation and
maintenance expense 9,013 9,227 2,085 32,905 2,955
General and
administrative expense 4,052 2,965 3,364 13,161 4,765
Depreciation and
amortization expense 11,762 11,244 3,310 43,220 4,088
Interest- net including
realized risk
management instrument 7,490 7,881 5,522 30,383 5,459
Advisory termination
fee 6,000 - - 6,000 -
Unrealized risk
management interest
related instrument (136) 6,449 (1,599) (2,775) (1,599)
Income tax provision 486 236 - 1,230 -
--------- -------- -------- --------- --------
Net income (loss) as
reported $(11,700) $12,872 $3,219 $(23,314) $2,750
Adjusted EBITDA
reconciliation to Net
Income (Loss):
Three Months Ended Twelve Months
Ended
--------------------------- ------------------
Dec 2006 Sept Dec 2005 Dec 2006 Dec 2005
2006
--------- -------- -------- --------- --------
Adjusted EBITDA $19,019 $24,202 $3,144 $81,192 $3,390
Less
Income tax provision 486 236 - 1,230 -
Interest- net including
realized risk
management instrument 7,490 7,881 5,522 30,383 5,459
Unrealized risk
management interest
related instrument (136) 6,449 (1,599) (2,775) (1,599)
Depreciation and
amortization expense 11,762 11,244 3,310 43,220 4,088
Restricted units
amortization expense 142 - - 142 -
Advisory termination
fee 6,000 - - 6,000 -
Plus
Risk management
instrument-unrealized (4,975) 14,480 7,308 (26,306) 7,308
--------- -------- -------- --------- --------
Net income (loss) as
reported $(11,700) $12,872 $3,219 $(23,314) $2,750
2006 Quarter Ended
December 31 September 30
------------- -------------
Operational Information
Gathering volumes- 230,920 236,164
mmcf/d average
NGL total equity gallons 18,149,163 18,822,228
Condensate total equity barrels 239,835 226,644
Natural gas short position- (5,077) (5,098)
mmbtu/d average
Key Index prices - average
Oil $60.19 $70.62
NGL - average pricing/gallon $0.96 $1.10
Natural gas $6.56 $6.58
CONTACT: Eagle Rock Energy Partners, L.P., Houston
Investor Relations
Richard FitzGerald, 281-408-1203