* To buy Eagle Rock's assets for $1.3 billion
* To buy Hoover Energy's assets in a $290 million deal
* Eagle Rock shares rise as much as 17 pct, Regency 12 pct
By Kanika Sikka
Dec 23 (Reuters) - Regency Energy Partners LP, ownedby billionaire Kelcy Warren's Energy Transfer Equity LP,said it would buy pipeline and related assets for about $1.6billion to take advantage of soaring crude production in Texas.
The pipeline operator plans to buy assets in the TexasPanhandle from Eagle Rock Energy Partners for $1.3billion and assets in the Delaware basin from Hoover EnergyPartners for $290 million.
Eagle Rock's shares jumped as much as 17 percent to $6.17 onthe Nasdaq on Monday. Regency shares rose 12 percent to $27.21on the New York Stock Exchange.
"(The deal) is a great Christmas present for EROCunitholders," Robert Baird & Co analyst Ethan Bellamy said.
Massive growth in output from shale fields has led to ashortage of pipelines that can move crude oil to refining hubs.
Natural gas that is produced along with the oil needs to beprocessed and this has raised the premium for facilities ownedby infrastructure companies.
Texas, home to the Permian Basin and the Eagle Ford shalefield, is particularly lucrative for pipeline operators.
Texas is pumping 35 percent of the United States' oil,helping make the country the world's top crude producer,according to the Energy Information Agency.
Both Regency and Eagle Rock are structured as master limitedpartnerships (MLPs), firms that pay virtually no corporate taxesand give out nearly all their earnings to investors.
Eagle Rock cut its third-quarter cash distribution on Oct.28, citing insufficient cash flow. It shares have fallen morethan 28 percent since then.
Eagle Rock's high debt level, which stood at $1.2 billionas of Sept.30, had limited its investments in oil and gas, thecompany's chief executive, Joseph Mills, said on a conferencecall on Monday.
The company is selling about 8,100 miles of pipelines andprocessing plants with a total capacity of more than 800 millioncubic feet per day to Regency.
Regency expects the deal with Eagle Rock to immediately addto its distributable cash flow and the company is looking toraise its distribution by about 6 percent to 8 percent in 2014.
Regency said its $290 million deal with Hoover Energy isexpected to add to cash flow next year.
Monday's deals come two months after Regency agreed to buyPVR Partners LP for about $3.8 billion.
Regency has assets in the Permian Basin, South Texas andNorth Louisiana.
Energy Transfer, which is buying $400 million of Regencyunits to help fund the deal, said on Monday it would buy back $1billion of its units. Energy Transfer also announced atwo-for-one stock split.
Energy Transfer shares rose more than 4 percent to $85.08.