Eagle Rock Energy Partners, L.P. (EROC) Declines After Halting Distribution

Eagle Rock Energy Partners, L.P. (Nasdaq: EROC) announced a suspension of its quarterly distribution in order to preserve liquidity in advance of closing the contribution of its Midstream Business to Regency Energy Partners LP (the "Midstream Business Contribution"). As previously announced, the Partnership received a request for additional information and documents ("Second Request") on February 27, 2014 from the Federal Trade Commission ("FTC") in connection with the Midstream Business Contribution. This has extended management's original timeframe for closing the transaction and created the need to preserve greater liquidity in the interim to fund growth capital expenditures and other financial obligations.

The Partnership will conduct a special meeting of its common unitholders on April 29, 2014, to consider and vote on the Midstream Business Contribution. Assuming unitholders approve the transaction, all major closing conditions other than FTC approval will have been met, and Eagle Rock would expect to close the transaction shortly after receiving such approval from the FTC. Eagle Rock and Regency are working expeditiously to respond to the Second Request.

Management currently expects to recommend resuming the quarterly distribution following the closing of the Midstream Business Contribution, at which point management expects the Partnership's total debt balance and liquidity position to be substantially improved.

Management's future distribution recommendations are subject to change should factors affecting the general business climate or the Partnership's specific operations differ from current expectations. All actual future distributions will be determined, declared and paid at the sole discretion of the Board of Directors.

Operational Update

Based on preliminary financial results for the quarter ended March 31, 2014 (subject to the completion of the Partnership's quarter-end review), management expects to report Adjusted EBITDA and distributable cash flow for the first quarter of 2014 slightly above levels reported for the fourth quarter of 2013. Despite this, the Partnership's total borrowings under its credit facility increased relative to year-end levels. Management expects that, should the Midstream Business Contribution not close within the second quarter, the Partnership may need to seek certain amendments to its revolving credit facility agreement similar to those obtained with respect to the first quarter of 2014.

About the Partnership

The Partnership is a growth-oriented master limited partnership engaged in two businesses: a) midstream, which includes (i) gathering, compressing, treating, processing and transporting natural gas; (ii) fractionating and transporting natural gas liquids (NGLs); (iii) crude oil and condensate logistics and marketing; and (iv) natural gas marketing and trading; and b) upstream, which includes exploiting, developing, and producing hydrocarbons in oil and natural gas properties.

The term "Board of Directors" as used herein refers to the board of directors of the general partner of the Partnership's general partner.

Qualified Notice to Nominees

This release serves as qualified notice to nominees as provided for under Treasury Regulation Section 1.1446-4(b)(4) and (d). Please note that 100 percent of the Partnership's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of the Partnership's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not the Partnership, are treated as withholding agents responsible for withholding distributions received by them on behalf of foreign investors.

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