##### Table of Contents



As filed with the Securities and Exchange Commission on
    October 2, 2007
 
 Registration No. 333-144938
    UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
      Amendment No. 2
 to
 Form S-1
 REGISTRATION
    STATEMENT
 UNDER
 THE SECURITIES ACT OF
    1933
      EAGLE ROCK ENERGY PARTNERS,
    L.P.
 (Exact name of registrant as
    specified in its charter)
  Delaware

1311

69-0629883(State or other jurisdiction
    of
    incorporation or organization)

(Primary Standard Industrial
    Classification Code Number)

(I.R.S. Employer
    Identification Number)       16701 Greenspoint Park Drive,
    Suite 200
 Houston, TX 77060
 (281) 408-1200
 (Address, including zip code,
    and telephone number, including area code, of Registrants
    principal executive offices)
      Alfredo Garcia
 16701 Greenspoint Park Drive,
    Suite 200
 Houston, Texas 77060
 (281) 408-1200
 (Name, address, including zip
    code, and telephone number, including area code, of agent for
    service)
      Copies to:
  Barry Davis
 Thomas R. Lamme
 Thompson & Knight
    LLP
 333 Clay Street, Suite
    3300
 Houston, TX 77002
 (713) 654-8111
      Approximate date of commencement of proposed sale to the
    public:
  þ
  o
  o
  o
      
 Proposed



Proposed Maximum



Amount ofTitle of Class of


Amount



Maximum Price



Aggregate Offering



RegistrationSecurities to be Registered


to be Registered



Per Unit



Price



FeeCommon units representing limited partner interests



18,574,496
(1)




(1)




(1)




(1)  
 
  (1)
    
    The aggregate number of common units representing limited
    partner interests being registered in this offering includes
    3,770,706 common units registered previously, in accordance with
    Rule 429, on
    Form S-1
    (File
    No. 333-140370)
    for which securities remain unsold and for which the fee was
    paid previously on that registration statement. With respect to
    the remaining common units representing limited partner
    interests being registered in this offering, all fees were paid
    previously. 
  Pursuant to Rule 429(a) under the Securities Act of
    1933, the prospectus included in this Registration Statement is
    a combined prospectus and also relates to 3,770,706 common units
    in aggregate amount registered and remaining unsold under
    Registrants Registration Statement on
    Form S-1
    (No. 333-140370).
    Pursuant to Rule 429(b), this Registration Statement also
    constitutes a Post-Effective Amendment to Registration Statement
    No. 333-140370,
    which post-effective amendment shall hereafter become effective
    concurrently with the effectiveness of this Registration
    Statement and in accordance with Section 8(c) of the
    Securities Act of 1933. If securities previously registered
    under that Registration Statement are offered and sold before
    the effective date of this Registration Statement, the amount of
    previously registered securities so sold will not be included in
    the prospectus hereunder.




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The
information in this prospectus is not complete and may be
changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these
securities in any state where such offer or sale is not
permitted.   SUBJECT
    TO COMPLETION PRELIMINARY PROSPECTUS DATED OCTOBER 2,
    2007
 
  PROSPECTUS
  
  18,574,496
    Common Units
    Representing Limited Partner Interests
     
   
 
  Investing in our common units involves risks.  You
    should read the section entitled Risk Factors
    beginning on page 11 of this prospectus, for a discussion
    of certain risk factors that you should consider when investing
    in our common stock.
 
    Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or passed upon the adequacy or accuracy of this
    prospectus. Any representation to the contrary is a criminal
    offense.




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##### 



TABLE OF
    CONTENTS
   
 
 SUMMARY


1Eagle Rock Energy Partners, L.P.


1The Offering


8RISK FACTORS


11USE OF PROCEEDS


35CAPITALIZATION


35Price Range of Common Units and Distributions


35OUR CASH DISTRIBUTION POLICY AND RESTRICTIONS ON
    DISTRIBUTIONS


36PROVISIONS OF OUR PARTNERSHIP AGREEMENT RELATING
    TO CASH DISTRIBUTIONS


39SELECTED HISTORICAL FINANCIAL DATA


48Non-GAAP Financial Measures


51MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS


53BUSINESS


56MANAGEMENT


74COMPENSATION DISCUSSION AND ANALYSIS


78SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT


87SELLING UNITHOLDERS


89CERTAIN RELATIONSHIPS AND RELATED PARTY
    TRANSACTIONS


93Formation Stage


93Operational Stage


94Liquidation Stage


94CONFLICTS OF INTEREST AND FIDUCIARY DUTIES


98DESCRIPTION OF THE COMMON UNITS


104THE PARTNERSHIP AGREEMENT


105UNITS ELIGIBLE FOR FUTURE SALE


117MATERIAL TAX CONSEQUENCES


119INVESTMENT IN EAGLE ROCK ENERGY PARTNERS, L.P. BY
    EMPLOYEE BENEFIT PLANS


133PLAN OF DISTRIBUTION


134VALIDITY OF THE COMMON UNITS


136EXPERTS


136INDEPENDENT ENGINEERS


136WHERE YOU CAN FIND MORE INFORMATION


136CAUTIONARY NOTE REGARDING FORWARD-LOOKING
    STATEMENTS


137INCORPORATION BY REFERENCE


138Opinion of Thompson & Knight LLP - LegalityOpinion of Thompson & Knight LLP - Tax MattersConsent of Deloitte & Touche LLPConsent of Deloitte & Touche LLPConsent of Deloitte & Touche LLPConsent of Cawley, Gillespie & AssociatesPower of Attorney for William A. Smith  
  i




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SUMMARY
 
  This summary highlights information contained herein and
    incorporated by reference in this prospectus. It is not complete
    and does not contain all of the information you may wish to
    consider before investing in our common units. We urge you to
    read this entire prospectus and the information incorporated
    herein by reference carefully, including the Risk
    Factors beginning on page 11 of this prospectus and
    the financial statements incorporated by reference in this
    prospectus from our amended Annual Report on
    Form 10-K/A
    for the year ended December 31, 2006.
 
 
  References in this prospectus to Eagle Rock Energy
    Partners, L.P., Eagle Rock, we,
    our, us or like terms, when used in a
    pre-IPO context, refer to Eagle Rock Pipeline, L.P. and its
    subsidiaries. When used in a post-IPO context, the present tense
    or prospectively, those terms refer to Eagle Rock Energy
    Partners, L.P. and its subsidiaries. References to Natural
    Gas Partners refer to Natural Gas Partners VII, L.P. and
    Natural Gas Partners VIII, L.P. in the context of any
    description of our investors, and in other contexts refer to
    Natural Gas Partners, L.L.C. d/b/a NGP Energy Capital
    Management, which manages a series of energy investment funds,
    including Natural Gas Partners VII, L.P. and Natural Gas
    Partners VIII, L.P. References to the NGP Investors
    refer to Natural Gas Partners and some of our directors and
    current and former members of our management team. References to
    Holdings or Eagle Rock Holdings refer to
    Eagle Rock Holdings, L.P., our largest holder of our securities,
    which is owned by the NGP Investors.
 
  In connection with our recently completed Montierra
    Acquisition, described below, J.A. Mills became the Chief
    Executive Officer and Chairman of the Board of Eagle Rock Energy
    G&P, LLC, which is the general partner of our general
    partner. Mr. Mills remains as chief executive officer and
    manager of Montierra Management LLC, which is controlled by
    Natural Gas Partners and which is the general partner of
    Montierra Minerals & Production, L.P. References in
    this prospectus to Montierra refer to both Montierra
    Management LLC and Montierra Minerals & Production,
    L.P. Unless stated otherwise, when we refer to affiliates
    of our general partner, we are not referring to Montierra,
    which is under common control with us through Natural Gas
    Partners control of Montierra. Any percentage of limited
    partner interests with respect to our general partner and
    affiliates of our general partner described in this prospectus
    do not include interest owned by Montierra. Additionally, any
    description of incentive distribution rights in this prospectus
    is qualified by the fact that in connection with the Montierra
    Acquisition, Holdings conveyed an equity interest to Montierra
    that tracks 39.34% of the economic interest in the incentive
    distribution rights. See Certain Relationships and Related
    Party Transactions  Montierra and Co-Invest
    Agreement for a discussion of the transaction.
  We have provided definitions for some of the industry terms
    used in this prospectus in the Glossary of Oil and Natural
    Gas Terms beginning in Appendix A of this
    prospectus.
  Eagle
    Rock Energy Partners, L.P.
  General
 1




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2




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Ownership
    of Eagle Rock Energy Partners, L.P.
  
 Public Common Units


19.21
%Private Investors Common Units (including selling unitholders)


43.51
%Eagle Rock Holdings, L.P. Common and Subordinated Units


31.47
%Montierra Minerals & Production Entities common units


3.92
%Restricted Units under LTIP


0.73
%General Partner Interest


1.16
%Total


100.00
%  
  
  
 (1)
    
    For a discussion of managements ownership, see
    Security Ownership of Certain Beneficial Owner and
    Management on p. 87.
 3




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(2)
    
    NGP Co-Investment funds own a total of 4,690,997 units as a
    result of the Montierra and Redman Acquisitions. 
  Risk
    Factors
 
   
  Management
    of Eagle Rock Energy Partners, L.P.
          Our
    General Partners Rights to Receive Distributions
 
  1.16% General Partner Interest.
 
 
  Incentive Distributions.
 4




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Total Quarterly

Marginal PercentageDistribution per Unit

Interest in Distributions*General PartnerTarget Distribution Level

Unitholders


InterestMinimum Quarterly Distribution

$0.3625


98.84
%


1.16
%First Target Distribution

up to $0.4169


98.84
%


1.16
%Second Target Distribution

Above $0.4169 up to $0.4531


85.84
%


14.16
%Third Target Distribution

Above $0.4531 up to $0.5438


75.84
%


24.16
%Thereafter

above $0.5438


50.84
%


49.16
%  
   
  *
    
    Presented assuming there are no arrearages on common units;
    presented as if our general partner maintains (and continues to
    maintain) its 1.16% current general partner interest and right
    to receive 1.16% of cash distributions; and presented assuming
    our general partner continues to own the incentive distribution
    rights. 
    Summary
    of Conflicts of Interest and Fiduciary Duties
  General.
  
    the manner in which our business is operated;
    the level and amount of our borrowings;
    the amount, nature and timing of our capital expenditures;
    asset purchases and sales and other acquisitions and
    dispositions; and
    the amount of cash reserves necessary or appropriate to satisfy
    general, administrative and other expenses and debt service
    requirements, and otherwise provide for the proper conduct of
    our business.    Partnership Agreement Modifications to Fiduciary
    Duties.
  Our general partners affiliates may engage in
    competition with us.
 5




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Recent
    Developments
    Laser Acquisition.
    Montierra Acquisition.
      MacLondon Acquisition.
  EAC Acquisition.
 6




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Redman Acquisition.
    Common Unit Purchase Agreement.
  Common Unit Purchase Agreement.
  Principal
    Executive Offices and Internet Address
  (281) 408-1200. www.eaglerockenergy.com
 7




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The
    Offering
  Common units offered by selling unitholders
    
    18,574,496 common units. 
  Units outstanding after this offering
    
    50,633,720 common units, 527,221 restricted common units issued
    under our 2006 Long-Term Incentive Plan, and 20,691,495
    subordinated units. 
  Use of proceeds
    
    We will not receive any proceeds from sales of common units by
    the selling unitholders.Cash distributions
    
    Our general partner has adopted a cash distribution policy that
    requires us to pay cash distributions at an initial distribution
    rate of $0.3625 per common unit per quarter ($1.45 per common
    unit on an annualized basis) to the extent we have sufficient
    cash from operations after establishment of cash reserves and
    payment of fees and expenses, including payments to our general
    partner and its affiliates, such as general and administrative
    expenses associated with being a publicly traded partnership.
    Our ability to pay cash distributions at this initial
    distribution rate is subject to various restrictions and other
    factors described in more detail under the caption Our
    Cash Distribution Policy and Restrictions on Distributions.Our partnership agreement requires us to distribute all of our
    cash on hand at the end of each quarter, less reserves
    established by our general partner. We refer to this cash as
    available cash, and we define its meaning in our
    partnership agreement and in the glossary of terms attached as
    Appendix A. Our partnership agreement also requires that we
    distribute all of our available cash from operating surplus each
    quarter in the following manner: 
   first, 98.84% to the holders of common units and
    1.16% to our general partner, until each common unit has
    received a minimum quarterly distribution of $0.3625 plus any
    arrearages from prior quarters; 
 
   second, 98.84% to the holders of subordinated units
    and 1.16% to our general partner, until each subordinated unit
    has received a minimum quarterly distribution of $0.3625; and 
 
   third, 98.84% to all unitholders, pro rata, and
    1.16% to our general partner, until each unit has received a
    distribution of $0.4169. 
 
  If cash distributions to our unitholders exceed $0.4169 per
    common unit in any quarter, our general partner will receive, in
    addition to distributions on its 1.16% general partner interest,
    increasing percentages, up to 48%, of the cash we distribute in
    excess of that amount. We refer to these distributions as
    incentive distributions. Please read
    Provisions of Our Partnership Agreement Relating to Cash
    Distributions. 
  Subordinated units
    
    Eagle Rock Holdings, L.P. owns all of our subordinated units.
    The principal difference between our common units and
    subordinated units is that in any quarter during the
    subordination period, holders of the subordinated units are
    entitled to receive the minimum
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quarterly distribution of $0.3625 per unit only after the common
    units have received the minimum quarterly distribution plus any
    arrearages in the payment of the minimum quarterly distribution
    from prior quarters. Subordinated units will not accrue
    arrearages.Conversion of subordinated units
    
    The subordination period will end on the first business day
    after we have earned and paid at least $1.45 (the minimum
    quarterly distribution on an annualized basis) on each
    outstanding limited partner unit and general partner unit for
    any three consecutive, non-overlapping four quarter periods
    ending on or after September 30, 2009. Alternatively, the
    subordination period will end on the first business day after we
    have earned and paid at least $0.5438 per quarter (150% of the
    minimum quarterly distribution, which is $2.175 on an annualized
    basis) on each outstanding limited partner unit and general
    partner unit for any four consecutive quarters ending on or
    after September 30, 2007.In addition, the subordination period will end upon the removal
    of our general partner other than for cause if the units held by
    our general partner and its affiliates are not voted in favor of
    such removal.When the subordination period ends, all remaining subordinated
    units will convert into common units on a one-for-one basis, and
    the common units will no longer be entitled to arrearages.Issuance of additional units
    
    We can issue an unlimited number of units without the consent of
    our unitholders. Please read Units Eligible for Future
    Sale and The Partnership Agreement 
    Issuance of Additional Securities. 
  Limited voting rights
    
    Our general partner manages and operates us. Unlike the holders
    of common stock in a corporation, you will have only limited
    voting rights on matters affecting our business. You will have
    no right to elect our general partner or its directors on an
    annual or other continuing basis. Our general partner may not be
    removed except by a vote of the holders of at least
    662/3%
    of the outstanding units, including any units owned by our
    general partner and its affiliates, voting together as a single
    class. Our general partner and its affiliates own an aggregate
    of 31.8% of our common and subordinated units (including
    restricted common units currently issued under our 2006
    Long-Term Incentive Plan). This gives our general partner the
    ability to prevent its involuntary removal. Please read
    The Partnership Agreement  Voting Rights. 
  Limited call right
    
    If at any time our general partner and its affiliates own more
    than 80% of the outstanding common units, our general partner
    has the right, but not the obligation, to purchase all of the
    remaining common units at a price not less than the then-current
    market price of the common units.Estimated ratio of taxable income to distributions
    
    We estimate that if you owned the common units from the date of
    our initial public offering, October 24, 2006, through the
    record date for distributions for the period ending
    December 31, 2009, you will be allocated, on a cumulative
    basis, an amount of federal taxable income for that period that
    will be 20% or less of the cash
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distributed to you with respect to that period. For example, if
    you receive an annual distribution of $1.45 per unit, we
    estimate that your average allocable federal taxable income per
    year will be no more than $0.29 per unit. Please read
    Material Tax Consequences  Tax Consequences of
    Unit Ownership  Ratio of Taxable Income to
    Distributions.Material tax consequences
    
    For a discussion of other material federal income tax
    consequences that may be relevant to prospective unitholders who
    are individual citizens or residents of the United States,
    please read Material Tax Consequences.Exchange listing
    
    Our common units are listed on the NASDAQ Global Market under
    the symbol EROC.
 10




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RISK
    FACTORS
  Limited partner interests are inherently different from
    capital stock of a corporation, although many of the business
    risks to which we are subject are similar to those that would be
    faced by a corporation engaged in similar businesses. You should
    consider carefully the following risk factors together with all
    of the other information included in this prospectus in
    evaluating an investment in our common units.
  If any of the following risks were actually to occur, our
    business, financial condition or results of operations could be
    materially adversely affected. In that case, we might not be
    able to pay the minimum quarterly distribution on our common
    units, the trading price of our common units could decline and
    you could lose all or part of your investment.
  Certain risks apply to both our midstream business and our
    upstream business. To the extent any risk applies to one or the
    other, we have indicated the specific risk in the appropriate
    risk factor.
  Risks
    Related to Our Business
  Because
    of the natural decline in production from existing wells, our
    success depends on our ability to obtain new sources of
    production and supplies of oil, natural gas and NGLs, which are
    dependent on certain factors beyond our control. Our success is
    also dependent on developing current reserves. Any decrease in
    production or supplies of oil, natural gas or NGLs could
    adversely affect our business and operating
    results.
       11




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Natural
    gas, NGLs, Crude Oil and other commodity prices are volatile,
    and a reduction in these prices could adversely affect our cash
    flow and our ability to make distributions.
    
    the impact of weather or force majeure events on the demand for
    oil and natural gas;
    the level of domestic oil and natural gas production and demand;
    the level of imported oil and natural gas availability and
    demand;
    the level of consumer product demand;
    political and economic conditions and events in, as well as
    actions taken by foreign oil and natural gas producing nations;
    overall domestic and global economic conditions;
    the availability of local, intrastate and interstate
    transportation systems including natural gas pipelines and other
    transportation facilities to our production;
    the availability and marketing of competitive fuels;
    delays or cancellations of crude oil and natural gas drilling
    and production activities;
    the impact of energy conservation efforts, including
    technological advances affecting energy consumption; and
    the extent of governmental regulation and taxation.   12




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in-kind) and/or Form 10-K
  Our
    hedging activities may have a material adverse effect on our
    earnings, profitability, cash flows and financial
    condition.
     13




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Form 10-K
  Our
    estimated oil and natural gas reserve quantities and future
    production rates are based on many assumptions that may prove to
    be inaccurate. Any material inaccuracies in these reserve
    estimates or the underlying assumptions will materially affect
    the quantities and present value of our reserves.
       14




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Our
    operations will require substantial capital expenditures, which
    will reduce our cash available for distribution. We may be
    unable to obtain needed capital or financing on satisfactory
    terms, which could lead to a decline in our cash
    flows.
    
    volume throughput through our pipelines and processing
    facilities;
    the estimated quantities of our oil and natural gas reserves;
    the amount of oil and natural gas produced from existing wells;
    the prices at which we sell our production or that of our
    midstream customers; and
    our ability to acquire, locate and produce new reserves.    We
    typically do not obtain independent evaluations of other
    producers natural gas reserves dedicated to our gathering
    and pipeline systems; therefore, volumes of natural gas on our
    systems in the future could be less than we
    anticipate.
   15




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The
    loss of any of our significant customers could result in a
    decline in our volumes, revenues and cash available for
    distribution.
  Midstream. make-up
  Upstream.
  We may
    not successfully balance our purchases and sales of natural gas,
    which would increase our exposure to commodity price
    risks.
    If
    third-party pipelines and other facilities interconnected to our
    systems become unavailable to transport or produce natural gas
    and NGLs, our revenues and cash available for distribution could
    be adversely affected.
    Our
    access to transportation options may affect our revenues and
    cash available for distribution.
    Our
    industry is highly competitive, and increased competitive
    pressure could adversely affect our business and operating
    results.
   16




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Midstream.
  Upstream.
    A
    change in the jurisdictional characterization of some of our
    assets by federal, state or local regulatory agencies or a
    change in policy by those agencies may result in increased
    regulation of our assets, which may cause our revenues to
    decline and operating expenses to increase.
     17




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Form 10-K
  We are
    subject to compliance with stringent environmental laws and
    regulations that may expose us to significant costs and
    liabilities.
        
    the federal Clean Air Act and comparable state laws and
    regulations that impose obligations related to air emissions;
    the federal Clean Water Act and comparable state laws and
    regulations that impose obligations related to discharges of
    pollutants into regulated bodies of water;
    the federal Resource Conservation and Recovery Act, or RCRA, and
    comparable state laws that impose requirements for the handling
    and disposal of waste from our facilities; and
    the Comprehensive Environmental Response, Compensation and
    Liability Act of 1980, or CERCLA, also known as
    Superfund, and comparable state laws that regulate
    the cleanup of hazardous substances that may have been released
    at properties currently or previously owned or operated by us or
    at locations to which we have sent waste for disposal.     18




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Form 10-K
  Our
    construction of new assets may not result in revenue increases
    and is subject to regulatory, environmental, political, legal
    and economic risks, which could adversely affect our results of
    operations and financial condition.
    If we
    do not make acquisitions on economically acceptable terms, our
    future growth will be limited.
     19




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
    mistaken assumptions about future prices, volumes, revenues and
    costs of oil and natural gas, including synergies and estimates
    of the oil and natural gas reserves attributable to a property
    we acquire;
    an inability to integrate successfully the businesses we acquire;
    inadequate expertise for new geographic areas, operations or
    products and services;
    the assumption of unknown liabilities;
    limitations on rights to indemnity from the seller;
    mistaken assumptions about the overall costs of equity or debt;
    the diversion of managements and employees attention
    from other business concerns;
    unforeseen difficulties operating in new product areas or new
    geographic areas;
    customer or key employee losses at the acquired
    businesses; and
    establishment of internal controls and procedures that we are
    required to maintain under the Sarbanes-Oxley Act of 2002.    Our
    ability to derive benefits from our acquisitions will depend on
    our ability to integrate operations to achieve the benefits of
    the acquisitions.
    
    geographically separated organizations and possible differences
    in corporate cultures and management philosophies;
    significant demands on management resources, which may distract
    managements attention from day-to-day business;
    differences in the disclosure systems, accounting systems, and
    accounting controls and procedures of the two companies, which
    may interfere with our ability to make timely and accurate
    public disclosure; and
    the demands of managing new lines of business acquired. 20




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We do
    not own all of the land on which our pipelines and facilities
    are located, which could disrupt our operations.
  and/or
  Our
    business involves many hazards and operational risks, some of
    which may not be fully covered by insurance. If a significant
    accident or event occurs that is not fully insured or interrupts
    normal operations, our operations and financial results could be
    adversely affected.
    
    damage to production equipment, pipelines and plants, related
    equipment and surrounding properties caused by hurricanes,
    tornadoes, floods, fires and other natural disasters and acts of
    terrorism;
    inadvertent damage from construction, farm and utility equipment;
    leaks of natural gas, NGLs and other hydrocarbons or losses of
    natural gas or NGLs as a result of the malfunction of pipeline,
    equipment or facilities;
    fires and explosions; and
    other hazards that could also result in personal injury and loss
    of life, pollution and suspension of operations, such as the
    uncontrollable flow of oil or natural gas or well fluids.  and/or
   21




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Our
    current debt levels may limit our flexibility in obtaining
    additional financing and in pursuing other business
    opportunities. In addition, we may incur substantial debt in the
    future to enable us to maintain or increase our reserve and
    production levels and to otherwise pursue our business plan.
    This debt may restrict our ability to make
    distributions.
    
    our ability to obtain additional financing, if necessary, for
    working capital, capital expenditures, acquisitions or other
    purposes may be impaired or such financing may not be available
    on favorable terms;
    we will need a portion of our cash flow to make interest
    payments on our debt, reducing the funds that would otherwise be
    available for operations, future business opportunities and
    distributions to unitholders;
    our debt level will make us more vulnerable to competitive
    pressures or a downturn in our business or the economy
    generally; and
    our debt level may limit our flexibility in responding to
    changing business and economic conditions.      Shortages
    of drilling rigs, equipment and crews could delay our operations
    and reduce our cash available for distribution.
   22




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Our
    and other operators drilling operations may be curtailed,
    delayed or cancelled as a result of a variety of
    factors.
    
    unexpected drilling conditions;
    drilling, production or transportation facility or equipment
    failure or accidents;
    shortages or delays in the availability of drilling rigs and
    other services and equipment;
    adverse weather conditions;
    compliance with environmental and governmental requirements;
    title problems;
    unusual or unexpected geological formations;
    pipeline ruptures;
    fires, blowouts, craterings and explosions; and
    uncontrollable flows of oil or natural gas or well fluids.      Restrictions
    in our amended and restated credit facility limit our ability to
    make distributions and limit our ability to capitalize on
    acquisitions and other business opportunities.
    Increases
    in interest rates, which have recently experienced record lows,
    could adversely impact our unit price and our ability to issue
    additional equity, to incur debt to make acquisitions or for
    other purposes or to make cash distributions at our intended
    levels.
   23




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##### Table of Contents



Due to
    our limited industry and geographic diversification in our
    midstream operations and in our upstream operated properties,
    adverse developments in our operations or operating areas would
    reduce our ability to make distributions to our
    unitholders.
    We are
    exposed to the credit risks of our key producer customers, and
    any material nonpayment or nonperformance by our key producer
    customers could reduce our ability to make distributions to our
    unitholders.
    Terrorist
    attacks, and the threat of terrorist attacks, have resulted in
    increased costs to our business. Continued hostilities in the
    Middle East or other sustained military campaigns may adversely
    impact our results of operations.
      If we
    fail to develop or maintain an effective system of internal
    controls, we may not be able to report our financial results
    accurately or prevent fraud.
 
   
 24




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##### Table of Contents



Risks
    Inherent in an Investment in Us
  We may
    not have sufficient cash from operations following the
    establishment of cash reserves and payment of fees and expenses,
    including cost reimbursements to our general partner, to enable
    us to make cash distributions to holders of our common units and
    subordinated units at the initial distribution rate under our
    cash distribution policy.
    
    the fees we charge and the margins we realize for our services;
    the prices and level of production of and demand for, oil,
    natural gas, NGLs and condensate that we and others produce;
    the volume of natural gas we gather, treat, compress, process,
    transport and sell, the volume of NGLs we transport and sell,
    and the volume of oil and natural gas we and others produce;
    our operators and other producers drilling
    activities and success of such programs;
    the level of competition from other upstream and midstream
    energy companies;
    the level of our operating and maintenance and general and
    administrative costs;
    the relationship between oil, natural gas and NGL
    prices; and
    prevailing economic conditions.    
    the level of capital expenditures we make;
    the cost of acquisitions;
    our debt service requirements and other liabilities;
    fluctuations in our working capital needs;
    our ability to borrow funds and access capital markets;
    restrictions contained in our debt agreements; and
    the amount of cash reserves established by our general partner. 25




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##### Table of Contents



The
    amount of cash we have available for distribution to holders of
    our common units and subordinated units depends primarily on our
    cash flow and not solely on profitability.
   
   
   
  Eagle
    Rock Holdings, L.P., owns a 31.8% limited partner interest in us
    and will control our general partner, which has sole
    responsibility for conducting our business and managing our
    operations. Our general partner has conflicts of interest, which
    may permit it to favor its own interests.
 
    
    neither our partnership agreement nor any other agreement
    requires the NGP Investors to pursue a business strategy that
    favors us;
    our general partner is allowed to take into account the
    interests of parties other than us in resolving conflicts of
    interest;
    the NGP Investors and its affiliates are not limited in their
    ability to compete with us;
    our general partner has limited its liability and reduced its
    fiduciary duties, and has also restricted the remedies available
    to our unitholders for actions that, without the limitations,
    might constitute breaches of fiduciary duty;
    our general partner determines the amount and timing of asset
    purchases and sales, borrowings, issuance of additional
    partnership securities and reserves, each of which can affect
    the amount of cash that is distributed to unitholders;
    our general partner determines the amount and timing of any
    capital expenditures and whether a capital expenditure is a
    maintenance capital expenditure, which reduces operating
    surplus, or an expansion capital expenditure, which does not
    reduce operating surplus. This determination can affect the
    amount of cash that is distributed to our unitholders and the
    ability of the subordinated units to convert to common units;
    our general partner determines which costs incurred by it and
    its affiliates are reimbursable by us; 26




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##### Table of Contents




    our partnership agreement does not restrict our general partner
    from causing us to pay it or its affiliates for any services
    rendered to us or entering into additional contractual
    arrangements with any of these entities on our behalf;
    our general partner intends to limit its liability regarding our
    contractual and other obligations and, in some circumstances, is
    entitled to be indemnified by us;
    our general partner may exercise its limited right to call and
    purchase common units if it and its affiliates own more than 80%
    of the common units;
    our general partner controls the enforcement of obligations owed
    to us by our general partner and its affiliates; and
    our general partner decides whether to retain separate counsel,
    accountants or others to perform services for us.  Affiliates
    of our general partner are not limited in their ability to
    compete with us, which could cause conflicts of interest and
    limit our ability to acquire additional assets, drilling
    opportunities or businesses which in turn could adversely affect
    our results of operations and cash available for distribution to
    our unitholders.
    Cost
    reimbursements due to our general partner and its affiliates for
    services provided, which will be determined by our general
    partner, will be substantial and will reduce our cash available
    for distribution.
    Our
    general partner intends to limit its liability regarding our
    obligations.
    Our
    partnership agreement requires that we distribute all of our
    available cash, which could limit our ability to grow and make
    acquisitions.
   27




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##### Table of Contents



Our
    partnership agreement limits our general partners
    fiduciary duties to holders of our common units and subordinated
    units.
    
    its limited call right;
    its voting rights with respect to the units it owns;
    its registration rights; and
    and its determination whether or not to consent to any merger or
    consolidation of the partnership or amendment to the partnership
    agreement.  Our
    partnership agreement restricts the remedies available to
    holders of our common units and subordinated units for actions
    taken by our general partner that might otherwise constitute
    breaches of fiduciary duty.
    
    provides that whenever our general partner makes a determination
    or takes, or declines to take, any other action in its capacity
    as our general partner, our general partner is required to make
    such determination, or take or decline to take such other action
    in good faith, and our general partner will not be subject to
    any other or different standard imposed by our partnership
    agreement, Delaware law or any other law, rule or regulation or
    at equity;
    provides that our general partner will not have any liability to
    us or our unitholders for decisions made in its capacity as a
    general partner so long as it acted in good faith, and our
    partnership agreement specifies that the satisfaction of this
    standard requires that our general partner must believe that the
    decision is in the best interests of our partnership;
    provides that our general partner and its officers and directors
    will not be liable for monetary damages to us, our limited
    partners or assignees for any acts or omissions unless there has
    been a final and non-appealable judgment entered by a court of
    competent jurisdiction determining that the general partner or
    those other persons acted in bad faith or engaged in fraud or
    willful misconduct or, in the case of a criminal matter, acted
    with knowledge that the conduct was criminal; and 28




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##### Table of Contents




    provides that our general partner will not be in breach of its
    obligations under the partnership agreement or its fiduciary
    duties to us or our unitholders if the resolution of a conflict
    is:
    approved by the conflicts committee of our general partner,
    although our general partner is not obligated to seek such
    approval;
    approved by the vote of a majority of the outstanding common
    units, excluding any common units owned by our general partner
    or any of its affiliates;
    on terms no less favorable to us than those generally being
    provided to or available from unrelated third parties; or
    fair and reasonable to us, taking into account the totality of
    the relationships among the parties involved, including other
    transactions that may be particularly favorable or advantageous
    to us.    Holders
    of our common units have limited voting rights and are not
    entitled to elect our general partner or its
    directors.
    Our
    partnership agreement restricts the voting rights of unitholders
    owning 20% or more of our common units.
    Control
    of our general partner may be transferred to a third party
    without unitholder consent.
   29




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##### Table of Contents



We may
    issue additional units without limited partner approval, which
    would dilute ownership interests.
    
    our unitholders proportionate ownership interest in us
    will decrease;
    the amount of cash available for distribution on each unit may
    decrease;
    because a lower percentage of total outstanding units will be
    subordinated units, the risk that a shortfall in the payment of
    the minimum quarterly distribution will be borne by our common
    unitholders will increase;
    the ratio of taxable income to distributions may increase;
    the relative voting strength of each previously outstanding unit
    may be diminished; and
    the market price of the common units may decline.  Affiliates
    of our general partner, certain private investors and employees,
    may sell common units in the public markets, which sales could
    have an adverse impact on the trading price of the common
    units.
 
  lock-up
 
  Our
    general partner has a limited call right that may require
    limited partners to sell their units at an undesirable time or
    price.
 
   
  Liability
    of a limited partner may not be limited if a court finds that
    unitholder action constitutes control of our
    business.
   30




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##### Table of Contents




    a court or government agency determined that we were conducting
    business in a state but had not complied with that particular
    states partnership statute; or
    the right to act with other unitholders to remove or replace the
    general partner, to approve some amendments to our partnership
    agreement or to take other actions under our partnership
    agreement constitute control of our business.  Unitholders
    may have liability to repay distributions that were wrongfully
    distributed to them.
  Section 17-607
  The
    price of our common units may fluctuate
    significantly.
      
    our quarterly distributions;
    our quarterly or annual earnings or those of other companies in
    our industry;
    loss of a large customer;
    announcements by us or our competitors of significant contracts
    or acquisitions or change in management;
    changes in accounting standards, policies, guidance,
    interpretations or principles;
    general economic conditions;
    the failure of securities analysts to cover our common units or
    changes in financial estimates by analysts;
    future sales of our common units; and
    other factors described in these Risk Factors.  We
    will incur increased costs as a result of being a publicly
    traded partnership.
   31




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##### Table of Contents



Tax Risks
    to Common Unitholders
  The
    tax efficiency of our partnership structure depends on our
    status as a partnership for federal income tax purposes, as well
    as our not being subject to a material amount of entity-level
    taxation by individual states. If the Internal Revenue Service
    were to treat us as a corporation or if we become subject to a
    material amount of entity-level taxation for state tax purposes,
    it would reduce the amount of cash available for
    distribution.
        If the
    IRS contests the federal income tax positions we take, the
    market for our common units may be adversely impacted and the
    cost of any IRS contest will reduce our cash available for
    distribution.
   32




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##### Table of Contents



Limited
    partners may be required to pay taxes on their share of our
    income even if they do not receive any cash distributions from
    us.
    Tax
    gain or loss on disposition of our common units could be more or
    less than expected.
    Tax-exempt
    entities and foreign persons face unique tax issues from owning
    common units that may result in adverse tax consequences to
    them.
  non-U.S. persons non-U.S. persons non-U.S. persons
  We
    will treat each purchaser of our common units as having the same
    tax benefits without regard to the actual common units
    purchased. The IRS may challenge this treatment, which could
    adversely affect the value of the common units.
    The
    sale or exchange of 50% or more of our capital and profits
    interests during any twelve-month period will result in the
    termination of our partnership for federal income tax
    purposes.
   33




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##### Table of Contents



Limited
    partners will likely be subject to state and local taxes and
    return filing requirements in states where they do not live as a
    result of investing in our common units.
   34




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##### Table of Contents



USE
    OF PROCEEDS
    CAPITALIZATION
      As of June 30,2007HistoricalCash

$
13.0Debt

$
422.1Total partners capital

$
542.9Total capitalization

$
965.0   Price
    Range of Common Units and Distributions
    DistributionQuarter Ended

High


Low


per Unit


Record Date


Payment DateDecember 31, 2006

$
20.70


$
17.50


$
0.27
(1)


Feb. 7, 2007



Feb. 15, 2007March 31, 2007

$
20.88


$
18.56


$
0.3625



May 7, 2007



May 15, 2007June 30, 2007

$
25.62


$
20.50


$
0.3625



August 8, 2007



Aug. 14, 2007     (1)
    
    Represents a prorated distribution to the common unitholders
    from the IPO date of October 24, 2006 through
    December 31, 2006.   
   
 35




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##### Table of Contents



OUR
    CASH DISTRIBUTION POLICY AND RESTRICTIONS ON
    DISTRIBUTIONS
 
  should read the following discussion of our cash
    distribution policy in conjunction with the specific assumptions
    included in this section. For more detailed information
    regarding the factors and assumptions upon which our cash
    distribution policy is based, please read Summary of
    Significant Accounting Policies and Forecast Assumptions
    below. In addition, you should read Forward-Looking
    Statements and Risk Factors starting on
    page 11 for information regarding statements that do not
    relate strictly to historical or current facts and certain risks
    inherent in our business.
 
  For additional information regarding our historical operating
    results, you should refer to our historical financial statements
    for the ended December 31, 2004, 2005 and 2006
    in our Annual Report on
    Form 10-K
    for the year ended December 31, 2006 and on
    Form 10-K/A
    for the year ended December 31, 2006 and our Quarterly
    Reports on
    Form 10-Q
    for the quarters ended March 31, 2007 and June 30,
    2007, incorporated by reference into this prospectus.
  General
  Rationale for Our Cash Distribution
    Policy.
  Limitations on Cash Distributions; Our Ability to Change Our
    Cash Distribution Policy.
  
    Restrictions contained in our amended and restated credit
    facility limit our ability to make distributions. Specifically,
    our amended and restated credit facility contains material
    financial tests and covenants that we must satisfy. These
    financial tests and covenants are described in this prospectus
    under the caption Managements Discussion and
    Analysis of Financial Condition and Results of
    Operations  Capital Requirements in our Annual
    Report on
    Form 10-K
    for the year ended December 31, 2006. Should we be unable
    to satisfy these restrictions or if we are otherwise in default
    under our amended and restated credit facility, we would be
    prohibited from making cash distributions to you notwithstanding
    our stated cash distribution policy.
    The board of directors of our general partner will have the
    authority to make all determinations related to the
    reimbursement of expenses incurred by the general partner and
    its affiliates and the establishment of reserves for the prudent
    conduct of our business and for future cash distributions to our
    unitholders. Our partnership agreement provides that our general
    partner will be entitled to make these determinations subject
    only to the requirement that it act in good faith. The
    reimbursement of expenses incurred by our general partner and
    its affiliates and the establishment of those reserves could
    result in a reduction in cash distributions to you from levels
    we currently anticipate pursuant to our stated distribution
    policy.
    Even if our cash distribution policy is not modified or revoked,
    the amount of distributions we pay under our cash distribution
    policy and the decision to make any distribution is determined
    by our general partner, taking into consideration the terms of
    our partnership agreement.
    Under
    Section 17-607
    of the Delaware Revised Uniform Limited Partnership Act, we may
    not make a distribution to you if the distribution would cause
    our liabilities to exceed the fair value of our assets.
    We may lack sufficient cash to pay distributions to our
    unitholders due to increases in our general and administrative
    expense, principal and interest payments on our outstanding
    debt, tax expenses including 36




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##### Table of Contents



the new entity-level taxation in the State of Texas, working
    capital requirements and anticipated cash needs.  Our Ability to Grow is Dependent on Our Ability to Access
    External Expansion Capital.
  Our
    Initial Distribution Rate
      
    less the amount of cash reserves established by our general
    partner to:
    provide for the proper conduct of our business;
    comply with applicable law, any of our debt instruments or other
    agreements; or
    provide funds for distributions to our unitholders and to our
    general partner for any one or more of the next four quarters;
    plus, if our general partner so determines, all or a portion of
    cash on hand on the date of determination of available cash for
    the quarter.        37




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##### Table of Contents



Minimum QuarterlyNumber of


DistributionsUnits


One Quarter


Four Quarters($ in thousands)Publicly held common units


13,963,785


$
5,062


$
20,247Common units held by private investors, including the selling
    unitholders


34,482,064



12,500



50,000Common units held by Eagle Rock Holdings, L.P.


2,187,871



793



3,172Subordinated units held by Eagle Rock Holdings, L.P.


20,691,495



7,501



30,003Restricted units issued under LTIP


527,221



191



7641.16% general partner interest(a)


844,551



306



1,225Total


72,696,987


$
26,353


$
105,411  
   
  (a)
    
    Assumes the general partners current 1.16% interest, which
    reflects the amount of restricted units currently outstanding
    under our LTIP, remains the same. The general partners
    current 1.16% interest in these distributions will be reduced if
    we issue additional units in the future and our general partner
    does not elect to contribute a proportionate amount of capital
    to us to maintain its current 1.16% general partner interest. 
           38




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##### Table of Contents



PROVISIONS
    OF OUR PARTNERSHIP
    AGREEMENT RELATING TO CASH DISTRIBUTIONS
    Distributions
    of Available Cash
  General.
  Definition of Available Cash.
  
    less the amount of cash reserves established by our general
    partner to:  
    provide for the proper conduct of our business;
    comply with applicable law, any of our debt instruments or other
    agreements; or
    provide funds for distributions to our unitholders and to our
    general partner for any one or more of the next four quarters;  
    plus, if our general partner so determines, all or a portion of
    cash on hand on the date of determination of available cash for
    the quarter.  Intent to Distribute the Minimum Quarterly
    Distribution.
 39




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##### Table of Contents



Form 10-K
 
  General Partner Interest and Incentive Distribution
    Rights.
 
    Operating
    Surplus and Capital Surplus
  General.
  Operating Surplus.
  
    an amount equal to four times the amount needed for any one
    quarter for us to pay a distribution on all of our units
    (including the general partner units) and the incentive
    distribution rights at the same
    per-unit
    amount as was distributed in the immediately preceding quarter
    (or with respect to the period commencing on the closing of our
    initial public offering and ending on December 31, 2006, it
    means the product of (a)(i) $1.45 multiplied by (ii) a
    fraction of which the numerator is the number of days in such
    period and the denominator is 92 multiplied by (b) the
    number of common units, subordinated units and general partner
    units outstanding on the record date with respect to such
    period, and with respect to the quarter ending March 31,
    2007, it means the product of (a) $1.45 and (b) the
    number of common units, subordinated units and general partner
    units outstanding on the record date with respect to such
    quarter); plus
    all of our cash receipts after the closing of our initial public
    offering, excluding cash from borrowings, sales of equity and
    debt securities, sales or other dispositions of assets outside
    the ordinary course of business, the termination of interest
    rate swap agreements, capital contributions or corporate
    reorganizations or restructurings; less
    all of our operating expenditures after the closing of our
    initial public offering, including maintenance capital
    expenditures, but excluding the repayment of borrowings (other
    than working capital borrowings) and growth capital expenditures
    or transaction expenses (including taxes) related to interim
    capital transactions; less
    the amount of cash reserves established by our general partner
    to provide funds for future operating expenditures.   40




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##### Table of Contents



Capital Surplus.
  
    borrowings;
    sales of our equity and debt securities; and
    sales or other dispositions of assets for cash, other than
    inventory, accounts receivable and other current assets sold in
    the ordinary course of business or as part of normal retirement
    or replacement of assets.  Characterization of Cash Distributions. per-unit
  Subordination
    Period
  General.
 41




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##### Table of Contents



Subordination Period.
  
    distributions of available cash from operating surplus on each
    of the outstanding common units, subordinated units and general
    partner units equaled or exceeded the minimum quarterly
    distribution for each of the three consecutive, non-overlapping
    four-quarter periods immediately preceding that date;
    the adjusted operating surplus (as defined below)
    generated during each of the three consecutive, non-overlapping
    four-quarter periods immediately preceding that date equaled or
    exceeded the sum of the minimum quarterly distributions on all
    of the outstanding common and subordinated units and general
    partner units during those periods on a fully diluted basis
    during those periods; and
    there are no arrearages in payment of the minimum quarterly
    distribution on the common units.    
    distributions of available cash from operating surplus on each
    of the outstanding common and subordinated units equaled or
    exceeded $0.5438 per quarter (150% of the minimum quarterly
    distribution) for the four-quarter period immediately preceding
    the date;
    the adjusted operating surplus (as defined below)
    generated during the four-quarter period immediately preceding
    the date equaled or exceeded the sum of $0.5438 (150% of the
    minimum quarterly distribution) on each of the outstanding
    common and subordinated units during that period on a fully
    diluted basis and on the related general partner interest during
    those periods; and
    there are no arrearages in payment of the minimum quarterly
    distributions on the common units.    
    the subordination period will end and each subordinated unit
    will immediately convert into one common unit;
    any existing arrearages in payment of the minimum quarterly
    distribution on the common units will be extinguished; and
    our general partner will have the right to convert its general
    partner units and its incentive distribution rights into common
    units or to receive cash in exchange for those interests.  Adjusted Operating Surplus.
  
    operating surplus generated with respect to that period
    (excluding any amounts attributable to the item described in the
    first bullet point under  Operating Surplus and
    Capital Surplus  Operating Surplus above); plus
    any net decrease made in subsequent periods in cash reserves for
    operating expenditures initially established with respect to
    that period; less
    any net decrease in cash reserves for operating expenditures
    with respect to that period not relating to an operating
    expenditure made with respect to that period; plus
    any net increase in cash reserves for operating expenditures
    with respect to that period required by any debt instrument for
    the repayment of principal, interest or premium. 42




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##### Table of Contents



Distributions
    of Available Cash from Operating Surplus during the
    Subordination Period
 
   
 
  
    first, 98.84% to the common unitholders, pro rata, and
    1.16% to the general partner, until we distribute for each
    outstanding common unit an amount equal to the minimum quarterly
    distribution for that quarter; 
 
  
    second, 98.84% to the common unitholders, pro rata, and
    1.16% to the general partner, until we distribute for each
    outstanding common unit an amount equal to any arrearages in
    payment of the minimum quarterly distribution on the common
    units for any prior quarters during the subordination period; 
 
  
    third, 98.84% to the subordinated unitholders, pro rata,
    and 1.16% to the general partner, until we distribute for each
    subordinated unit an amount equal to the minimum quarterly
    distribution for that quarter; and 
  
    thereafter, in the manner described in General
    Partner Interest and Incentive Distribution Rights below. 
   
  Distributions
    of Available Cash from Operating Surplus after the Subordination
    Period
 
   
 
  
    first, 98.84% to all unitholders, pro rata, and 1.16% to
    the general partner, until we distribute for each outstanding
    unit an amount equal to the minimum quarterly distribution for
    that quarter; and 
  
    thereafter, in the manner described in General
    Partner Interest and Incentive Distribution Rights below. 
   
  General
    Partner Interest and Incentive Distribution Rights
 
   
   43




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##### Table of Contents




    we have distributed available cash from operating surplus to the
    common and subordinated unitholders in an amount equal to the
    minimum quarterly distribution; and 
  
    we have distributed available cash from operating surplus on
    outstanding common units in an amount necessary to eliminate any
    cumulative arrearages in payment of the minimum quarterly
    distribution; then, our partnership agreement requires that we
    distribute any additional available cash from operating surplus
    for that quarter among the unitholders and the general partner
    in the following manner (assuming a 1.16% general partner
    interest): 
 
  
    first, 98.84% to all unitholders, pro rata, and 1.16% to
    the general partner, until each unitholder receives a total of
    $0.4169 per unit for that quarter (the first target
    distribution); 
 
  
    second, 85.84% to all unitholders, pro rata, and 14.16%
    to the general partner, until each unitholder receives a total
    of $0.4531 per unit for that quarter (the second target
    distribution); 
 
  
    third, 75.84% to all unitholders, pro rata, and 24.16% to
    the general partner, until each unitholder receives a total of
    $0.5438 per unit for that quarter (the third target
    distribution); and 
 
  
    thereafter, 50.84% to all unitholders, pro rata, and
    49.16% to the general partner. 
  Percentage
    Allocations of Available Cash from Operating Surplus
 
   
  
 Total Quarterly

Marginal PercentageDistribution per Unit

Interest in Distributions*Target Amount

Unitholders


General PartnerMinimum Quarterly Distribution

$0.3625


98.84
%


1.16
%First Target Distribution

up to $0.4169


98.84
%


1.16
%Second Target Distribution

above $0.4169 up to $0.4531


85.84
%


14.16
%Third Target Distribution

above $0.4531 up to $0.5438


75.84
%


24.16
%Thereafter

above $0.5438


50.84
%


49.16
%  
   
  *
    
    Assuming there are no arrearages on common units and that our
    general partner maintains its current 1.16% general partner
    interest and continues to own the incentive distribution rights. 
 44




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##### Table of Contents



Distributions
    from Capital Surplus
  How Distributions from Capital Surplus Will Be
    Made.
 
  
    first, 98.84% to all unitholders, pro rata, and 1.16% to
    the general partner, until we distribute for each common unit
    that was issued in our initial public offering, an amount of
    available cash from capital surplus equal to the initial public
    offering price; 
 
  
    second, 98.84% to the common unitholders, pro rata, and
    1.16% to the general partner, until we distribute for each
    common unit, an amount of available cash from capital surplus
    equal to any unpaid arrearages in payment of the minimum
    quarterly distribution on the common units; and 
  
    thereafter, we will make all distributions of available
    cash from capital surplus as if they were from operating surplus.  Effect of a Distribution from Capital
    Surplus.
 
   
  Adjustment
    to the Minimum Quarterly Distribution and Target Distribution
    Levels
    
    the minimum quarterly distribution;
    target distribution levels;
    the unrecovered initial unit price;
    the number of common units issuable during the subordination
    period without a unitholder vote; and
    the number of common units into which a subordinated unit is
    convertible.     45




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##### Table of Contents



Distributions
    of Cash Upon Liquidation
  General.
   
  Manner of Adjustments for Gain.
 
  
    first, to the general partner and the holders of units
    who have negative balances in their capital accounts to the
    extent of and in proportion to those negative balances; 
  
    second, 98.84% to the common unitholders, pro rata, and
    1.16% to the general partner, until the capital account for each
    common unit is equal to the sum of: (1) the unrecovered
    initial unit price; (2) the amount of the minimum quarterly
    distribution for the quarter during which our liquidation
    occurs; and (3) any unpaid arrearages in payment of the
    minimum quarterly distribution; 
 
  
    third, 98.84% to the subordinated unitholders, pro rata,
    and 1.16% to the general partner until the capital account for
    each subordinated unit is equal to the sum of: (1) the
    unrecovered initial unit price; and (2) the amount of the
    minimum quarterly distribution for the quarter during which our
    liquidation occurs; 
 
  
    fourth, 98.84% to all unitholders, pro rata, and 1.16% to
    the general partner, until we allocate under this paragraph an
    amount per unit equal to: (1) the sum of the excess of the
    first target distribution per unit over the minimum quarterly
    distribution per unit for each quarter of our existence; less
    (2) the cumulative amount per unit of any distributions of
    available cash from operating surplus in excess of the minimum
    quarterly distribution per unit that we distributed 98.84% to
    the unitholders, pro rata, and 1.16% to the general partner, for
    each quarter of our existence; 
 
  
    fifth, 85.84% to all unitholders, pro rata, and 14.16% to
    the general partner, until we allocate under this paragraph an
    amount per unit equal to: (1) the sum of the excess of the
    second target distribution per unit over the first target
    distribution per unit for each quarter of our existence; less
    (2) the cumulative amount per unit of any distributions of
    available cash from operating surplus in excess of the first
    target distribution per unit that we distributed 85.84% to the
    unitholders, pro rata, and 14.16% to the general partner for
    each quarter of our existence; 
 
  
    sixth, 75.84% to all unitholders, pro rata, and 24.16% to
    the general partner, until we allocate under this paragraph an
    amount per unit equal to: (1) the sum of the excess of the
    third target distribution per unit 
 46




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##### Table of Contents



over the second target distribution per unit for each quarter
    of our existence; less (2) the cumulative amount per unit
    of any distributions of available cash from operating surplus in
    excess of the second target distribution per unit that we
    distributed 75.84% to the unitholders, pro rata, and 24.16% to
    the general partner for each quarter of our existence; and 
 
  
    thereafter, 50.84% to all unitholders, pro rata, and
    49.16% to the general partner. 
 
   
   
  Manner of Adjustments for Losses.
 
 
  
    first, 98.84% to holders of subordinated units in
    proportion to the positive balances in their capital accounts
    and 1.16% to the general partner, until the capital accounts of
    the subordinated unitholders have been reduced to zero; 
 
  
    second, 98.84% to the holders of common units in
    proportion to the positive balances in their capital accounts
    and 1.16% to the general partner, until the capital accounts of
    the common unitholders have been reduced to zero; and 
  
    thereafter, 100% to the general partner.    Adjustments to Capital Accounts.
 47




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##### Table of Contents



SELECTED
    HISTORICAL FINANCIAL DATA
      
    On December 5, 2003, Eagle Rock Pipeline commenced
    operations by acquiring the Dry Trail plant from Williams Field
    Service Company for approximately $18.0 million, and in
    July 2004, Eagle Rock Pipeline sold the Dry Trail Plant to
    Celero Energy, L.P. for approximately $37.4 million,
    resulting in a pre-tax realized gain in the disposition of
    approximately $19.5 million in 2004. The Dry Trail
    operations are reflected as discontinued operations for Eagle
    Rock Pipeline for 2003 and 2004.
    The purchase price paid in connection with the acquisition of
    Eagle Rock Predecessor on December 1, 2005 was pushed
    down to the financial statements of Eagle Rock Energy
    Partners, L.P. As a result of this push-down
    accounting, the book basis of our assets was increased to
    reflect the purchase price, which had the effect of increasing
    our depreciation expense.
    In connection with our acquisition of the Eagle Rock
    Predecessor, our interest expense subsequent to December 1,
    2005 increased due to the increased debt incurred.
    After our acquisition of Eagle Rock Predecessor, we initiated a
    risk management program comprised of NGL puts, costless collars
    and swaps, crude costless collars and natural gas calls, as well
    as interest rate swaps that we accounted for using
    mark-to-market accounting. The amounts related to commodity
    hedges are included in unrealized/realized gain(loss)
    derivatives gains (losses) and the amounts related to interest
    rate swaps are included in interest expenses (income).
    The historical results of Eagle Rock Predecessor do not include
    the financial results of our existing southeast Texas assets
    (Indian Springs, Camp Ruby and Live Oak County assets).
    Our historical financial results for periods prior to
    December 31, 2005 do not include the full financial results
    from the operation of the Tyler County pipeline.
    On March 27, 2006, Eagle Rock Pipeline completed a private
    placement of 5,455,050 common units for $98.3 million.
    On March 31, 2006 and April 7, 2006, a wholly-owned
    subsidiary of Eagle Rock Energy Partners, L.P. acquired certain
    natural gas gathering and processing assets from Duke Energy
    Field Services, L.P. and Swift Energy Corporation, consisting of
    the Brookeland gathering system and processing plant, the
    Masters Creek gathering system and the Jasper NGL pipeline. We
    refer to this acquisition as the Brookeland/Masters Creek
    acquisition. As a result, our historical financial results for
    the periods prior to March 31, 2006 do not include the
    financial results from the operation of these assets.
    In June 2006, we purchased all of the partnership interests in
    Midstream Gas Services, L.P., which we refer to as the MGS
    acquisition, for approximately $4.7 million in cash and
    1,125,416 common units in Eagle Rock Pipeline. As a result,
    financial periods for the periods prior to June 2006 do not
    include the financial results from the operation of these assets.
    On April 30, 2007, we acquired certain fee minerals,
    royalties and working interest properties from Montierra
    Minerals & Production, L.P. and NGP-VII Income
    Co-Investment Opportunities, L.P., which 48




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##### Table of Contents



we refer to as the Montierra Acquisition, for 6,390,400 of our
    common units and $6 million in cash. As a result, financial
    periods for the periods prior to May 2007 do not include the
    financial results from these assets.  
    On May 3, 2007, we acquired Laser Midstream Energy, L.P.
    and certain of its subsidiaries, which we refer to as the Laser
    Acquisition, for $110.0 million in cash and 1,407,895 of
    our common units. As a result, financial periods for the periods
    prior to May 2007 do not include the financial results from
    these assets.
    On May 3, 2007, we completed the private placement of
    7,005,495 common units for $127.5 million.
    On June 18, 2007, we acquired certain fee minerals and
    royalties from MacLondon Energy, L.P., which we refer to as the
    MacLondon Acquisition, for 789,474 of our common units. As a
    result, financial periods for the periods prior to June 2007 do
    not include the financial results from these assets.    interest-net,
 49




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##### Table of Contents



Eagle Rock Predecessor


Eagle Rock Pipeline, L.P.


Eagle Rock Energy Partners, L.P.Period from























Six


SixJanuary 1,


Year


Year


Year


Year


Year


Year


Year


Months


Months2005 to


Ended


Ended


Ended


Ended


Ended


Ended


Ended


Ended


EndedNovember 30,


December 31,


December 31,


December 31,


December 31,


December 31,


December 31,


December 31,


June 30,


June 30,2005


2004


2003


2002


2005(1)


2004


2003


2006


2006


2007($ in thousands, except per unit)Statement of Operations Data:Operating revenues

$
396,953


$
335,519


$
297,290


$
194,898


$
66,382


$
10,636


$



$
502,394


$
246,445


$
341,675Unrealized derivative gains/(losses)


















7,308











(26,306
)


(35,241
)


(34,897
)Realized derivative gains






























2,302







Total operating revenues


396,953



335,519



297,290



194,898



73,690



10,636







478,390



211,204



306,778Cost of natural gas and NGLs


316,979



263,840



249,284



155,757



55,272



8,811







377,580



188,236



280,575Operating and maintenance expense


27,518



27,427



23,905



22,276



2,955



34







32,905



14,798



19,320General and administrative expense


















4,765



2,406



144



13,161



6,010



10,821Other operating






































1,711Advisory termination fee






























6,000







Depreciation and amortization expense


8,157



8,268



7,187



7,457



4,088



619







43,220



20,215



25,779Operating Income (loss)


44,299



35,984



16,914



9,408



6,610



(1,234
)


(144
)


5,524



(18,055
)


(31,428
)Interest (income) expense


(859
)


(646
)


(189
)






4,031











28,604



5,923



9,728Other (income)


(17
)


(23
)


(52
)


(944
)


(171
)


(24
)






(996
)






1,875Income (loss) before income taxes


45,175



36,653



17,155



10,352



2,750



(1,210
)


(144
)


(22,084
)


(23,978
)


(43,031
)Income tax provision


15,811



12,731



6,071



(6,465
)














1,230



508



420Income (loss) from continuing operations


29,364



23,922



11,084



16,817



2,750



(1,210
)


(144
)


(23,314
)


(24,486
)


(43,451
)Discontinued operations






















22,192



533











Cumulative effect of change in accounting principle










227



























Net income (loss)

$
29,364


$
23,922


$
10,857


$
16,817


$
2,750


$
20,982


$
389


$
(23,314
)

$
(24,486
)

$
(43,451
)Loss per common unit

$



$



$



$



$



$



$



$
(1.26
)

$
(0.91
)

$
(0.55
)Balance Sheet Data (at period end):Property plant and equipment, net

$
242,487


$
243,939


$
246,640


$
248,624


$
441,588


$
19,564


$
18,529


$
554,063


$
532,938


$
832,857Total assets


376,447



304,631



259,577



339,489



700,659



28,017



21,379



779,901



769,119



1,141,924Long-term debt


















408,466







14,221



405,731



395,000



422,131Net equity


233,708



204,344



180,422



159,281



208,096



27,655



6,629



291,987



301,447



542,934Cash Flow Data:Net cash flows provided by (used in):Operating activities

$
47,603


$
41,813


$
32,219


$
13,326


$
(1,667
)

$
3,652


$
(337
)

$
54,992


$
15,047


$
28,119Investing activities


(6,708
)


(5,567
)


(5,203
)


(12,992
)


(543,501
)


16,918



(18,282
)


(134,873
)


(107,997
)


(164,489
)Financing activities


(40,895
)


(36,246
)


(27,016
)


(334
)


556,304



(13,955
)


20,240



71,088



80,682



127,815Other Financial Data:Cash distributions per Common unit (declared)

$



$



$



$



$



$



$



$



$



$
0.3625Adjusted EBITDA(2)

$
52,473


$
44,275


$
23,926


$
17,809


$
3,390


$
(591
)

$
(144
)

$
81,192


$
38,011


$
36,252Segment gross margin(3)

$
79,974


$
71,679


$
48,006


$
39,141


$
18,418


$
1,825


$



$
100,810


$
22,968


$
26,203     (1)
    
    Includes historical financial and operating data for Eagle Rock
    Predecessor for the period from December 1, 2005 to
    December 31, 2005.(2)
    
    Excludes $7.3 million in unrealized derivative gains for
    the year ended December 31, 2005 and $21.3 million in
    unrealized derivative losses for the year ended
    December 31, 2006, $26.7 million for the six months
    ended June 30, 2006 and $34.5 million for the six
    months ended June 30, 2007. Excludes $0.5 million in
    2003 and $22.2 million in 2004 of income from discontinued
    operations.(3)
    
    Defined as operating revenues minus the cost of natural gas and
    NGLs and other cost of sales. Operating revenues include both
    realized and unrealized risk management activities. 50




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##### Table of Contents



Non-GAAP Financial
    Measures
    interest-net,
       51




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##### Table of Contents



Eagle Rock Predecessor


Eagle Rock Pipeline, L.P.


Eagle Rock Energy Partners, L.P.Period from























Six


SixJanuary 1,


Year


Year


Year


Year


Year


Year


Year


Months


Months2005 to


Ended


Ended


Ended


Ended


Ended


Ended


Ended


Ended


EndedNovember 30,


December 31,


December 31,


December 31,


December 31,


December 31,


December 31,


December 31,


June 30,


June 30,2005


2004


2003


2002


2005(1)


2004


2003


2006


2006


2007Reconciliation of EBITDA to net cash flows
    provided by (used in) operating activities and net income
    (loss):Net cash flows provided by (used in) operating activities

$
47,603


$
41,813


$
32,219


$
13,326


$
(1,667
)

$
3,652


$
(337
)

$
54,992


$
15,047


$
28,119Add (deduct):Depreciation and amortization


(8,157
)


(8,268
)


(7,187
)


(7,457
)


(4,088
)


(1,174
)


(98
)


(43,220
)


(20,215
)


(25,779
)Amortization of debt issue cost


















(76
)










(1,114
)


(432
)


Risk management portfolio value changes


















5,709











(23,531
)


(26,724
)


(34,539
)Advisory termination fee






























(6,000
)






Net realized gain on derivatives






























978







Other


















(6
)










(1,566
)


465



(694
)Gain on sale of Dry Trail plant






















19,465















Provision for deferred income taxes


(1,559
)


(7,325
)


(10,943
)


(596
)






















Accounts receivable and other current assets


56,599



30,905



23,791



(15,246
)


43,179



(901
)


883



1,432



(1,567
)


24,720Accounts payable and accrued liabilities


(64,320
)


(34,705
)


(21,363
)


26,790



(40,197
)


(169
)


(192
)


(8,777
)


9,264



(34,540
)Other assets and liabilities


(802
)


1,502



(5,660
)






(104
)


109



133



3,492



(324
)


(738
)Net income (loss)


29,364



23,922



10,857



16,817



2,750



20,982



389



(23,314
)


(24,486
)


(43,451
)Add:Interest (income) expense, net


(859
)


(646
)


(189
)






4,031











(30,383
)


5,923



9,728Depreciation and amortization


8,157



8,268



7,187



7,457



4,088



619







43,220



20,215



25,779Income tax provision (benefit)


15,811



12,731



6,071



(6,465
)














1,230



508



420EBITDA(2)

$
52,473


$
44,275


$
23,926


$
17,809


$
10,869


$
21,601


$
389


$
51,519


$
(2,160
)

$
(7,524
)Adjusted EBITDA(3)

$
52,473


$
44,275


$
23,926


$
17,809


$
3,561


$
(591
)

$
(144
)

$
81,192


$
38,011


$
36,252Reconciliation of net income (loss) to total segment gross
    margin:Net income (loss)

$
29,364


$
23,922


$
10,857


$
16,817


$
2,750


$
20,982


$
389


$
(23,314
)

$
(24,486
)

$
(43,451
)Add (deduct):Operating expenses


27,518



27,427



23,905



22,276



2,955



34







32,905



14,798



19,320General and administrative expense


















4,765



2,406



144



13,161



6,010



10,821Depreciation and amortization expense


8,157



8,268



7,187



7,457



4,088



619







43,220



20,215



25,779Interest expense, Net


(859
)


(646
)


(189
)






4,031











30,383



5,923



9,728Other income and deductions, net


(17
)


(23
)


(52
)


(944
)


(171
)


(24
)






3,225







3,586Income tax provision


15,811



12,731



6,071



(6,465
)














1,230



508



420Discontinued operations






















(22,192
)


(533
)










Cumulative effect of change in accounting principle










227



























Total segment gross margin

$
79,974


$
71,679


$
48,006


$
39,141


$
18,418


$
1,825


$



$
100,810


$
22,968


$
26,203     (1)
    
    Includes historical financial and operating data for Eagle Rock
    Predecessor for the period from December 1, 2005 to
    December 31, 2005.(2)
    
    Includes $7.3 million in unrealized derivative gains for
    the year ended December 31, 2005 and $21.3 million in
    unrealized derivative losses for the year ended
    December 31, 2006, $26.7 million for the six months
    ended June 30, 2006 and $34.5 million for the six
    months ended  June 30, 2007. Excludes $0.5 million in
    2003 and $22.2 million in 2004 of income from discontinued
    operations.(3)
    
    Excludes $7.3 million in unrealized derivative gains for
    the year ended December 31, 2005 and $21.3 million in
    unrealized derivative losses for the year ended
    December 31, 2006, $26.7 million for the six months
    ended June 30, 2006 and $34.5 million for the six
    months ended June 30, 2007. Excludes $0.5 million in
    2003 and $22.2 million in 2004 of income from discontinued
    operations. 52




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##### Table of Contents



MANAGEMENTS
    DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
  General
  Form 10-K Form 10-K/A Form 10-Q
  Segment
    Reporting
    Midstream Segment
        Upstream Segment
    Corporate Segment
      Critical
    Accounting Policies
  Form 10-K Form 10-Q
  Liquidity
    and Capital Resources
       53




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##### Table of Contents



Cash
    Flows and Capital Expenditures
    
    the acquisition of the Dry Trail plant on December 5, 2003
    in the amount of approximately $18.0 million which was
    financed through equity of $6.0 million and debt of
    $14.0 million;
    the acquisition of a 20% interest in the Camp Ruby gathering
    system and a 25% interest in the Indian Springs processing plant
    on July 1, 2004 for approximately $20.0 million,
    consisting of proceeds achieved with the sale of the Dry Trail
    plant;
    the acquisition of the midstream assets in the Texas Panhandle
    on December 1, 2005 for approximately $531.0 million,
    which was financed through an additional equity contribution of
    $133.0 million and debt of $400.0 million, not
    including $27.5 million in risk management costs related to
    option premiums financed entirely with equity;
    the acquisition of the Brookeland gathering and processing
    facility and related assets on March 31, 2006 and
    April 7, 2006 for approximately $95.8 million, which
    we financed entirely with equity;
    the acquisition of all of the partnership interests in Midstream
    Gas Services, L.P. on June 2, 2006 for approximately
    $25.0 million which we financed with $4.7 million in
    cash and $21.3 million in Eagle Rock Pipeline, L.P. units;
    the acquisition of certain fee minerals, royalties and working
    interest properties from Montierra Minerals &
    Production, L.P., and NGP-VII Income Co-Investment
    Opportunities, L.P. on April 30, 2007 for an aggregate
    purchase price of $127.4 million financed with 6,390,400 of
    our common units and $6.0 million in cash;
    the acquisition of all of the non-corporate interests of Laser
    Midstream Energy, LP, on May 3, 2007, including its
    subsidiaries Laser Quitman Gathering Company, LP, Laser
    Gathering Company, LP, Hesco Gathering Company, LLC, and Hesco
    Pipeline Company, LLC for a total purchase price of
    $136.8 million, consisting of $110.0 million in cash
    and 1,407,895 of our common units;
    the private placement on May 3, 2007 of 7,005,495 common
    units to several institutional purchasers in a private offering
    resulting in gross proceeds of $127.5 million. The proceeds
    from this offering were used to fully fund the cash portion of
    the purchase price of the Laser Acquisition and other general
    company purposes;
    the acquisition of certain assets from MacLondon Energy, L.P. on
    June 18, 2007 for total consideration of 789,474 in Eagle
    Rock common units;
    the acquisition of Escambia Asset Co., LLC and Escambia
    Operating Company, LLC on July 31, 2007 for an aggregate
    purchase price of approximately $240.5 million, including
    working capital adjustments, consisting of $224.0 million
    in cash and 689,857 in Eagle Rock common units;
    the acquisition of Redman Energy Holdings, L.P. and Redman
    Energy Holdings II, L.P. (Natural Gas Partners VII, L.P. and
    Natural Gas Partners VIII, L.P. portfolio companies,
    respectively) and certain assets owned by NGP Income
    Co-Investment Opportunities Fund II, L.P. (a Natural Gas
    Partners affiliate) on July 31, 2007 for an aggregate
    purchase price of $189.7 million, including working capital
    adjustments, consisting of 4,426,591 newly-issued Eagle Rock
    common units and $83.8 million in cash; and
    the private placement on July 31, 2007 of 9,230,770 common
    units to several institutional purchasers in a private offering
    resulting in gross proceeds of $204.0 million. The proceeds
    from this offering were used to partially fund the cash portion
    of the purchase price of the EAC and Redman acquisitions.   54




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##### Table of Contents



55




---



##### Table of Contents



BUSINESS
  Our
    Partnership
               56




---



##### Table of Contents




    approximately 800 miles of natural gas gathering pipelines,
    ranging from two inches to 12 inches in diameter, with
    35,000 horsepower of associated pipeline compression;
    four active natural gas processing plants with an aggregate
    capacity of 110 MMcf/d; and
    two natural gas treating facilities with an aggregate capacity
    of 75 MMcf/d.    
    approximately 2,700 miles of natural gas gathering
    pipelines, ranging from two inches to 12 inches in
    diameter, with approximately 81,500 horsepower of associated
    pipeline compression;
    four active natural gas processing plants with an aggregate
    capacity of 101 MMcf/d;
    natural gas treating facilities with an aggregate capacity of
    65 MMcf/d;
    a propane fractionation facility with capacity of
    1,000 Bbls/d; and
    a condensate collection facility.    
    approximately 160 miles of natural gas gathering pipelines,
    ranging from two inches to 20 inches in diameter, with
    8,100 horsepower of associated pipeline compression; and
    11 active refrigeration skids with an aggregate capacity of
    80 MMcf/d.    
    approximately 1,300 miles of natural gas gathering
    pipelines, ranging from two inches to 12 inches in
    diameter, with approximately 12,500 horsepower of associated
    pipeline compression;
    a 100 MMcf/d cryogenic processing plant;
    a 150 MMcf/d cryogenic processing plant, in which we own a
    25% undivided interest;
    five refrigeration skids with 45 MMcf/d of
    capacity; and
    a 19-mile
    NGL pipeline.  Our
    Assets
  Midstream
    Business
   57




---



##### Table of Contents



Texas
    Panhandle Operations
        East
    Panhandle System
    10-mile
  System Description.
  
    approximately 800 miles of natural gas gathering pipelines,
    ranging from two inches to 12 inches in diameter, with
    approximately 35,000 horsepower of associated pipeline
    compression;
    four active natural gas processing plants with an aggregate
    capacity of 110 MMcf/d; and
    two natural gas treating facilities with an aggregate capacity
    of 75 MMcf/d.    Natural Gas Supply.
   58




---



##### Table of Contents



Competition.
  West
    Panhandle System
    System Description.
  
    approximately 2,700 miles of natural gas gathering
    pipelines, ranging from two inches to 12 inches in
    diameter, with approximately 81,500 horsepower of associated
    pipeline compression;
    four active natural gas processing plants with an aggregate
    capacity of 101 MMcf/d;
    three natural gas treating facilities with an aggregate capacity
    of 65 MMcf/d;
    a propane fractionation facility with capacity of
    1,000 Bbls/d; and
    a condensate collection facility.    Natural Gas Supply.
      Competition.
  Texas
    Panhandle Markets
   59




---



##### Table of Contents



South
    Texas Operations
    Description
    
    Approximately 170 miles of natural gas pipeline ranging in
    size from two inches to 20 inches in diameter.
    Three main compressor stations with approximately 8100 aggregate
    horsepower.
    Three processing stations consisting of 11 active skids and
    related facilities for an aggregate capacity of 92 MMcf/d.
    Producer Services utilizing third party pipelines for the
    purchase and sale of wellhead natural gas.    Natural
    Gas Supply
  and/or
  and/or
  Markets
    Competition
   60




---



##### Table of Contents



Southeast
    Texas and Louisiana Operations
    Systems Description.
  
    approximately 1,300 miles of natural gas gathering
    pipelines, ranging from two inches to 12 inches in
    diameter, with approximately 12,500 horsepower of associated
    pipeline compression;
    a 100 MMcf/d cryogenic processing plant;
    a 150 MMcf/d cryogenic processing plant, in which we own a
    25% undivided interest;
    five refrigeration skids with 45 MMcf/d of
    capacity; and
    a 19-mile
    NGL pipeline.  Natural Gas Supply.
    Markets.
  Competition.
  Upstream
    Business
  Oil and
    Natural Gas Data
  Proved
    Reserves
   61




---



##### Table of Contents



As ofJuly 1,2007Reserve Data:Estimated net proved reserves:Natural gas (Bcf)


48,020Oil (MMBbls)


9,895Natural Gas Liquids (MMBbls)


5,768Total (Bcfe)


141,998Proved developed (Bcfe)


131,116Proved undeveloped (Bcfe)


10,882Proved developed reserves as % of total proved reserves


92
%Standardized Measure (in millions)

$
414.1Representative Natural Gas and Oil Prices:Natural gas  Henry Hub per MMBtu

$
6.36Oil  WTI per Bbl

$
70.68     (1)
    
    Does not give effect to hedging transactions.(2)
    
    Natural gas and oil prices as of each period end were based on
    spot prices per MMBtu and Bbl at such date, with these
    representative prices adjusted by region to arrive at the
    appropriate net price.          Productive
    Wells
   62




---



##### Table of Contents



Developed
    and Undeveloped Acreage
    Developed


Undeveloped


TotalAcreage(1)


Acreage(2)


AcreageGross(3)


Net(4)


Gross(3)


Net(4)


Gross


NetOperated


52,451



39,233



945



399



53,396



39,632Non-operated


23,532



1,726



40



31



23,572



1,757Total


75,983



40,959



985



430



76,968



41,389     (1)
    
    Developed acres are acres spaced or assigned to productive wells.(2)
    
    Undeveloped acres are acres on which wells have not been drilled
    or completed to a point that would permit the production of
    commercial quantities of natural gas or oil, regardless of
    whether such acreage contains proved reserves.(3)
    
    A gross acre is an acre in which a working interest is owned.
    The number of gross acres is the total number of acres in which
    a working interest is owned.(4)
    
    A net acre is deemed to exist when the sum of the fractional
    ownership working interests in gross acres equals one. The
    number of net acres is the sum of the fractional working
    interests owned in gross acres expressed as whole numbers and
    fractions thereof.  Drilling
    Activity
    Safety
    and Maintenance Regulation
     63




---



##### Table of Contents



Regulation
    of Operations
  Midstream
    Business
    Gathering Pipeline
    Regulation.
  and/or
     64




---



##### Table of Contents



Sales of Natural Gas.
  Intrastate NGL Pipeline Regulation.
 65




---



##### Table of Contents



Upstream
    Business
      Drilling and Production.
  
    the location of wells;
    the method of drilling and casing wells;
    the surface use and restoration of properties upon which wells
    are drilled;
    the plugging and abandoning of wells; and
    notice to surface owners and other third parties.    Natural Gas Regulation.
   66




---



##### Table of Contents



State Regulation.
    Derivative
    Instruments and Hedging Activities
  Accounting for Derivative
    Instruments and Hedging Activities
     67




---



##### Table of Contents



PriceAverage Monthly



($/mmbtu or $/bbl)Period

Commodity


Volumes

Index

Avg. Floor


Avg. CeilingJan-Dec 2007


Gas


20,000 MMBtu

NYMEX


8.00



12.95Jan-Dec 2007


Gas


15,000 MMBtu

NYMEX


7.00



10.40Jan-Dec 2007


Gas


10,000 MMBtu

NYMEX


6.25



8.00Jan-Dec 2007


Gas


40,000 MMBtu

NYMEX


8.00



12.11Jan-Dec 2007


Gas


20,000 MMBtu

NYMEX


7.00Jan-Dec 2007


Gas


40,000 MMBtu

NYMEX


7.00Apr-Dec 2007


Gas


123,600 MMBtu

NYMEX


7.00



11.89Jan-Dec 2007


Oil


500 Bbl

NYMEX WTI


60.00



75.00Jan-Dec 2007


Oil


2,500 Bbl

NYMEX WTI


60.00



72.55Jan-Dec 2007


Oil


500 Bbl

NYMEX WTI


60.00



75.00Jan-Dec 2007


Oil


2,500 Bbl

NYMEX WTI


60.00



72.55Jan-Dec 2007


Oil


2,000 Bbl

NYMEX WTI


60.00



75.15Jan-Dec 2007


Oil


32,000 Bbl

NYMEX WTI


74.00Jan-Dec 2007


Oil


4,000 Bbl

NYMEX WTI


65.00Jan-Dec 2007


Oil


3,000 Bbl

NYMEX WTI


65.00Jan-Dec 2007


Oil


5,000 Bbl

NYMEX WTI


60.00



79.95Jul-Dec 2007


Oil


5,000 Bbl

NYMEX WTI


65.00



82.75Jan-Dec 2008


Gas


30,000 MMBtu

NYMEX


6.25



11.15Jan-Dec 2008


Gas


103,000 MMBtu

NYMEX


7.00



13.98Jan-Dec 2008


Gas


30,000 MMBtu

NYMEX


7.50



12.01Jan-Dec 2008


Gas


50,000 MMBtu

NYMEX


7.00Jan-Dec 2008


Oil


6,000 Bbl

NYMEX WTI


60.00



71.65Jan-Dec 2008


Oil


29,000 Bbl

NYMEX WTI


65.00



90.00Jan-Dec 2008


Oil


4,000 Bbl

NYMEX WTI


60.00



77.22Jan-Dec 2008


Oil


6,000 Bbl

NYMEX WTI


65.00Jan-Dec 2008


Oil


5,000 Bbl

NYMEX WTI


60.00



83.75Jan-Dec 2009


Gas


20,000 MMbtu

NYMEX


6.25



11.20Jan-Mar 2009


Gas


92,700 MMBtu

NYMEX


7.50



13.75Jan-May 2009


Gas


40,000 MMBtu

NYMEX


7.00Jan-May 2009


Oil


7,000 Bbl

NYMEX WTI


60.00



80.75Jan-Dec 2009


Oil


6,000 Bbl

NYMEX WTI


60.00



77.00    68




---



##### Table of Contents



Average Monthly



PricePeriod

Commodity

Volumes

Index

($/gal)Jul-Dec 2007


Propane



4,091 Bbl


OPIS MTB TET


1.0875Jul-Dec 2007


Propane



5,906 Bbl


OPIS MTB non-TET


1.0775Jul-Dec 2007


n-Butane



7,156 Bbl


OPIS MTB non-TET


1.2775Jul-Dec 2007


i-Butane



3,600 Bbl


OPIS MTB non-TET


1.2950Jan-Dec 2008


Propane



3,272 Bbl


OPIS MTB TET


1.0875Jan-Dec 2008


Propane



6,076 Bbl


OPIS MTB non-TET


1.0775Jan-Dec 2008


n-Butane



6,691 Bbl


OPIS MTB non-TET


1.2775Jan-Dec 2008


i-Butane



3,367 Bbl


OPIS MTB non-TET


1.2950Jan-Dec 2009


Propane



2,955 Bbl


OPIS MTB TET


1.0875Jan-Dec 2009


Propane



5,486 Bbl


OPIS MTB non-TET


1.0775Jan-Dec 2009


n-Butane



6,042 Bbl


OPIS MTB non-TET


1.2775Jan-Dec 2009


i-Butane



3,040 Bbl


OPIS MTB non-TET


1.2950  
   
 
   
  
 Average Monthly




Floor


CapPeriod

Commodity


Volumes


Index

($/Bbl)


($/Bbl)Jan-Dec 2008


Crude oil



20,000 Bbl


Nymex WTI


50.00



65.65Jan-Dec 2008


Crude oil



20,000 Bbl


Nymex WTI


50.00



65.70Jan-Dec 2008


Crude oil



40,000 Bbl


Nymex WTI


50.00



69.10  
 
   
  
 Average Monthly



Swap PricePeriod

Commodity

Volumes

Index

($/Bbl)Jan-Dec 2008


Crude oil



80,000 Bbl



Nymex WTI



73.90  
 
   
 
   
  
 Average Monthly



Swap PricePeriod

Commodity

Volumes

Index

($/Bbl)Jan-Dec 2009


Crude oil



25,000 Bbl



Nymex WTI



71.25Jan-Dec 2010


Crude oil



25,000 Bbl



Nymex WTI



70.00  
 69




---



##### Table of Contents



Average Monthly




Swap PricePeriod

Commodity


Volumes


Index

($/gal)Oct-Dec 2007


Ethane



40,000 Bbl


OPIS MTB non-TET


0.83375Oct-Dec 2007


Propane



35,000 Bbl


OPIS MTB TET


1.2775Oct-Dec 2007


n-Butane



16,000 Bbl


OPIS MTB non-TET


1.5275Oct-Dec 2007


i-Butane



8,500 Bbl


OPIS MTB non-TET


1.5575  
 
   
  
 Average Monthly




Swap PricePeriod

Commodity


Volumes


Index

($/gal)Jan-Dec 2008


Ethane



25,000 Bbl


OPIS MTB non-TET


0.7200Jan-Dec 2008


Propane



35,000 Bbl


OPIS MTB TET


1.1900Jan-Dec 2009


Ethane



25,000 Bbl


OPIS MTB non-TET


0.6361Jan-Dec 2009


Propane



15,000 Bbl


OPIS MTB TET


1.0925  
 
  3-month
 
  
 Notional AmountPeriod

(Millions)


Reference Rate


Fixed RateOct 2007-Dec 2010

$
75



3 month LIBOR



4.660
%Oct 2007-Dec 2010

$
75



3 month LIBOR



4.655
%  
  Environmental
    Matters
  Midstream
    Business
     70




---



##### Table of Contents



on-site
   71




---



##### Table of Contents



Upstream
    Business
      General.
  
    require the acquisition of various permits before drilling
    commences;
    require the installation of expensive pollution control
    equipment;
    restrict the types, quantities and concentration of various
    substances that can be released into the environment in
    connection with drilling and production activities;
    limit or prohibit drilling activities on lands lying within
    wilderness, wetlands and other protected areas;
    require remedial measures to prevent pollution from former
    operations, such as pit closure and plugging of abandoned wells;
    impose substantial liabilities for pollution resulting from our
    operations; and
    with respect to operations affecting federal lands or leases,
    require preparation of a Resource Management Plan, an
    Environmental Assessment,
    and/or an
    Environmental Impact Statement.  clean-up
  Title to
    Properties and Rights-of-Way
  Midstream
    Business
   72




---



##### Table of Contents



Upstream
    Business
    Employees
    Legal
    Proceedings
   73




---



##### Table of Contents



MANAGEMENT
  Management
    of Eagle Rock Energy Partners, L.P.
       
   
 
   
 
   
 74




---



##### Table of Contents



Directors
    and Executive Officers
 
   
  
 Name

Age

Position with Eagle Rock Energy G&P, LLCJoseph A. Mills


47


Chairman and Chief Executive Officer, DirectorRichard W. FitzGerald(1)


53


Senior Vice President, Chief Financial Officer and TreasurerAlfredo Garcia(1)


41


Acting Chief Financial Officer and Senior Vice President,
    Corporate DevelopmentCharles C. Boettcher


33


Senior Vice President, General Counsel,
    Chief Compliance Officer and SecretarySteven G. Hendrickson


45


Senior Vice President, Technical EvaluationsWilliam E. Puckett


51


Senior Vice President, Midstream Commercial OperationsJoseph E. Schimelpfening


45


Senior Vice President, E&P Operations and DevelopmentJ. Stacy Horn


45


Vice President, Midstream Commercial DevelopmentStephen O. McNair


44


Vice President, Midstream OperationsMark S. Terrell


47


Vice President, LandWilliam J. Quinn


36


DirectorKenneth A. Hersh


43


DirectorPhilip B. Smith


55


DirectorWilliam A. Smith


63


DirectorJohn A. Weinzierl


38


DirectorWilliam K. White


64


Director  
    (1)
    
    Per our
    Form 8-K
    filed on July 17, 2007, Mr. Garcia has been appointed
    Acting Chief Financial Officer until Mr. FitzGerald is able
    to resume his duties and responsibilities.   75




---



##### Table of Contents



Joseph A. Mills
  Richard W. FitzGerald
  Alfredo Garcia start-up
  Charles C. Boettcher
  Steven G. Hendrickson
  William E. Puckett
  Joseph E. Schimelpfening
  J. Stacy Horn
 76




---



##### Table of Contents



Stephen McNair
 
 
 
  Mark S. Terrell
 
  William J. Quinn
  Kenneth A. Hersh
  Philip B. Smith
 
  William A. Smith
 
  John A. Weinzierl
  William K. White
 77




---



##### Table of Contents



COMPENSATION
    DISCUSSION AND ANALYSIS
 
 
  The following discussion of executive compensation contains
    references to our employee benefit plan and an employment
    agreement of our Chief Financial Officer. These descriptions are
    qualified in their entirety by reference to the full text of the
    plan or employment agreement, which have been filed by us as
    exhibits to our report on
    Form 10-K
    with the U.S. Securities and Exchange Commission.
 
 
  Overview
    of Executive Officer Compensation
 
 
   
 
   
 
   
 
   
 
  Discussion
    and Analysis of 2006 Executive Compensation
 
 
   
 78




---



##### Table of Contents



Tier I


Tier II


Tier IIIAlex A. Bucher






0.0022
%


0.11
%Richard W. FitzGerald


0.72
%






0.11
%Alfredo Garcia


0.63
%






0.11
%William E. Puckett


0.36
%






0.11
%Joan A.W. Schnepp






0.0014
%


0.11
%  
 
   
 79




---



##### Table of Contents



Discussion
    and Analysis of Updates to the Executive Compensation Program
    for 2007
 
 
   
 
   
 
   
 
   
 
   
 
  Base
    Salary
 
 
   
 80




---



##### Table of Contents



Cash
    Bonuses
 
 
   
 
  Equity
 
 
  Restricted
    Units under the LTIP
 
 
   
 
  Incentive
    Interests in Holdings
 
 
   
 
   
 81




---



##### Table of Contents



his/her
 
 
   
 
  Equity
    Interests in Montierra
 
 
   
 
   
 
   
 
  Changes
    in Named Executive Officers and New Chief Executive
    Officer
 
 
   
 82




---



##### Table of Contents



Compensation
    Tables for 2006
 
 
  Summary
    Compensation Table
 
 
   
  
 Change inPension ValueandNonqualifiedNon-Equity

DeferredOption

Incentive Plan

Compensation

All OtherSalary

Bonus

Unit

Awards

Compensation

Earnings

Compensation

TotalName and Principal Position

Year

($)

($)(3)

Awards ($)

($)(3)

($)

($)

($)

(%)($)Alex A. Bucher, Jr.


2006


$
195,833






















$7,833(5)(8)

$
203,667President and Chief
    Executive Officer,
    Director(1)Richard W. FitzGerald,


2006


$
72,050






$
187,500
(4)













$(8)

$
269,550Senior Vice President,Chief FinancialOfficer andTreasurer(2)Alfredo Garcia


2006


$
171,666






















$6,867(5)(8)

$
178,533Senior VicePresident, CorporateDevelopmentWilliam E. Puckett


2006


$
174,999






$
187,500
(4)













$33,750(6)(8)

$
406,249Senior VicePresident, CommercialOperationsJoan A. W. Schnepp(7)


2006


$
195,832






















$7,833(5)(8)

$
203,666Executive
    Vice President  
   
  (1)
    
    Mr. Bucher was President and Chief Executive Officer of
    Eagle Rock Energy G&P, LLC, the general partner of Eagle
    Rock Energy GP, L.P., which is the general partner of Eagle
    Rock, the publicly traded limited partnership, referred to as
    the Partnership, until May 1, 2007, at which
    time he ceased to be Chief Executive Officer. Mr. Bucher
    continued to serve as President and Chief Operating Officer
    Eagle Rock Energy G&P, LLC, the general partner of Eagle
    Rock Energy GP, L.P. which is the general partner 
 83




---



##### Table of Contents



of the Partnership until such time as his resignation from such
    positions became effective on June 15, 2007. 
 
  (2)
    
    Mr. FitzGerald began employment on August 24, 2006. 
 
  (3)
    
    No bonuses were paid or accrued for executives with regard to
    2006 performance, and no options were awarded by the Partnership. 
 
  (4)
    
    Represents the dollar amount of 10,000 restricted units awarded
    to each of Mr. FitzGerald and Mr. Puckett, on or about
    October 24, 2006, in connection with our initial public
    offering. Such units vest annually in equal increments over a
    three-year period beginning October 24, 2006. In
    determining the dollar amount, such units are valued at $18.75,
    which is the price of such units at the time of our initial
    public offering, October 24, 2006, discounted for the delay
    in cash distribution attributable to such units during the
    period under which these units remain unvested. 
 
  (5)
    
    Represents the amount of deferred compensation that we made to
    each executive under our 401(k) plan. 
 
  (6)
    
    Represents $25,000 cash incentive for employment and $8,750 in
    deferred compensation that we made under our 401(k) plan. 
 
  (7)
    
    Ms. Schnepp was Executive Vice President of Eagle Rock
    Energy G&P, LLC, the general partner of Eagle Rock Energy
    GP, L.P. which is the general partner of the Partnership until
    she resigned effective as of January 31, 2007. 
 
  (8)
    
    The named executive officer received grants of incentive
    interests in Eagle Rock Holdings, L.P. from the Holdings Board.
    These grants were made prior to Eagle Rocks initial public
    offering and were not given any valuation, other than a
    valuation for tax purposes for which 83(b) protective elections
    were filed based on a zero value for tax purposes based on
    substantial risks of forfeiture. For a discussion of the
    incentive interests granted, see  Discussion and
    Analysis of 2006 Executive Compensation. 
 
   
 
  Grants
    of plan-based awards in 2006
 
 
   
  
 All OtherOptionAll Other


Awards:


ExerciseEstimated Future Payouts


Estimated Future Payouts


Unit


Number of


or Base


Grant DateUnder Non-Equity


Under Equity Incentive


Awards:


Securities


Price of


Fair ValueIncentive Plan Awards


Plan Awards


Number of


Underlying


Option


of Unit andGrant


Threshold


Target


Maximum


Threshold


Target


Maximum


Restricted


Options


Awards


OptionName

Date


($)


($)


($)


(#)


(#)


(#)


Units (#)


(#)


($/Unit)


AwardsAlex A. Bucher, Jr.










































Richard W. FitzGerald


10/24/06



























10,000
(1)









$
187,500
(2)Alfredo Garcia










































William E. Puckett


10/24/06



























10,000
(1)









$
187,500
(2)Joan A.W. Schnepp










































  
   
  (1)
    
    Represents the amount of restricted units awarded to each of
    Mr. FitzGerald and Mr. Puckett, on or about
    October 24, 2006, in connection with our initial public
    offering. Such units vest annually in equal increments over a
    three year period beginning October 24, 2006. 
 
  (2)
    
    Calculated based upon unit price on October 24, 2006 of
    $18.75 times the number of unvested restricted unit awards. The
    price of $18.75 represents the price of such units on
    October 24, 2006, discounted for the delay in cash
    distributions attributable to such units during the period which
    they remain unvested. 
 84




---



##### Table of Contents



Outstanding
    equity awards at December 31, 2006
 
 
   
  
 Option Awards


Unit AwardsEquityIncentive PlanEquity

















Awards:Incentive

















Market orPlan Awards:














Equity Incentive


Payout ValueNumber of


Number of


Number of














Plan Awards:


of UnearnedSecurities


Securities


Securities








Number





Number of


Shares, UnitsUnderlying


Underlying


Underlying








of Units


Market Value


Unearned Shares,


or OtherUnexercised


Unexercised


Unexercised


Option





That Have


of Units That


Units or Other


Rights ThatOptions


Options


Unearned


Exercise


Option


Not


Have Not


Rights That Have


Have Not(#)


(#)


Options


Price


Expiration


Vested


Vested


Not Vested


VestedName

Exercisable


Unexercisable


(#)


($)


Date


(#)


($)


(#)


($)Alex A. Bucher, Jr.


































Richard W. FitzGerald






















10,000
(1)

$
203,900
(2)






Alfredo Garcia


































William E. Puckett






















10,000
(1)

$
203,900
(2)






Joan A.W. Schnepp


































  
   
  (1)
    
    Represents the amount of restricted units awarded to each of
    Mr. FitzGerald and Mr. Puckett, on or about
    October 24, 2006, in connection with our initial public
    offering. Such units vest annually in equal increments over a
    three-year period beginning October 24, 2006. 
 
  (2)
    
    Calculated based upon stock price at end of the fiscal year of
    $20.39 times the number of unvested restricted unit awards. This
    value is not discounted for the delay in cash distributions
    attributable to such units during the period which they remain
    unvested. 
 
  Employment
    Agreements and Severance and Change of Control
    Arrangements
 
 
   
 
   
 85




---



##### Table of Contents



2006 Director
    Compensation
 
 
   
 
  
 
 Change inPension ValueFees











andEarned or








Non-Equity


NonqualifiedPaid in


Stock


Option


Incentive Plan


Deferred


All OtherCash


Awards


Awards


Compensation


Compensation


Compensation


TotalName

($)


($)


($)


($)


Earnings


($)


($)Kenneth A. Hersh


























William J. Quinn


























John A. Weinzierl


























William K. White

$
11,338
(1)

$
93,750
(2)

















$
105,088Philip B. Smith

$
11,338
(1)

$
93,750
(2)

















$
105,088  
   
  (1)
    
    Reflects fees paid or earned by our non-employee directors in
    2006. 
 
  (2)
    
    Represents the dollar amount of 5,000 restricted units awarded
    to each of Mr. W. White and Mr. P. Smith, on or about
    October 24, 2006, in connection with our initial public
    offering. Such units vest annually in equal increments over a
    three-year period beginning October 24, 2006. In
    determining the dollar amount, such units are valued at $18.75,
    which is the price of such units at the time of our initial
    public offering, October 24, 2006, discounted for the delay
    in cash distribution attributable to such units during the
    period under which these units remain unvested. 
 
  Compensation
    Committee Interlocks and Insider Participation
 
 
  Form 10-K
 
 86




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##### Table of Contents



SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
   
  
    each person or group of persons who then will beneficially own
    5% or more of the then outstanding units;
    each member of the board of directors of Eagle Rock Energy
    G&P, LLC;
    each named executive officer of Eagle Rock Energy G&P,
    LLC; and
    all directors and officers of Eagle Rock Energy G&P, LLC as
    a group.  
 Percentage ofTotalPercentage of



Percentage of

Common andCommon

Common

Subordinated

Subordinated

SubordinatedUnits

Units

Units

Units

UnitsBeneficially

Beneficially

Beneficially

Beneficially

BeneficiallyName of Beneficial Owner(1)

Owned

Owned

Owned

Owned

OwnedEagle Rock Holdings, L.P.(2)


2,187,871



4.3
%


20,691,495



100.0
%


31.8
%Montierra Minerals & Production, L.P.(3)


2,820,578



5.5
%







%


3.9
%Lehman Brothers Holdings, Inc(4)


7,646,219



14.9
%







%


10.6
%Joseph A. Mills(6)


154,185



*
%







%


*
%Richard W. FitzGerald(2)(6)


56,715



*
%


205,361



1.0
%


*
%Alfredo Garcia(2)(6)


80,691



*
%


763,122



3.7
%


1.2
%Charles C. Boettcher(6)


50,000



*
%







%


*
%William E. Puckett(2)(6)


39,214



*
%


181,714



*
%


*
%Joseph E. Schimelpfening(6)


29,425



*
%







%


*
%Steven G. Hendrickson(6)


27,366



*
%







%


*
%J. Stacy Horn(2)(6)


37,551



*
%


132,887



*
%


*
%Stephen O. McNair(2)(6)


34,782



*
%


116,164



*
%


*
%Kenneth A. Hersh(5)


12,042,974



23.5
%







%


16.2
%Steven B. Klinsky(7)


3,051,700



6.0
%







%


4.2
%William J. Quinn


10,000



*
%






*
%


*
%John A. Weinzierl


8,800



*
%






*
%


*
%William K. White


14,700



*
%






*
%


*
%Philip B. Smith


10,000



*
%






*
%


*
%William A. Smith


5,000



*
%






*
%


*
%All directors and executive officers as a group (15 persons)


558,429



1.1
%


1,399,248



6.8
%


2.7
%  
    *
    
    Less than 1%(1)
    
    Unless otherwise indicated, the address for all beneficial
    owners in this table is 16701 Greenspoint Park Drive, Suite 200
    Houston, Texas 77060. 
  (2)
    
    Natural Gas Partners VII, L.P., Natural Gas Partners VIII, L.P.,
    Richard W. FitzGerald, Alfredo Garcia, William E. Puckett, J.
    Stacy Horn and Stephen O. McNair have approximately a 31.35%,
    48.33%, 1.00%, 3.72%, 0.89%, 0.65% and 0.57% limited partner
    interest, respectively, in Eagle Rock Holdings, L.P. Eagle Rock
    GP, L.L.C., which is owned 39.14% and 60.35% by Natural Gas
    Partners VII, L.P. and Natural Gas Partners VIII, L.P.,
    respectively, owns a 1.0% general partner interest in Eagle Rock
    Holdings, L.P. The units held by Eagle Rock Holdings, L.P. are
    reported in this table as beneficially owned by Mr. Garcia,
    Mr. Puckett, Mr. FitzGerald, Mr. McNair and
    Mr. Horn in proportion to their beneficial ownership in
    Eagle Rock Holdings, L.P. 
  (3)
    
    NGP VII owns a 97.561% LP interest in Montierra Management LLC
    (Montierra Management), which serves as the general
    partner of Montierra, and appoints three Managers on the board
    of Montierra Management. NGP VII also owns a 96.169% LP interest
    in Montierra, and thus may be deemed to beneficially own all of
    the reported securities of Montierra Management and Montierra.(4)
    
    Lehman Brothers, Inc. is the actual owner of 2,674,167 Common
    Units reported herein. Lehman Brothers, Inc. is a wholly-owned
    subsidiary of Lehman Brothers Holdings, Inc. Lehman Brothers
    Holdings, Inc. may be deemed to be the beneficial owner of the
    Common Units owned by Lehman Brothers, Inc. Lehman Brothers 87




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##### Table of Contents



MLP Opportunity Fund LP is the actual owner of 3,590,859
    Common Units reported herein. Lehman Brothers MLP Opportunity
    Fund LP is wholly-owned by Lehman Brothers MLP Opportunity
    Associates, LP which is wholly-owned by Lehman Brothers MLP
    Opportunity Associates, LLC which is wholly owned by Lehman
    Brothers Holdings, Inc. Lehman Brothers MLP Opportunity
    Associates, LP, Lehman Brothers MLP Opportunity Associates, LLC,
    and Lehman Brothers Holdings, Inc. may be deemed to be the
    beneficial owners of the Common Units owned by Lehman Brothers
    MLP Opportunity Fund LP. Lehman Brothers MLP Partners, LP
    is the actual owner of 1,381,193 Common Units reported herein.
    Lehman Brothers MLP Partners, LP is wholly-owned by LB I Group,
    Inc. which is wholly-owned by Lehman Brothers, Inc. which is
    wholly owned by Lehman Brothers Holdings, Inc. LB I Group, Inc.,
    Lehman Brothers, Inc. and Lehman Brothers Holdings, Inc. may be
    deemed to be the beneficial owners of the Common Unites owned by
    Lehman Brothers MLP Partners, LP.(5)
    
    G.F.W. Energy VII, L.P., GFW VII, L.L.C., G.F.W. Energy VIII,
    L.P. and GFW VIII, L.L.C. may be deemed to beneficially own the
    units held by Eagle Rock Holdings, L.P. (Holdings)
    that are attributable to Natural Gas Partners VII, L.P.
    (NGP VII) and Natural Gas Partners VIII, L.P.
    (NGP VIII) by virtue of GFW VII, L.L.C. being the
    sole general partner of G.F.W. Energy VII, L.P. and GFW VIII,
    L.L.C. being the sole general partner of G.F.W. Energy VIII,
    L.P. Kenneth A. Hersh, who is an Authorized Member of each of
    GFW VII, L.L.C. and GFW VIII, L.L.C., may also be deemed to
    share the power to vote, or to direct the vote, and to dispose,
    or to direct the disposition of, those units. On July 31,
    2007, the Issuer acquired Redman Energy Holdings, L.P. and
    Redman Energy Holdings II, L.P. from NGP VII and NGP VIII,
    respectively, in consideration for the issuance of 1,284,315
    common units to NGP VII and 1,763,206 common units to NGP VIII.
    NGP VII and NGP VIII collectively own a 98% LP interest in
    Holdings and a 96.169% LP interest in Montierra
    Minerals & Production, L.P. NGP VII owns 100% of NGP
    Income Management L.L.C. which serves as the general partner of
    both NGP-VII Income Co-Investment Opportunities, L.P.
    (NGP-VII Income Co-Investment) and NGP 2004
    Co-Investment Income, L.P. (NGP 2004). NGP-VII
    Income Co-Investment owns 100% of NGP Co-Investment Income
    Capital Corp. (NGP Capital Corp.). NGP VII may be
    deemed to beneficially own all of the units of NGP 2004 and NGP
    Capital Corp. Kenneth A. Hersh may be deemed to share
    dispositive power over the units held by NGP VII, thus, he may
    also be deemed to be the beneficial owner of these units.
    Mr. Hersh disclaims beneficial ownership of our units
    except to the extent of his pecuniary interest therein.(6)
    
    In addition to the units he holds through his ownership of Eagle
    Rock Holdings, L.P., Richard W. FitzGerald also beneficially
    owns 5,000 units through our directed unit program, plus
    30,000 units that are subject to a three-year vesting
    schedule pursuant to our long-term incentive plan. Charles C.
    Boettcher beneficially owns 50,000 units that are subject
    to a three-year vesting schedule pursuant to our long-term
    incentive plan. In addition to the units he holds through his
    ownership of Eagle Rock Holdings, L.P., William E. Puckett also
    beneficially owns 20,000 units that are subject to a
    three-year vesting schedule pursuant to our long-term incentive
    plan. In addition to the units he holds through his ownership of
    Eagle Rock Holdings, L.P., J. Stacy Horn also beneficially owns
    1,500 units through our directed unit program plus
    22,000 units that are subject to a three-year vesting
    schedule pursuant to our long-term incentive plan. In addition
    to the units he holds through his ownership of Eagle Rock
    Holdings, L.P., Stephen O. McNair also beneficially owns
    500 units through our directed unit program plus
    22,000 units that are subject to a three-year vesting
    schedule pursuant to our long-term incentive plan. In addition
    to the 69,185 units he beneficially owns as a result of the
    Montierra Acquisition, Joseph A. Mills also beneficially owns
    85,000 units that are subject to a three-year vesting
    schedule pursuant to our long term incentive plan. In addition
    to the 4,794 units he beneficially owns as a result of the
    Montierra Acquisition, Joseph E. Schimelpfening also
    beneficially owns 24,631 units that are subject to a
    three-year vesting schedule pursuant to our long term incentive
    plan. In addition to the 2,735 units he beneficially owns
    as a result of the
    Montierra
    Acquisition, Steven G. Hendrickson also beneficially owns
    24,631 units that are subject to a three-year vesting
    schedule pursuant to our long term incentive plan.(7)
    
    Mr. Klinsky may be deemed to beneficially own an aggregate
    of 3,051,700 Common Units that are owned by New Mountain
    Vantage, L.P., New Mountain Vantage (California), L.P. and New
    Mountain Vantage (Texas), L.P., representing, in the aggregate,
    approximately 6.0% of the issued and outstanding Common Units.
    Mr. Klinsky disclaims beneficial ownership of the Common
    Units beneficially owned by New Mountain Vantage, L.P., New
    Mountain Vantage (California), L.P. and New Mountain Vantage
    (Texas), L.P, to the extent that partnership interests or
    limited liability company interests in New Mountain Vantage,
    L.P., New Mountain Vantage (California), L.P. and New Mountain
    Vantage (Texas), L.P are held by persons other than
    Mr. Klinsky. 88




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##### Table of Contents



SELLING
    UNITHOLDERS
       
   
 
   
    
 Number of

Percentage ofNumber of

Percentage

Units

UnitsUnits

of

Outstanding

Outstandingthat

Units

after

afterSelling Unitholder

may be Sold

Outstanding

Offering

OfferingAgile Performance Fund, LLC(1) 


9,230




*






Credit Suisse Management LLC(2) 


900,000



1.76
%






Curtis Stevens


14,967




*






Dale Harper


72,967




*






Gary Hollowell


36,822




*






 
 89




---



##### Table of Contents



Number of

Percentage ofNumber of

Percentage

Units

UnitsUnits

of

Outstanding

Outstandingthat

Units

after

afterSelling Unitholder

may be Sold

Outstanding

Offering

OfferingGPS High Yield Equities Fund, L.P.(3)


34,725




*






GPS MLP Fund, L.P.(3)


98,885




*






GPS New Equity Fund, L.P.(3)


708,790



1.39
%






Greg Montgomery


44,748




*






GSO Special Situations Fund LP(4)


948,141



1.85
%






HSH Nordbank AG, Cayman Islands Branch(5)


568,885



1.11
%






I.J. Chip Berthelot, II


456,610




*






I.J. Chip Berthelot, II as Custodian for Amanda
    Marie Berthelot under the Texas Uniform Transfer to Minors Act(6)


5,672




*






I.J. Chip Berthelot, II as Custodian for Iris
    J. Berthelot III under the Texas Uniform Transfer to Minors
    Act(6)


5,672




*






I.J. Chip Berthelot, II as Custodian for
    Jennifer Lynn Berthelot under the Texas Uniform Transfer to
    Minors Act(6)


5,672




*






I.J. Chip Berthelot, II as Custodian for Lauren
    Nicole Berthelot under the Texas Uniform Transfer to Minors
    Act(6)


5,672




*






Kenmont Onshore Fund, L.P.(7)


94,815




*






Ladonna M. Combs


2,836




*






Laser Midstream Energy II, LLC(8)


631,579



1.23
%






Lehman Brothers Inc.(9) 


692,401



1.35
%






Lehman Brothers MLP Opportunity Fund L.P.(10) 


1,098,901



2.15
%






Montierra Management LLC(11)


28,491




*






Montierra Minerals & Production, L.P.(12)


2,820,578



5.51
%






New Mountain Vantage, L.P.(13)


207,500




*






New Mountain Vantage (California), L.P.(13)


207,100




*






New Mountain Vantage (Texas), L.P.(13)


191,900




*






NGP 2004 Co-Investment Income, L.P(14)


3,433,674



6.71
%






NGP Co-Investment Income Capital Corp.(14)


107,657




*






RAMOT Capital, LLC(15)


139,677




*






Randy Newcomer, Jr.


18,441




*






RCH Energy MLP Fund, L.P.(16)


1,098,901



2.15
%






RCH Energy Opportunity Fund I, L.P.(17)


718,339



1.40
%






Royal Bank of Canada(18) 


1,207,710



2.36
%






Skeleton Lake, LLC(19)


13,274




*






Stephenson Equity Company(20)


379,256




*






Steve Loy


36,822




*






Steven & Laura S. Adams


54,992




*






Structured Finance Americas LLC(21) 


384,617




*






Swank MLP Convergence Fund, LP(22)


379,256




*






Thomas K. Odenwelder


62,498




*






Tortoise Capital Resources Corporation(23)


474,071




*






W. Tim Sexton


6,917




*






ZLP Fund, L.P.(24)


164,835




*






Total


18,574,496  
    *
    
    Less than one percent. 
  
    
    This unitholder is a broker-dealer registered under the
    Section 15 of the Securities Exchange Act of 1934, as
    amended. 
  
    
    This unitholder is an affiliate of a broker-dealer registered
    under the Section 15 of the Securities Exchange Act of
    1934, as amended. 90




---



##### Table of Contents



(1)
    
    Neal R. Greenberg is the Managing Member of Agile Group, LLC,
    which is the General Partner of this selling unitholder. By
    virtue of his position with Agile Group, LLC, Mr. Greenberg
    is deemed to hold investment over and voting control over the
    units held by this unitholder. The unitholder is an affiliate of
    Agile Securities Inc., a broker-dealer registered under
    Section 15 of the Securities Exchange Act of 1934, as
    amended. 
  (2)
    
    Shawn Sullivan is the Managing Director of Credit Suisse Group,
    which is the sole shareholder of Credit Suisse (USA), Inc.,
    which is the sole Member of this selling unitholder. By virtue
    of his position with Credit Suisse Group, Mr. Sullivan is
    deemed to hold investment power and voting control over the
    units held by this unitholder. The unitholder is an affiliate of
    Credit Suisse Securities (USA) LLC, a Broker-Dealer registered
    under Section 15 of the Securities Exchange Act of 1934, as
    amended.(3)
    
    Brett S. Messing and Steven A. Sugarman are members of GPS
    Partners L.L.C., which is the General Partner of and investment
    advisor to this selling unitholder. By virtue of their position
    with GPS Partners L.L.C., Mr. Messing and Mr. Sugarman
    are deemed to hold investment power and voting control over the
    units held by this unitholder.(4)
    
    Matthew W. Quigley is the Senior Vice President of GSO
    Associates LLC, which is the General Partner of this selling
    unitholder. By virtue of his position with GSO Associates LLC,
    Mr. Quigley is deemed to hold investment power and voting
    control over the units held by this unitholder.(5)
    
    David J. Martinelli, Managing Partner; Eric M. Conklin,
    Portfolio Manager; and Anthony J. Merhige, Chief Administrative
    Officer & General Counsel are deemed to hold
    investment power and voting control over the units held by this
    unitholder.(6)
    
    I.J. Chip Berthelot, II is deemed to hold
    shared investment power and voting control over the units held
    by this selling unitholder.(7)
    
    John Harkrider is the Chief Financial Officer Kenmont Investment
    Management, L.P., which is the Investment Manager of this
    selling unitholder. By virtue of his position with Kenmont
    Investment Management, L.P., Mr. Harkrider is deemed to
    hold investment power and voting control over the units held by
    this selling unitholder.(8)
    
    Laser Midstream Company, LLC is the managing manager of Laser
    Midstream Energy II, LLC. I.J. Chip Berthelot is the
    president of Laser Midstream Company, LLC and is deemed to hold
    investment power and voting control over the units held by this
    selling unitholder.(9)
    
    Walter Maloney, Managing Director; Tom Regazzi, Vice President,
    and Matias Bercun, associate, are deemed to hold investment
    power and voting control over the units held by this unitholder.
    This unitholder is a broker-dealer registered under
    Section 15 of the Securities Exchange Act of 1934, as
    amended.(10)
    
    Michael Cannon, Kyriacos Loupis, and Jeffrey Wood are deemed to
    hold investment owner and voting control over the units held by
    this unitholder. This unitholder is an affiliate of Lehman
    Brothers Inc., a broker-dealer registered under Section 15
    of the Securities Exchange Act of 1934, as amended.(11)
    
    Joseph A. Mills is Chief Executive Officer and Chairman of the
    Board of Eagle Rock Energy G&P, LLC, as well as serving as
    Chief Executive Officer and manager of Montierra Management LLC
    and thus may also be deemed to hold voting, dispositive, and
    other investment power over the common units.(12)
    
    Joseph A. Mills is Chief Executive Officer and Chairman of the
    Board of Eagle Rock Energy G&P, LLC, as well as serving as
    Chief Executive Officer and manager of Montierra Management LLC,
    the general partner of Montierra Minerals &
    Production, L.P., and thus may also be deemed to hold voting,
    dispositive, and other investment power over the common units.(13)
    
    New Mountain Vantage Advisors, L.L.C. acts as the investment
    advisor and manager of this unitholder. By virtue of this
    relationship, Steven B. Klinsky, managing member of New Mountain
    Vantage Advisors, L.L.C., is deemed to hold investment power and
    voting control over the units held by this unitholder.(14)
    
    Kenneth A. Hersh is a director of Eagle Rock Energy G&P,
    LLC and is an Authorized Member of the ultimate general partner
    of this unitholder, and thus may also be deemed to hold
    investment power and voting control over the units held by this
    unitholder. 91




---



##### Table of Contents



(15)
    
    Carol Calhoun is the Chief Operating Officer of this selling
    unitholder and is deemed to hold investment power and voting
    control over the units held by this selling unitholder.(16)
    
    Robert Raymond is the sole member of RR Advisors, L.L.C. which
    is the investment advisor and General Partner to RCH Energy MLP
    Fund, L.P.; RCH Energy MLP Fund A, L.P.; and RCH Energy
    Opportunity Fund I, L.P. By virtue of his position with RR
    Advisors, L.L.C., Mr. Raymond is deemed to hold investment
    power and voting control over the units held by this unitholder.(17)
    
    Robert Raymond is the sole Member of RR Advisors, LLC, which is
    the General Partner of RCH Energy Opportunity Fund I GP,
    L.P., which is the General Partner of this selling unitholder.
    By virtue of his position with RR Advisors, LLC,
    Mr. Raymond is deemed to hold investment power and voting
    control over the units held by this unitholder.(18)
    
    David Weiner, Managing Director, is deemed to hold investment
    power and voting control over the units held by this unitholder.
    This unitholder is an affiliate with the following
    broker-dealers registered under Section 15 of the
    Securities Exchange Act of 1934, as amended: RBC Capital Markets
    Corporation and RBC Dain Rauscher Inc.(19)
    
    Donna Weber is the sole general partner of this selling
    unitholder and is deemed to hold investment power and voting
    control over the units held by this selling unitholder.(20)
    
    Charles C. Stephenson, Jr. is a Partner of this selling
    unitholder and is deemed to hold investment power and voting
    control over the units held by this selling unitholder.(21)
    
    Deutsche Bank AG, a German banking corporation, holds voting and
    dispositive power with respect to the shares held by the selling
    unitholder. Deutsche Bank Securities Inc., an affiliate of the
    selling unitholder, is a broker-dealer registered pursuant to
    Section 15(b) of the Securities Exchange Act of 1934 and a
    member of the NASD.(22)
    
    Jerry Swank is the Managing Partner of this selling unitholder
    and is deemed to hold investment power and voting control over
    the units held by this selling unitholder. 
  (23)
    
    Tortoise Capital Advisors, LLC (TCA) serves as the
    investment advisor to the selling unitholder. Pursuant to the
    Investment Advisory Agreement entered into with the selling
    unitholder, TCA holds voting and dispositive power with respect
    to the units held by the selling unitholder. The investment
    committee of TCA is responsible for the investment management of
    the selling unitholders portfolio. The investment
    committee is comprised of H. Kevin Birzer, Zachary A.
    Hamel, Kenneth P. Malvey, Terry C. Matlack and
    David J. Schulte. 
  (24)
    
    Stuart Zimmer and Craig Lucas as managing members are deemed to
    share investment power and voting control over the units held by
    this unitholder. 92




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##### Table of Contents



CERTAIN
    RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
 
   
  Distributions
    and Payments to Our General Partner and its Affiliates
    Formation
    Stage
  The consideration received by Eagle Rock Holdings, L.P. and its
    subsidiaries and private investors who invested in March and
    June 2006 for the contribution of the assets and liabilities to
    us

 3,459,236 common units (1,463,785 common units were
    redeemed on November 21, 2006 in connection with exercise by the
    underwriters of their over-allotment option); 20,691,495 subordinated units; 844,551 general partner units;   the incentive distribution rights;   cash payment of approximately $35.0
    million from the proceeds of our initial public offering to
    replenish working capital that will be distributed to certain
    subsidiaries of Eagle Rock Holdings, L.P. and certain of the
    selling unitholders prior to the consummation of our initial
    public offering;   cash payment of approximately $184.8
    million from the proceeds of our initial public offering as
    reimbursement for capital expenditures incurred by Eagle Rock
    Holdings, L.P. and certain of the selling unitholders prior to
    the closing of our initial public offering related to the assets
    to be contributed to us upon the closing of our initial public
    offering;   cash payment of approximately $11.0
    million from the proceeds of our initial public offering in
    respect of arrearages on the existing subordinated and general
    partner units of Eagle Rock Pipeline, L.P. owned by Eagle Rock
    Holdings, L.P.  93




---



##### Table of Contents



Operational
    Stage
  
 Distributions of available cash to our general partner and its
    affiliates

We will generally make cash distributions 98.84% to our
    unitholders pro rata, including Eagle Rock Holdings, L.P. as the
    holder of an aggregate 2,187,871 common units and 20,691,495
    subordinated units, and 1.16% to our general partner, assuming
    it makes any capital contributions necessary to maintain its
    current 1.16% interest in us. In addition, if distributions
    exceed the minimum quarterly distribution and other higher
    target distribution levels, our general partner will be entitled
    to increasing percentages of the distributions, up to 49.16% of
    the distributions above the highest target distribution level.Assuming we have sufficient available cash to pay the full
    minimum quarterly distribution on all of our outstanding units
    for four quarters, our general partner and its affiliates would
    receive an annual distribution of approximately $1.2 million on
    their general partner units and $33.2 million on their common
    and subordinated units.Payments to our general partner and its affiliates

Our general partner and its affiliates will be entitled to
    reimbursement for all expenses it incurs on our behalf,
    including salaries and employee benefit costs for its employees
    who provide services to us, and all other necessary or
    appropriate expenses allocable to us or reasonably incurred by
    our general partner and its affiliates in connection with
    operating our business. The partnership agreement provides that
    our general partner will determine the expenses that are
    allocable to us in good faith.Withdrawal or removal of our general partner

If our general partner withdraws or is removed, its general
    partner interest and its incentive distribution rights will
    either be sold to the new general partner for cash or converted
    into common units, in each case for an amount equal to the fair
    market value of those interests. Please read The A
    Partnership Agreement  Withdrawal or Removal of the
    General Partner.  
  Liquidation
    Stage
  Liquidation

Upon our liquidation, the partners, including our general
    partner, will be entitled to receive liquidating distributions
    according to their respective capital account balances.   Agreements
    Governing the Transactions
   94




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Omnibus
    Agreement
    
    our obligation to reimburse Eagle Rock Energy G&P, LLC and
    Eagle Rock Holdings, L.P. the payment of operating expenses,
    including salary and benefits of operating personnel, they incur
    on our behalf in connection with our business and operations;
    our obligation to reimburse Eagle Rock Energy G&P, LLC and
    Eagle Rock Holdings, L.P. for insurance coverage expenses they
    incur with respect to our business and operations and with
    respect to director and officer liability coverage; and
    the obligation of Eagle Rock Energy G&P, LLC, Eagle Rock
    Holdings, L.P. and our general partner to indemnify us for
    certain environmental and other liabilities.      Reimbursement
    of Operating and General and Administrative Expense
      Indemnification
   95




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Competition
    MGS
    Purchase Agreement
  1-for-0.719
  Montierra
    and Co-Invest Agreement
     96




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Redman
    and Co-Invest Agreement
      Registration
    Rights Agreement
      Other
     97




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and/or
 
  CONFLICTS
    OF INTEREST AND FIDUCIARY DUTIES
  Conflicts
    of Interest
        
    approved by the conflicts committee of our general partner,
    although our general partner is not obligated to seek such
    approval;
    approved by the vote of a majority of the outstanding common
    units, excluding any common units owned by our general partner
    or any of its affiliates;
    on terms no less favorable to us than those generally being
    provided to or available from unrelated third parties; or
    fair and reasonable to us, taking into account the totality of
    the relationships among the parties involved, including other
    transactions that may be particularly favorable or advantageous
    to us.   98




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Transactions
    with NGP Affiliates.
  Our
    general partners affiliates may engage in competition with
    us.
    Our
    general partner and its affiliates are allowed to take into
    account the interests of parties other than us in resolving
    conflicts of interest.
    We
    will not have any employees and will rely on the employees of
    Eagle Rock Energy G&P, LLC and its
    affiliates.
    Our
    general partner has limited its liability and reduced its
    fiduciary duties, and has also restricted the remedies available
    to our unitholders for actions that, without such limitations,
    might otherwise constitute breaches of fiduciary
    duty.
    
    provides that the general partner shall not have any liability
    to us or our unitholders for decisions made in its capacity as a
    general partner so long as it acted in good faith, meaning it
    believed that the decision was in the best interests of our
    partnership;
    generally provides that affiliated transactions and resolutions
    of conflicts of interest not approved by the conflicts committee
    of the board of directors of Eagle Rock Energy G&P, LLC and
    not involving a vote of unitholders must be on terms no less
    favorable to us than those generally being provided to or
    available from unrelated third parties or be fair and
    reasonable to us, as determined by the general partner in
    good faith, and that, in determining whether a transaction or
    resolution is fair and reasonable, Eagle Rock Energy
    G&P, LLC may consider the totality of the relationships
    between the parties involved, including other transactions that
    may be particularly advantageous or beneficial to us; and
    provides that our general partner and Eagle Rock Energy
    G&P, LLC and their officers and directors will not be
    liable for monetary damages to us, our limited partners or
    assignees for any acts or omissions unless there has been a
    final and non-appealable judgment entered by a court of
    competent 99




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jurisdiction determining that our general partner or those other
    persons acted in bad faith or engaged in fraud or willful
    misconduct.  Except
    in limited circumstances, our general partner has the power and
    authority to conduct our business without unitholder
    approval.
    
    the making of any expenditures, the lending or borrowing of
    money, the assumption or guarantee of or other contracting for,
    indebtedness and other liabilities, the issuance of evidences of
    indebtedness, including indebtedness that is convertible into
    our securities, and the incurring of any other obligations;
    the purchase, sale or other acquisition or disposition of our
    securities, or the issuance of additional options, rights,
    warrants and appreciation rights relating to our securities;
    the mortgage, pledge, encumbrance, hypothecation or exchange of
    any or all of our assets;
    the negotiation, execution and performance of any contracts,
    conveyances or other instruments;
    the distribution of our cash;
    the selection and dismissal of employees and agents, outside
    attorneys, accountants, consultants and contractors and the
    determination of their compensation and other terms of
    employment or hiring;
    the maintenance of insurance for our benefit and the benefit of
    our partners;
    the formation of, or acquisition of an interest in, the
    contribution of property to, and the making of loans to, any
    limited or general partnerships, joint ventures, corporations,
    limited liability companies or other relationships;
    the control of any matters affecting our rights and obligations,
    including the bringing and defending of actions at law or in
    equity and otherwise engaging in the conduct of litigation,
    arbitration or mediation and the incurring of legal expense and
    the settlement of claims and litigation;
    the indemnification of any person against liabilities and
    contingencies to the extent permitted by law;
    the making of tax, regulatory and other filings, or rendering of
    periodic or other reports to governmental or other agencies
    having jurisdiction over our business or assets; and
    the entering into of agreements with any of its affiliates to
    render services to us or to itself in the discharge of its
    duties as our general partner.    Our
    general partner determines the amount and timing of asset
    purchases and sales, capital expenditures, borrowings, issuance
    of additional partnership securities and the creation, reduction
    or increase of reserves, each of which can affect the amount of
    cash that is distributed to our unitholders.
    
    amount and timing of asset purchases and sales;
    cash expenditures; 100




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
    borrowings;
    the issuance of additional units; and
    the creation, reduction or increase of reserves in any quarter.      
    enabling our general partner or its affiliates to receive
    distributions on any subordinated units held by them or the
    incentive distribution rights; or
    hastening the expiration of the subordination period.      Our
    general partner determines which costs incurred by it or Eagle
    Rock Energy G&P, LLC are reimbursable by us.
    Our
    partnership agreement does not restrict our general partner from
    causing us to pay it or its affiliates for any services rendered
    to us or entering into additional contractual arrangements with
    any of these entities on our behalf.
     101




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Our
    general partner intends to limit its liability regarding our
    obligations.
    Our
    general partner may exercise its right to call and purchase
    common units if it and its affiliates own more than 80% of the
    common units.
    Common
    unitholders will have no right to enforce obligations of our
    general partner and its affiliates under agreements with
    us.
    Our
    general partner decides whether to retain separate counsel,
    accountants or others to perform services for us.
    Fiduciary
    Duties
     102




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State-law fiduciary
    duty standards

Fiduciary duties are generally considered to include an
    obligation to act in good faith and with due care and loyalty.
    The duty of care, in the absence of a provision in a partnership
    agreement providing otherwise, would generally require a general
    partner to act for the partnership in the same manner as a
    prudent person would act on his own behalf. The duty of loyalty,
    in the absence of a provision in a partnership agreement
    providing otherwise, would generally prohibit a general partner
    of a Delaware limited partnership from taking any action or
    engaging in any transaction where a conflict of interest is
    present.The Delaware Act generally provides that a limited partner may
    institute legal action on behalf of the partnership to recover
    damages from a third party where a general partner has refused
    to institute the action or where an effort to cause a general
    partner to do so is not likely to succeed. In addition, the
    statutory or case law of some jurisdictions may permit a limited
    partner to institute legal action on behalf of himself and all
    other similarly situated limited partners to recover damages
    from a general partner for violations of its fiduciary duties to
    the limited partners.Partnership agreement
    modified standards

Our partnership agreement contains provisions that waive or
    consent to conduct by our general partner and its affiliates
    that might otherwise raise issues about compliance with
    fiduciary duties or applicable law. For example, our partnership
    agreement provides that when our general partner is acting in
    its capacity as our general partner, as opposed to in its
    individual capacity, it must act in good faith and
    will not be subject to any other standard under applicable law.
    In addition, when our general partner is acting in its
    individual capacity, as opposed to in its capacity as our
    general partner, it may act without any fiduciary obligation to
    us or the unitholders whatsoever. These standards reduce the
    obligations to which our general partner would otherwise be held.In addition to the other more specific provisions limiting the
    obligations of our general partner, our partnership agreement
    further provides that our general partner and its officers and
    directors will not be liable for monetary damages to us, our
    limited partners or assignees for errors of judgment or for any
    acts or omissions unless there has been a final and
    non-appealable judgment by a court of competent jurisdiction
    determining that the general partner or its officers and
    directors acted in bad faith or engaged in fraud or willful
    misconduct.Special provisions regarding affiliated transactions. Our
    partnership agreement generally provides that affiliated
    transactions and resolutions of conflicts of interest not
    involving a vote of unitholders and that are not approved by the
    conflicts committee of the board of directors of our general
    partner must be:   on terms no less favorable to us than
    those generally being provided to or available from unrelated
    third parties; or fair and reasonableto us, taking
    into account the totality of the relationships between the
    parties involved (including other transactions that may be
    particularly favorable or advantageous to us).If our general partner does not seek approval from the conflicts
    committee and its board of directors determines that the
    resolution or course of action taken with respect to the
    conflict of interest satisfies either of the standards set forth
    in the bullet points above, then it will be presumed that, in
    making its decision, the board of directors, which may include
    board members affected by the conflict of interest, acted in
    good faith and in any proceeding brought by or on behalf of any
    limited partner or the partnership, the person bringing or
    prosecuting such proceeding will have the burden of overcoming
    such presumption. These standards reduce the obligations to
    which our general partner would otherwise be held.    103




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DESCRIPTION
    OF THE COMMON UNITS
  The
    Units
    Transfer
    Agent and Registrar
  Duties.
  
    surety bond premiums to replace lost or stolen certificates,
    taxes and other governmental charges;
    special charges for services requested by a common
    unitholder; and
    other similar fees or charges.    Resignation or Removal.
 104




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Transfer
    of Common Units
    
    represents that the transferee has the capacity, power and
    authority to become bound by our partnership agreement;
    automatically agrees to be bound by the terms and conditions of,
    and is deemed to have executed, our partnership
    agreement; and
    gives the consents and approvals contained in our partnership
    agreement, such as the approval of all transactions and
    agreements that we are entering into in connection with our
    formation and our initial public offering.          THE
    PARTNERSHIP AGREEMENT
  The following is a summary of the material provisions of our
    partnership agreement. The form of our partnership agreement is
    filed as an exhibit with the registration statement of which
    this prospectus is a part. We will provide prospective investors
    with a copy of our partnership agreement upon request at no
    charge.
    
    with regard to distributions of available cash, please read
    Provisions of Our Partnership Agreement Relating to Cash
    Distributions;
    with regard to the fiduciary duties of our general partner,
    please read Conflicts of Interest and Fiduciary
    Duties;
    with regard to the transfer of common units, please read
    Description of the Common Units  Transfer of
    Common Units; and
    with regard to allocations of taxable income and taxable loss,
    please read Material Tax Consequences.  Organization
    and Duration
    Purpose
   105




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Power of
    Attorney
    Cash
    Distributions
    Capital
    Contributions
      Voting
    Rights
    
    during the subordination period, the approval of a majority of
    the common units, excluding those common units held by our
    general partner and its affiliates, and a majority of the
    subordinated units, voting as separate classes; and
    after the subordination period, the approval of a majority of
    the common units voting as a class.    106




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Issuance of additional units

No approval right.Amendment of the partnership agreement

Certain amendments may be made by the general partner without
    the approval of the unitholders. Other amendments generally
    require the approval of a unit majority. Please read
     Amendment of the Partnership Agreement.Merger of our partnership or the sale of all or
    substantially all of our assets

Unit majority in certain circumstances. Please read
     Merger, Consolidation, Conversion, Sale or
    Other Disposition of Assets.Dissolution of our partnership

Unit majority. Please read  Termination and
    Dissolution.Continuation of our business upon dissolution

Unit majority. Please read  Termination and
    Dissolution.Withdrawal of the general partner

Under most circumstances, the approval of a majority of the
    common units, excluding common units held by our general partner
    and its affiliates, is required for the withdrawal of our
    general partner prior to September 30, 2016 in a manner that
    would cause a dissolution of our partnership. Please read
     Withdrawal or Removal of the General
    Partner.Removal of the general partner

Not less than
    662/3%
    of the outstanding units, voting as a single class, including
    units held by our general partner and its affiliates. Please
    read  Withdrawal or Removal of the General
    Partner.Transfer of the general partner interest

Our general partner may transfer all, but not less than all, of
    its general partner interest in us without a vote of our
    unitholders to an affiliate or another person in connection with
    its merger or consolidation with or into, or sale of all or
    substantially all of its assets, to such person. The approval of
    a majority of the common units, excluding common units held by
    the general partner and its affiliates, is required in other
    circumstances for a transfer of the general partner interest to
    a third party prior to September 30, 2016. See
     Transfer of General Partner Units.Transfer of ownership interests in our general partner

No approval required at any time. Please read
     Transfer of Ownership Interests in the General
    Partner.   Limited
    Liability
    
    to remove or replace the general partner;
    to approve some amendments to the partnership agreement; or
    to take other action under the partnership agreement;
    constituted participation in the control of our
    business for the purposes of the Delaware Act, then the limited
    partners could be held personally liable for our obligations
    under the laws of Delaware, to the same extent as the general
    partner. This liability would extend to persons who transact
    business with us who reasonably believe that the limited partner
    is a general partner. Neither the partnership agreement nor the
    Delaware Act specifically provides for 107




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legal recourse against the general partner if a limited partner
    were to lose limited liability through any fault of the general
    partner. While this does not mean that a limited partner could
    not seek legal recourse, we know of no precedent for this type
    of a claim in Delaware case law.        Issuance
    of Additional Securities
         108




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Amendment
    of the Partnership Agreement
  General.
  Prohibited Amendments.
  
    enlarge the obligations of any limited partner without its
    consent, unless approved by at least a majority of the type or
    class of limited partner interests so affected; or
    enlarge the obligations of, restrict in any way any action by or
    rights of, or reduce in any way the amounts distributable,
    reimbursable or otherwise payable by us to our general partner
    or any of its affiliates without the consent of our general
    partner, which consent may be given or withheld at its option. 
   
  No Unitholder Approval.
  
    a change in our name, the location of our principal place of our
    business, our registered agent or our registered office;
    the admission, substitution, withdrawal or removal of partners
    in accordance with our partnership agreement;
    a change that our general partner determines to be necessary or
    appropriate to qualify or continue our qualification as a
    limited partnership or a partnership in which the limited
    partners have limited liability under the laws of any state or
    to ensure that neither we nor the operating partnership nor any
    of its subsidiaries will be treated as an association taxable as
    a corporation or otherwise taxed as an entity for federal income
    tax purposes;
    an amendment that is necessary, in the opinion of our counsel,
    to prevent us or our general partner or its directors, officers,
    agents or trustees from in any manner being subjected to the
    provisions of the Investment Company Act of 1940, the Investment
    Advisors Act of 1940, or plan asset regulations
    adopted under the Employee Retirement Income Security Act of
    1974, or ERISA, whether or not substantially similar to plan
    asset regulations currently applied or proposed; 109




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
    an amendment that our general partner determines to be necessary
    or appropriate for the authorization of additional partnership
    securities or rights to acquire partnership securities,
    including any amendment that our general partner determines is
    necessary or appropriate in connection with:
    the adjustments of the minimum quarterly distribution, first
    target distribution, second target distribution and third target
    distribution in connection with the reset of our general
    partners incentive distribution rights as described under
    Provisions of Our Partnership Agreement Relating to Cash
    Distributions  General Partners Right to Reset
    Incentive Distribution Levels;
    any modification of the incentive distribution rights made in
    connection with the issuance of additional partnership
    securities or rights to acquire partnership securities, provided
    that, any such modifications and related issuance of partnership
    securities have received approval by a majority of the members
    of the conflicts committee of our general partner;
    any amendment expressly permitted in our partnership agreement
    to be made by our general partner acting alone;
    an amendment effected, necessitated or contemplated by a merger
    agreement that has been approved under the terms of our
    partnership agreement;
    any amendment that our general partner determines to be
    necessary or appropriate for the formation by us of, or our
    investment in, any corporation, partnership or other entity, as
    otherwise permitted by our partnership agreement;
    a change in our fiscal year or taxable year and related changes;
    conversions into, mergers with or conveyances to another limited
    liability entity that is newly formed and has no assets,
    liabilities or operations at the time of the conversion, merger
    or conveyance other than those it receives by way of the
    conversion, merger or conveyance; or
    any other amendments substantially similar to any of the matters
    described in the clauses above.    
    do not adversely affect the limited partners (or any particular
    class of limited partners) in any material respect;
    are necessary or appropriate to satisfy any requirements,
    conditions or guidelines contained in any opinion, directive,
    order, ruling or regulation of any federal or state agency or
    judicial authority or contained in any federal or state statute;
    are necessary or appropriate to facilitate the trading of
    limited partner interests or to comply with any rule,
    regulation, guideline or requirement of any securities exchange
    on which the limited partner interests are or will be listed for
    trading;
    are necessary or appropriate for any action taken by our general
    partner relating to splits or combinations of units under the
    provisions of our partnership agreement; or
    are required to effect the intent expressed in this prospectus
    or the intent of the provisions of our partnership agreement or
    are otherwise contemplated by our partnership agreement.  Opinion of Counsel and Unitholder
    Approval.
 110




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Merger,
    Consolidation, Conversion, Sale or Other Disposition of
    Assets
        Termination
    and Dissolution
    
    the election of our general partner to dissolve us, if approved
    by the holders of units representing a unit majority;
    there being no limited partners, unless we are continued without
    dissolution in accordance with applicable Delaware law;
    the entry of a decree of judicial dissolution of our
    partnership; or
    the withdrawal or removal of our general partner or any other
    event that results in its ceasing to be our general partner
    other than by reason of a transfer of its general partner
    interest in accordance with our partnership agreement or
    withdrawal or removal following approval and admission of a
    successor.   111




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
    the action would not result in the loss of limited liability of
    any limited partner; and
    neither our partnership, our operating partnership nor any of
    our other subsidiaries would be treated as an association
    taxable as a corporation or otherwise be taxable as an entity
    for federal income tax purposes upon the exercise of that right
    to continue.  Liquidation
    and Distribution of Proceeds
    Withdrawal
    or Removal of the General Partner
     
  2 3 1 3
 
 112




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
    the subordination period will end, and all outstanding
    subordinated units will immediately convert into common units on
    a one-for-one basis;
    any existing arrearages in payment of the minimum quarterly
    distribution on the common units will be extinguished; and
    our general partner will have the right to convert its general
    partner interest and its incentive distribution rights into
    common units or to receive cash in exchange for those interests
    based on the fair market value of those interests at that time.        Transfer
    of General Partner Units
    
    an affiliate of our general partner (other than an
    individual); or
    another entity as part of the merger or consolidation of our
    general partner with or into another entity or the transfer by
    our general partner of all or substantially all of its assets to
    another entity, our general partner may not transfer all or any
    of its general partner units to another person prior to
    September 30, 2016 without the approval of the holders of
    at least a majority of the outstanding common units, excluding
    common units held by our general partner and its affiliates. As
    a condition of this transfer, the transferee must assume, among
    other things, the rights and duties of our general partner,
    agree to be bound by the provisions of our partnership
    agreement, and furnish an opinion of counsel regarding limited
    liability and tax matters.   113




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Transfer
    of Ownership Interests in the General Partner
    Transfer
    of Incentive Distribution Rights
    Change of
    Management Provisions
      
    the subordination period will end and all outstanding
    subordinated units will immediately convert into common units on
    a one-for-one basis;
    any existing arrearages in payment of the minimum quarterly
    distribution on the common units will be extinguished; and
    our general partner will have the right to convert its general
    partner units and its incentive distribution rights into common
    units or to receive cash in exchange for those interests based
    on the fair market value of those interests at that time.  Limited
    Call Right
    
    the highest cash price paid by either of our general partner or
    any of its affiliates for any limited partner interests of the
    class purchased within the 90 days preceding the date on
    which our general partner first mails notice of its election to
    purchase those limited partner interests; and
    the current market price as of the date three days before the
    date the notice is mailed.
    As a result of our general partners right to purchase
    outstanding limited partner interests, a holder of limited
    partner interests may have his limited partner interests
    purchased at a price that may be lower 114




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than market prices at various times prior to such purchase or
    lower than a unitholder may anticipate the market price to be in
    the future. The tax consequences to a unitholder of the exercise
    of this call right are the same as a sale by that unitholder of
    his common units in the market. Please read Material Tax
    Consequences  Disposition of Common Units.  Meetings;
    Voting
          Status as
    Limited Partner
    Non-Citizen
    Assignees; Redemption
   115




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Indemnification
    
    our general partner;
    any departing general partner;
    any person who is or was an affiliate of a general partner or
    any departing general partner;
    any person who is or was a director, officer, member, partner,
    fiduciary or trustee of any entity set forth in the preceding
    three bullet points;
    any person who is or was serving as director, officer, member,
    partner, fiduciary or trustee of another person at the request
    of our general partner or any departing general partner; and
    any person designated by our general partner.    Reimbursement
    of Expenses
    Books and
    Reports
       116




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Right to
    Inspect Our Books and Records
    
    a current list of the name and last known address of each
    partner;
    a copy of our tax returns;
    information as to the amount of cash, and a description and
    statement of the agreed value of any other property or services,
    contributed or to be contributed by each partner and the date on
    which each partner became a partner;
    copies of our partnership agreement, our certificate of limited
    partnership, related amendments and powers of attorney under
    which they have been executed;
    information regarding the status of our business and financial
    condition; and
    any other information regarding our affairs as is just and
    reasonable.    Registration
    Rights
    UNITS
    ELIGIBLE FOR FUTURE SALE
     117




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
    1% of the total number of the securities outstanding; or
    the average weekly reported trading volume of the common units
    for the four calendar weeks prior to the sale.        
    subject to certain restrictions to file with the SEC, within
    90 days after the receipt of a request by Eagle Rock
    Holdings, a registration statement (a shelf registration
    statement);
    to use our commercially reasonable efforts to cause the shelf
    registration statement to become effective under the Securities
    Act within 180 days after the receipt of a request by Eagle
    Rock Holdings;
    to continuously maintain the effectiveness of the shelf
    registration statement under the Securities Act until the common
    units covered by the shelf registration statement have been
    sold, transferred or otherwise disposed of:  
    pursuant to the shelf, or any other, registration statement;
    pursuant to Rule 144 under the Securities Act;
    to us or any of our subsidiaries; or
    in a private transaction in which the transferors rights
    under the registration rights agreement are not assigned to the
    transferee of the common units. 
   
   118




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MATERIAL
    TAX CONSEQUENCES
           119




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Partnership
    Status
                 120




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Limited
    Partner Status
    
    assignees who have executed and delivered transfer applications,
    and are awaiting admission as limited partners, and
    unitholders whose common units are held in street name or by a
    nominee and who have the right to direct the nominee in the
    exercise of all substantive rights attendant to the ownership of
    their common units,        Tax
    Consequences of Unit Ownership
  Flow-Through of Taxable Income.
  Treatment of Distributions.
 121




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and/or
  Basis of Common Units.
  Limitations on Deductibility of Losses.
    activity-by-activity
 122




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Limitations on Interest Deductions.
  
    interest on indebtedness properly allocable to property held for
    investment;
    our interest expense attributed to portfolio income; and
    the portion of interest expense incurred to purchase or carry an
    interest in a passive activity to the extent attributable to
    portfolio income.    Entity-Level Collections.
  Allocation of Income, Gain, Loss and
    Deduction.
 123




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
    his relative contributions to us;
    the interests of all the partners in profits and losses;
    the interest of all the partners in cash flow; and
    the rights of all the partners to distributions of capital upon
    liquidation.    Treatment of Short Sales.
  
    any of our income, gain, loss or deduction with respect to those
    units would not be reportable by the unitholder;
    any cash distributions received by the unitholder as to those
    units would be fully taxable; and
    all of these distributions would appear to be ordinary income.   124




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Alternative Minimum Tax.
  Tax Rates.
  Section 754 Election.
  Regulation Section 1.167(c)-1(a)(6),
  non-amortizable Regulation Section 1.167(c)-1(a)(6), Regulation 1.197-2(g)(3).
   125




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Tax
    Treatment of Operations
  Accounting Method and Taxable Year.
  Depletion Deductions.
     126




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##### Table of Contents



Initial Tax Basis, Depreciation and
    Amortization.
        Valuation and Tax Basis of Our Properties.
 127




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##### Table of Contents



Disposition
    of Common Units
  Recognition of Gain or Loss.
         128




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
    a short sale;
    an offsetting notional principal contract; or
    a futures or forward contract with respect to the partnership
    interest or substantially identical property.    Allocations Between Transferors and
    Transferees.
      Notification Requirements.
  Constructive Termination.
 129




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Uniformity
    of Units
  Regulation Section 1.167(c)-1(a)(6) Regulation Section 1.197-2(g)(3).
  Regulation Section 1.167(c)-1(a)(6), Regulation Section 1.197-2(g)(3).
  Tax-Exempt
    Organizations and Other Investors
      Form W-8BEN
 130




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##### Table of Contents



Administrative
    Matters
  Information Returns and Audit Procedures. Schedule K-1,
       131




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Nominee Reporting.
                  Accuracy-Related Penalties.
            Reportable Transactio
 132




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
    accuracy-related penalties with a broader scope, significantly
    narrower exceptions, and potentially greater amounts than
    described above at  Accuracy-Related
    Penalties,
    for those persons otherwise entitled to deduct interest on
    federal tax deficiencies, nondeductibility of interest on any
    resulting tax liability and
    in the case of a listed transaction, an extended statute of
    limitations.    State,
    Local, Foreign and Other Tax Considerations
    It is the responsibility of each unitholder to investigate
    the legal and tax consequences, under the laws of pertinent
    jurisdictions, of his investment in us. Accordingly, each
    prospective unitholder is urged to consult, and depend upon, his
    tax counsel or other advisor with regard to those matters.
    Further, it is the responsibility of each unitholder to file all
    state, local and foreign, as well as United States federal tax
    returns, that may be required of him. Thompson &
    Knight LLP has not rendered an opinion on the state, local or
    foreign tax consequences of an investment in us.
  INVESTMENT
    IN EAGLE ROCK ENERGY PARTNERS, L.P.
    BY EMPLOYEE BENEFIT PLANS
   133




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
    whether the investment is prudent under
    Section 404(a)(1)(B) of ERISA;
    whether in making the investment, that plan will satisfy the
    diversification requirements of Section 404(a)(1)(C) of
    ERISA; and
    whether the investment will result in recognition of unrelated
    business taxable income by the plan and, if so, the potential
    after-tax investment return. Please read Material Tax
    Consequences  Tax-Exempt Organizations and Other
    Investors.                    PLAN
    OF DISTRIBUTION
   134




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##### Table of Contents




    through one or more broker-dealers;
    through underwriters; or
    directly to investors.    
    at fixed prices;
    at market prices prevailing at the time of any sale under this
    registration statement;
    at prices related to prevailing market prices;
    varying prices determined at the time of sale; or
    at negotiated prices.    
    in or through one or more transactions (which may involve
    crosses and block transactions) or distributions;
    on the NASDAQ Global Market;
    through the writing of options;
    in the over-the-counter market; or
    in private transactions.           135




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VALIDITY
    OF THE COMMON UNITS
    EXPERTS
 
  Form 10-K/A
 
 
  Form 8-K
 
  Form 10-K/A
  INDEPENDENT
    ENGINEERS
    WHERE
    YOU CAN FIND MORE INFORMATION
  Form S-1 (No. 333-144938), Form S-1 (No. 333-140370),
 136




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##### Table of Contents



1-800-SEC-0330. www.sec.gov.
  Form 8-K, Form 10-Q, Form 10-K,
    CAUTIONARY
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
     137




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INCORPORATION
    BY REFERENCE
  Form 8-K):
  
    Our Annual Report on
    Form 10-K
    for the fiscal year ended December 31, 2006, filed with the
    SEC on April 2, 2007;
    Our amended Annual Report on
    Form 10-K/A
    for the fiscal year ended December 31, 2006, filed with the
    SEC on July 26, 2007.
    Our Quarterly Reports on
    Form 10-Q
    for the quarter ended March 31, 2007 and June 30,
    2007, filed with the SEC on May 15, 2007 and
    August 14, 2007, respectively; and 
  
    Our current reports on
    Forms 8-K,
    filed with the SEC on January 12, 2007, January 29,
    2007, February 14, 2007, April 4, 2007, May 4,
    2007, May 18, 2007, May 22, 2007, July 17, 2007,
    July 18, 2007, August 6, 2007, August 15, 2007,
    August 20, 2007, September 18, 2007, September 20,
    2007
    and             ,
    2007. 
   
  www.eaglerockenergy.com
 
 
   
     (281) 408-1200
  138




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APPENDIX A
  GLOSSARY
    OF TERMS
  adjusted operating surplus:
          available cash:
                provided, however, provided, further,
  Bbls:
  Bbls/d:
  Btu:
  capital account:
 A-1




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##### Table of Contents



capital surplus:
  closing price:
  condensate:
  cumulative common unit arrearage:
  current market price:
  interim capital transactions:
              gal:
  gpm:
  MMBbls:
  MMBtu:
  MMcf:
  MBbls/d:
 A-2




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##### Table of Contents



MMBtu/d:
  MMcf/d:
  NGLs:
  operating expenditures:
              operating surplus:
      per-unit
         A-3




---



##### Table of Contents



residue gas:
  subordination period:
                Tcfe:
  throughput:
 A-4




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##### Table of Contents



PART II
  INFORMATION
    REQUIRED IN THE REGISTRATION STATEMENT
  Item 13.
    Other
    Expenses of Issuance and Distribution.    
 SEC registration fee

$
Printing and engraving expenses


5,000NASDAQ Additional Listing Fee


5,000Fees and expenses of legal counsel


80,000Accounting fees and expenses


50,000Transfer agent and registrar fees


5,000Miscellaneous


5,000Total

$
150,000  
  Item 14.
    Indemnification
    of Officers and Members of Our Board of Directors.  Section 17-108
  Item 15.
    Recent
    Sales of Unregistered Securities.         II-1




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##### Table of Contents



1-for-0.719
  Item 16.
    Exhibits.    
 ExhibitNumber

Description2
.1*

Partnership Interests Purchase and Contribution Agreement By and
    Among Laser Midstream Energy II, LP, Laser Gas Company I,
    LLC, Laser Midstream Company, LLC, Laser Midstream Energy, LP,
    and Eagle Rock Energy Partners, L.P., dated as of March 30, 20072
.2*

Partnership Interests Contribution Agreement By and Among
    Montierra Minerals and Production, L.P., NGP Minerals, L.L.C.
    and Eagle Rock Energy Partners, L.P., dated as of March 31, 20072
.3*

Asset Contribution Agreement By and Among NGP 2004 Co-Investment
    Income, L.P.,
    NGP Co-Investment
    Income Capital Corp., NGP-VII Income Co-Investment Opportunity,
    L.P., dated as of March 31, 20072
.4*

Contribution and Sale Agreement By and Among Eagle Rock Energy
    Partners, L.P., Redman Energy Holdings, L.P. and Certain Other
    Parties Named Herein, dated July 11, 20072
.5*

Contribution and Sale Agreement By and Among Eagle Rock Energy
    Partners, L.P., Redman Energy Holdings II, L.P. and Certain
    Other Parties Named Herein, dated July 11, 20072
.6*

Asset Contribution Agreement By and Among NGP Co-Investment
    Opportunities Fund II, L.P. and Eagle Rock Energy Partners,
    L.P., dated July 11, 2007 
 II-2




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##### Table of Contents



ExhibitNumber

Description2
.7*

Purchase, Sale and Contribution Agreement Between AmGu Holdings
    LLC, as seller and Eagle Rock Energy Partners, L.P., as
    purchaser, dated July 11, 20073
.1

Certificate of Limited Partnership of Eagle Rock Energy
    Partners, L.P. (incorporated by reference to Exhibit 3.1 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))3
.2

Amended and Restated Agreement of Limited Partnership of Eagle
    Rock Energy Partners, L.P. (incorporated by reference to Exhibit
    3.2 of the registrants registration statement on Form S-1
    (File No. 333-134750))3
.3

Certificate of Limited Partnership of Eagle Rock Energy GP, L.P.
    (incorporated by reference to Exhibit 3.3 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))3
.4

Limited Partnership Agreement of Eagle Rock Energy GP, L.P.
    (incorporated by reference to Exhibit 3.4 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))3
.5

Certificate of Formation of Eagle Rock Energy G&P, LLC
    (incorporated by reference to Exhibit 3.5 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))3
.6

Amended and Restated Limited Liability Company Agreement of
    Eagle Rock Energy G&P, LLC (incorporated by reference to
    Exhibit 3.6 of the registrants registration statement on
    Form S-1 (File No. 333-134750))4
.1

Registration Rights Agreement dated March 27, 2006, among Eagle
    Rock Pipeline, L.P. and the Purchasers listed thereto
    (incorporated by reference to Exhibit 4.1 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))4
.2

Tag Along Agreement dated March 27, 2006, among Eagle Rock
    Pipeline, L.P., Eagle Rock Pipeline GP, LLC, Eagle Rock
    Holdings, L.P. and the Purchasers listed thereto. (incorporated
    by reference to Exhibit 4.2 of the registrants
    registration statement on Form S-1 (File No. 333-134750))4
.3

Form of Registration Rights Agreement between Eagle Rock Energy
    Partners, L.P. and Eagle Rock Holdings, L.P. (incorporated by
    reference to Exhibit 4.3 of the registrants registration
    statement on Form S-1 (File No. 333-134750))4
.4

Form of Common Unit Certificate (included as Exhibit A to the
    Amended and Restated Partnership Agreement of Eagle Rock Energy
    Partners, L.P., which is included as Appendix A to the
    Prospectus) (incorporated by reference to Exhibit 3.2 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))4
.5*

Registration Rights Agreement dated May 2, 2007, among Eagle
    Rock Energy Partners, L.P. and the purchasers listed thereto4
.6*

Registration Rights Agreement dated July 31, 2007, among Eagle
    Rock Energy Partners, L.P. and the purchasers listed thereto.5
.1**

Opinion of Thompson & Knight LLP as to the legality of the
    securities being registered.8
.1**

Opinion of Thompson & Knight LLP relating to tax matters.10
.1

Amended and Restated Credit and Guaranty Agreement (incorporated
    by reference to Exhibit 3.1 of the registrants
    registration statement on Form S-1 (File No. 333-134750))10
.2

Form of Omnibus Agreement (incorporated by reference to Exhibit
    3.1 of the registrants registration statement on Form S-1
    (File No. 333-134750))10
.3

Form of Eagle Rock Energy Partners, L.P. Long-Term Incentive
    Plan (incorporated by reference to Exhibit 10.3 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))10
.4

Sale, Contribution and Exchange Agreement by and among the
    general and limited partners of Midstream Gas Services, L.P.,
    Eagle Rock Energy Services, L.P. and Eagle Rock Pipeline, LP.
    (incorporated by reference to Exhibit 10.4 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))10
.5

Natural Gas Liquids Exchange Agreement by and between ONEOK
    Hydrocarbon, L.P. and ONEOK Texas Field Services, L.P.
    (incorporated by reference to Exhibit 10.5 of the
    registrants registration statement on Form S-1 (File No.
    333-134750)) 
 II-3




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##### Table of Contents



ExhibitNumber

Description10
.6

Gas Sales and Purchase Agreement between MC Panhandle, Inc.
    (Chesapeake Energy Marketing Inc.) and MidCon Gas Services Corp.
    (Eagle Rock Field Services, L.P.) (incorporated by reference to
    Exhibit 10.6 of the registrants registration statement on
    Form S-1 (File No. 333-134750))10
.7

Brookeland Gas Facilities Gas Gathering and Processing Agreement
    between Union Pacific Resources Company (Anadarko E&P
    Company LP) and Sonat Exploration Company (Eagle Rock Field
    Services, L.P.) (incorporated by reference to Exhibit 10.7 of
    the registrants registration statement on Form S-1 (File
    No. 333-134750))10
.8

Minimum Volume Agreement between ONEOK Texas Field Services L.P.
    and Peak Operating of Texas, LLC (incorporated by reference to
    Exhibit 10.8 of the registrants registration statement on
    Form S-1 (File No. 333-134750))10
.9

Gas Purchase Agreement between ONEOK Texas Field Services L.P.
    and Peak Operating of Texas, LLC (incorporated by reference to
    Exhibit 10.9 of the registrants registration statement on
    Form S-1
    (File No. 333-134750))10
.10

Gas Purchase Contract between Warren Petroleum Company (Eagle
    Rock Field Services, L.P.) and Wallace Oil & Gas, Inc.
    (Cimarex Energy Co.) (incorporated by reference to Exhibit 10.10
    of the registrants registration statement on Form S-1
    (File No. 333-134750))10
.11

Form of Contribution, Conveyance and Assumption Agreement
    (incorporated by reference to Exhibit 10.11 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))10
.12

Employment Agreement dated August 2, 2006 between Eagle Rock
    Energy G&P, LLC and Richard W. FitzGerald (incorporated by
    reference to Exhibit 10.12 of the registrants registration
    statement on Form S-1 (File No. 333-134750))10
.13

Base Contract for Sale and Purchase of Natural Gas between Eagle
    Rock Field Services, L.P. and Odyssey Energy Services, LLC
    (incorporated by reference to Exhibit 10.13 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))10
.14*

Common Unit Purchase Agreement By and Among Eagle Rock Energy
    Partners, L.P. and The Purchasers Named Herein, dated March 30,
    200710
.15*

Common Unit Purchase Agreement By and Among Eagle Rock Energy
    Partners, L.P. and The Purchasers Named Herein, dated July 11,
    200721
.1*

List of Subsidiaries of Eagle Rock Energy Partners, L.P.23
.1**

Consent of Deloitte & Touche LLP23
.2**

Consent of Deloitte & Touche LLP23
.3**

Consent of Deloitte & Touche LLP23
.4

Consent of Thompson & Knight LLP (contained in Exhibit 5.1)23
.5**

Consent of Cawley, Gillespie & Associates24
.1

Powers of Attorney (contained on the signature page of
    registration statement on Form S-1 (File No. 333-144938))24
.2**

Power of Attorney for William A. Smith  
    
    
    Portions of this exhibit have been omitted pursuant to a request
    for confidential treatment.*
    
    Previously filed.**
    
    Filed herewith.  Item 17.
    Undertakings.       II-4




---



##### Table of Contents



II-5




---



##### Table of Contents



SIGNATURES
 
   
  EAGLE ROCK ENERGY PARTNERS, L.P.
  By:
    Eagle Rock Energy GP, L.P., its general partnerBy:
    Eagle Rock Energy G&P, LLC, its general partnerBy:
    /s/  Joseph
    A. MillsName: Joseph
    A. Mills
    Title:   Chairman and Chief Executive Officer    
 Signature

Title

Date/s/  Joseph
    A. MillsJoseph
    A. Mills

Chairman and Chief Executive Officer (Principal Executive
    Officer)

October 2, 2007/s/  Alfredo
    GarciaAlfredo
    Garcia

Senior Vice President, Corporate Development and Acting Chief
    Financial Officer (Principal Financial and Accounting Officer)

October 2, 2007*Kenneth
    A. Hersh

Director

October 2, 2007*William
    J. Quinn

Director

October 2, 2007*John
    A. Weinzierl

Director

October 2, 2007*Philip
    B. Smith

Director

October 2, 2007*William
    K. White

Director

October 2, 2007*William
    A. Smith

Director

October 2, 2007*

/s/  Alfredo
    GarciaAttorney-in-Fact  
 II-6




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##### Table of Contents



EXHIBIT INDEX
  
 ExhibitNumber

Description2
.1*

Partnership Interests Purchase and Contribution Agreement By and
    Among Laser Midstream Energy II, LP, Laser Gas Company I,
    LLC, Laser Midstream Company, LLC, Laser Midstream Energy, LP,
    and Eagle Rock Energy Partners, L.P., dated as of March 30, 20072
.2*

Partnership Interests Contribution Agreement By and Among
    Montierra Minerals and Production, L.P., NGP Minerals, L.L.C.
    and Eagle Rock Energy Partners, L.P., dated as of March 31, 20072
.3*

Asset Contribution Agreement By and Among NGP 2004 Co-Investment
    Income, L.P.,
    NGP Co-Investment
    Income Capital Corp., NGP-VII Income Co-Investment Opportunity,
    L.P., dated as of March 31, 20072
.4*

Contribution and Sale Agreement By and Among Eagle Rock Energy
    Partners, L.P., Redman Energy Holdings, L.P. and Certain Other
    Parties Named Herein, dated July 11, 20072
.5*

Contribution and Sale Agreement By and Among Eagle Rock Energy
    Partners, L.P., Redman Energy Holdings II, L.P. and Certain
    Other Parties Named Herein, dated July 11, 20072
.6*

Asset Contribution Agreement By and Among NGP Co-Investment
    Opportunities Fund II, L.P. and Eagle Rock Energy Partners,
    L.P., dated July 11, 20072
.7*

Purchase, Sale and Contribution Agreement Between AmGu Holdings
    LLC, as seller and Eagle Rock Energy Partners, L.P., as
    purchaser, dated July 11, 20073
.1

Certificate of Limited Partnership of Eagle Rock Energy
    Partners, L.P. (incorporated by reference to Exhibit 3.1 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))3
.2

Amended and Restated Agreement of Limited Partnership of Eagle
    Rock Energy Partners, L.P. (incorporated by reference to Exhibit
    3.2 of the registrants registration statement on Form S-1
    (File No. 333-134750))3
.3

Certificate of Limited Partnership of Eagle Rock Energy GP, L.P.
    (incorporated by reference to Exhibit 3.3 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))3
.4

Limited Partnership Agreement of Eagle Rock Energy GP, L.P.
    (incorporated by reference to Exhibit 3.4 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))3
.5

Certificate of Formation of Eagle Rock Energy G&P, LLC
    (incorporated by reference to Exhibit 3.5 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))3
.6

Amended and Restated Limited Liability Company Agreement of
    Eagle Rock Energy G&P, LLC (incorporated by reference to
    Exhibit 3.6 of the registrants registration statement on
    Form S-1 (File No. 333-134750))4
.1

Registration Rights Agreement dated March 27, 2006, among Eagle
    Rock Pipeline, L.P. and the Purchasers listed thereto
    (incorporated by reference to Exhibit 4.1 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))4
.2

Tag Along Agreement dated March 27, 2006, among Eagle Rock
    Pipeline, L.P., Eagle Rock Pipeline GP, LLC, Eagle Rock
    Holdings, L.P. and the Purchasers listed thereto. (incorporated
    by reference to Exhibit 4.2 of the registrants
    registration statement on Form S-1 (File No. 333-134750))4
.3

Form of Registration Rights Agreement between Eagle Rock Energy
    Partners, L.P. and Eagle Rock Holdings, L.P. (incorporated by
    reference to Exhibit 4.3 of the registrants registration
    statement on Form S-1 (File No. 333-134750))4
.4

Form of Common Unit Certificate (included as Exhibit A to the
    Amended and Restated Partnership Agreement of Eagle Rock Energy
    Partners, L.P., which is included as Appendix A to the
    Prospectus) (incorporated by reference to Exhibit 3.2 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))4
.5*

Registration Rights Agreement dated May 2, 2007, among Eagle
    Rock Energy Partners, L.P. and the purchasers listed thereto4
.6*

Registration Rights Agreement dated July 31, 2007, among Eagle
    Rock Energy Partners, L.P. and the purchasers listed thereto.5
.1**

Opinion of Thompson & Knight LLP as to the legality of the
    securities being registered.8
.1**

Opinion of Thompson & Knight LLP relating to tax matters.10
.1

Amended and Restated Credit and Guaranty Agreement (incorporated
    by reference to Exhibit 3.1 of the registrants
    registration statement on Form S-1 (File No. 333-134750))




---



##### Table of Contents



ExhibitNumber

Description10
.2

Form of Omnibus Agreement (incorporated by reference to Exhibit
    3.1 of the registrants registration statement on Form S-1
    (File No. 333-134750))10
.3

Form of Eagle Rock Energy Partners, L.P. Long-Term Incentive
    Plan (incorporated by reference to Exhibit 10.3 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))10
.4

Sale, Contribution and Exchange Agreement by and among the
    general and limited partners of Midstream Gas Services, L.P.,
    Eagle Rock Energy Services, L.P. and Eagle Rock Pipeline, LP.
    (incorporated by reference to Exhibit 10.4 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))10
.5

Natural Gas Liquids Exchange Agreement by and between ONEOK
    Hydrocarbon, L.P. and ONEOK Texas Field Services, L.P.
    (incorporated by reference to Exhibit 10.5 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))10
.6

Gas Sales and Purchase Agreement between MC Panhandle, Inc.
    (Chesapeake Energy Marketing Inc.) and MidCon Gas Services Corp.
    (Eagle Rock Field Services, L.P.) (incorporated by reference to
    Exhibit 10.6 of the registrants registration statement on
    Form S-1 (File No. 333-134750))10
.7

Brookeland Gas Facilities Gas Gathering and Processing Agreement
    between Union Pacific Resources Company (Anadarko E&P
    Company LP) and Sonat Exploration Company (Eagle Rock Field
    Services, L.P.) (incorporated by reference to Exhibit 10.7 of
    the registrants registration statement on Form S-1 (File
    No. 333-134750))10
.8

Minimum Volume Agreement between ONEOK Texas Field Services L.P.
    and Peak Operating of Texas, LLC (incorporated by reference to
    Exhibit 10.8 of the registrants registration statement on
    Form S-1 (File No. 333-134750))10
.9

Gas Purchase Agreement between ONEOK Texas Field Services L.P.
    and Peak Operating of Texas, LLC (incorporated by reference to
    Exhibit 10.9 of the registrants registration statement on
    Form S-1
    (File No. 333-134750))10
.10

Gas Purchase Contract between Warren Petroleum Company (Eagle
    Rock Field Services, L.P.) and Wallace Oil & Gas, Inc.
    (Cimarex Energy Co.) (incorporated by reference to Exhibit 10.10
    of the registrants registration statement on Form S-1
    (File No. 333-134750))10
.11

Form of Contribution, Conveyance and Assumption Agreement
    (incorporated by reference to Exhibit 10.11 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))10
.12

Employment Agreement dated August 2, 2006 between Eagle Rock
    Energy G&P, LLC and Richard W. FitzGerald (incorporated by
    reference to Exhibit 10.12 of the registrants registration
    statement on Form S-1 (File No. 333-134750))10
.13

Base Contract for Sale and Purchase of Natural Gas between Eagle
    Rock Field Services, L.P. and Odyssey Energy Services, LLC
    (incorporated by reference to Exhibit 10.13 of the
    registrants registration statement on Form S-1 (File No.
    333-134750))10
.14*

Common Unit Purchase Agreement By and Among Eagle Rock Energy
    Partners, L.P. and The Purchasers Named Herein, dated March 30,
    200710
.15*

Common Unit Purchase Agreement By and Among Eagle Rock Energy
    Partners, L.P. and The Purchasers Named Herein, dated July 11,
    200721
.1*

List of Subsidiaries of Eagle Rock Energy Partners, L.P.23
.1**

Consent of Deloitte & Touche LLP23
.2**

Consent of Deloitte & Touche LLP23
.3**

Consent of Deloitte & Touche LLP23
.4

Consent of Thompson & Knight LLP (contained in Exhibit 5.1)23
.5**

Consent of Cawley, Gillespie & Associates24
.1

Powers of Attorney (contained on the signature page of
    registration statement on Form S-1
    (File No. 333-144938))24
.2**

Power of Attorney for William A. Smith  
    
    
    Portions of this exhibit have been omitted pursuant to a request
    for confidential treatment.*
    
    Previously filed.**
    
    Filed herewith.