DALLAS, May 2 /PRNewswire-FirstCall/ --
Crosstex Energy, L.P. (Nasdaq: XTEX), a Texas-based midstream natural gas
company, today announced that it has executed an agreement for the acquisition
of a package of assets in Mississippi, Texas, Alabama and Louisiana from Duke
Energy Field Services, L.P. for $66.35 million. The transaction is expected
to close on June 30, 2003.
"This transaction is our largest acquisition to date and is an excellent
fit for us based on the timing following our IPO and the nature of the
assets," said Barry E. Davis, President and Chief Executive Officer of
Crosstex. "The acquired assets provide us with a new core area for growth in
central Mississippi, as well as the opportunity to enter into a new business
niche of carbon dioxide separation in a key area of West Texas. The
transaction is also very accretive. Assuming a fully debt-financed
transaction, we anticipate this acquisition will increase our annual
distributable cash flow by approximately $0.65 per limited partner unit. We
will give very serious consideration to an increase in distributions in the
first full quarter after the transaction closes."
The assets to be acquired are:
-- The AIM Pipeline System (previously known as Mississippi Fuels). AIM
is a major gathering and transmission system that gathers wellhead
production in south-central Mississippi and markets gas to industrial
and power plant users. Covering 15 counties, the system consists of
625 miles of 4" through 20" pipeline. Recent throughput on the
system has averaged approximately 82 MMcfd. From 1990 to 1992, while
employed by a previous owner of the system, Barry Davis had
responsibility for all commercial operations of AIM. He commented,
"The AIM system is something we've been interested in acquiring for
years. It is a strategic asset in a good market area and it is very
similar to our assets in South Texas."
-- A 12.4 percent interest in the Seminole Gas Processing Plant operated
by Amerada Hess. Located in Gaines County, Texas, the Seminole Plant
provides CO2 separation, NGL extraction, and sulfur recovery services
for several major oil companies. The facility has dedicated long-
term reserves from the Seminole San Andres Unit, with a stable
dedicated utilization of the CO2 made available for tertiary oil
recovery. The plant is in the process of completing a capacity
expansion from 150 MMcfd to 210 MMcfd that is expected to
significantly improve operating results.
-- The Conroe Gas Plant and Gathering System, which is a cryogenic gas
processing plant with 10 miles of gathering pipelines located within
the Conroe Field Unit in Montgomery County, Texas. Recent throughput
on the system has been about 30 MMcfd compared to a capacity of
approximately 65 MMcfd.
-- The Black Warrior Pipeline System, which consists of approximately
125 miles of 4" to 12" gathering systems in Alabama. The primary gas
supply is from coalbed methane gas from the Black Warrior Basin, with
recent average throughput of approximately 13,800 MMBtu per day.
-- Two small systems, Aurora Centana and Cadeville in Louisiana.
The acquisition will be financed through an expansion and amendment of the
company's existing credit facility. In addition, Crosstex is in the process
of placing term debt with an institutional lender that is expected to close by
the end of May. After the acquisition, the company's capital structure, on a
pro forma basis, will be approximately 49 percent debt and 51 percent equity.
Crosstex will host a conference call on Wednesday, May 14, 2003, at
10:00 am CDT to discuss this acquisition as well as first quarter results.
Interested parties can participate in the call by dialing the following number
approximately five minutes prior to the scheduled start time: 800-299-9086,
passcode Crosstex. This conference call will be broadcast live simultaneously
over the Internet. If you wish to listen via this method, go to the company's
Web site at http://www.crosstexenergy.com/ . Click on the Investor
Information tab and go to the Event Calendar.
A replay of the broadcast will also be available on the company's Web
site. If you have any questions concerning the call, please contact Jennifer
Tweeton at 713-970-2100.
Crosstex Energy, L.P., a mid-stream natural gas company headquartered in
Dallas, operates over 1,700 miles of pipeline, two processing plants, and
approximately 40 natural gas amine treating plants. Crosstex currently
provides services for over 700,000 MMBtu/day of natural gas. Crosstex Energy
was ranked first in the Mastio & Co. 2002 Producer Purchaser Satisfaction
Survey of nearly 400 gas producers. Additional information about Crosstex can
be found at www.crosstexenergy.com .
This press release contains "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. All statements other
than statements of historical facts included or incorporated herein may
constitute forward-looking statements. Although the Company believes that the
expectations reflected in the forward-looking statements are reasonable, it
can give no assurance that such expectations will prove to be correct.
Contact: Barry E. Davis, President and Chief Executive Officer
William W. Davis, Sr. V.P. and Chief Financial Officer
Phone: (214) 953-9500
SOURCE Crosstex Energy, L.P.
/CONTACT: Barry E. Davis, President and Chief Executive Officer, or
William W. Davis, Sr. V.P. and Chief Financial Officer, both of Crosstex
Energy, L.P., +1-214-953-9500/
/Web site: http://www.crosstexenergy.com /
CO: Crosstex Energy, L.P.; Duke Energy Field Services, L.P.
ST: Texas, Mississippi, Alabama, Louisiana
IN: OIL UTI
SU: RLE CCA MAV