UPDATE: Citigroup Initiates Coverage on Eagle Rock Energy Partners with Neutral Rating, $9 PT

In a report published Friday, Citigroup initiated coverage on Eagle Rock Energy Partners LP

with a Neutral rating and $9.00 price target. Citigroup noted, “We are initiating coverage with a Neutral rating and target price of $9.00/unit. The partnership currently offers investors an attractive yield of 10%+, but the visibility to distribution growth from current levels is limited as the partnership is still resolving operation issues at its existing assets, in the process of integrating assets acquired from BP and also in the midst of rationalizing its upstream capital spending program. We estimate that the distributions at current levels are secure, short of a major downturn in commodity prices and slow-down in the US upstream drilling activity.” Eagle Rock Energy Partners closed on Thursday at $8.65.