DALLAS--(BUSINESS WIRE)--Oct. 31, 2008--The Crosstex Energy
companies today announced the declaration of the quarterly
distribution for Crosstex Energy, L.P. (NASDAQ: XTEX) (the
Partnership) and the quarterly dividend for Crosstex Energy, Inc.
(NASDAQ: XTXI) (the Corporation).
-- The quarterly distribution on the Partnership's common units
will be $0.50 per unit. The distribution is payable November
14 to unitholders of record November 10.
-- The quarterly dividend on the Corporation's common stock will
be $0.32 per share. The dividend is payable November 14 to
shareholders of record November 10.
"Over the last several weeks, the economy and the financial
markets have continued to decline - at rates and to levels that could
not be anticipated," said Barry E. Davis, Crosstex Chairman, President
and Chief Executive Officer. "In addition to these declines, there
also have been some significant changes that relate to Crosstex's
These significant changes include:
-- The effect of Hurricanes Gustav and Ike is more significant
than Crosstex predicted earlier. The Partnership now estimates
negative impacts of approximately $25 million in the second
half of 2008, compared with earlier estimates of less than $20
million. This is due to delays in the repair of offshore
production and pipeline facilities owned by others.
-- Commodity prices have continued to decline. Since the
beginning of October, oil prices have fallen about 32 percent,
natural gas prices about 11 percent and natural gas liquids
prices about 31 percent. These declines have impacted the
Partnership's margins expected from processing for the
remainder of 2008 and 2009.
-- In the North Texas Barnett Shale play, continued delays in
infrastructure development, equipment delivery and
right-of-way access have led to further delays in the growth
of volumes on the Partnership's systems.
-- Gas producers have revised their drilling budgets as they
react to turbulent capital market conditions. Consequently,
the Partnership has adjusted its business outlook to account
for the general slowdown in industry drilling activity.
"As these issues worsened during the last few weeks and we looked
at the revised 2009 outlook for our business, it became clear to us
that we needed to make quick and decisive adjustments to our overall
strategy," said Davis. "Our near-term strategy focuses on immediate
actions that are designed to increase liquidity and improve
Crosstex is implementing a strategy to increase liquidity and
improve profitability by undertaking the following steps:
-- Reduce the distribution and dividend, which is being effected
with the distribution and dividend payable this quarter.
-- Sell certain nonstrategic assets. The Partnership has executed
agreements to sell certain nonstrategic assets and is
completing agreements on others that together will generate
approximately $100 million in proceeds. These transactions are
expected to be completed before year end.
-- Reduce capital expenditures significantly through 2009. Total
growth capital investments in the fourth quarter of 2008 and
calendar year 2009 are currently anticipated to be
approximately $180 million.
-- Reduce balances outstanding under letters of credit.
These actions are designed to create additional liquidity of
$500-600 million by year-end 2009, which is anticipated to allow
Crosstex to exit 2009 with more than $200 million available under its
credit facility, assuming no access to the capital markets.
"Even though we have experienced significant changes during the
last few weeks, we still have strong underlying long-term business
fundamentals, great assets and excellent customer relationships.
Although volumes in our key operating areas of North Texas and
Louisiana are somewhat behind our forecasts, we still see significant
volume increases with many growth opportunities in these locations,"
Crosstex will discuss its revised business strategy and action
plan in more detail on its third-quarter earnings conference call next
Friday, November 7, at 10:00 a.m. Central time (11:00 a.m. Eastern
time). The dial-in number for the call is 1-888-713-4211, and the
passcode is 82267047. Callers outside the United States should dial
1-617-213-4864, and the passcode is 82267047. Investors are advised to
dial in to the call at least 10 minutes prior to the call time to
register. Participants may preregister for the call at
E. (Due to its length, this URL may need to be copied/pasted into your
Internet browser's address field. Remove the extra space if one
Preregistrants will be issued a pin number to use when dialing in
to the live call, which will provide quick access to the conference by
bypassing the operator upon connection. Interested parties also can
access a live Web cast of the call on the Investors page of Crosstex's
Web site at www.crosstexenergy.com.
After the conference call, a replay can be accessed until December
7, 2008, by dialing 1-888-286-8010. International callers should dial
1-617-801-6888 for a replay. The passcode for all callers listening to
the replay is 40501936. Interested parties also can visit the
Investors page of Crosstex's Web site to listen to a replay of the
About the Crosstex Energy Companies
Crosstex Energy, L.P., a midstream natural gas company
headquartered in Dallas, operates approximately 5,700 miles of
pipeline, 12 processing plants, four fractionators, and approximately
190 natural gas amine-treating plants and dew point control plants.
Crosstex currently provides services for over 4.0 Bcf/day of natural
gas, or approximately eight percent of marketed U.S. daily production.
Crosstex Energy, Inc. owns the two percent general partner
interest, a 34 percent limited partner interest, and the incentive
distribution rights of Crosstex Energy, L.P.
Additional information about the Partnership can be found at
This press release contains forward-looking statements within the
meaning of the federal securities laws. These statements are based on
certain assumptions made by the Partnership and the Corporation based
upon management's experience and perception of historical trends,
current conditions, expected future developments and other factors the
Partnership and the Corporation believe are appropriate in the
circumstances. These statements include, but are not limited to,
statements with respect to the impact of Hurricanes Gustav and Ike on
the Partnership's operations, and the Partnership's and the
Corporation's future financial condition, liquidity, and results of
operations. Such statements are subject to a number of assumptions,
risks and uncertainties, many of which are beyond the control of the
Partnership and the Corporation, which may cause the Partnership's and
the Corporation's actual results to differ materially from those
implied or expressed by the forward-looking statements. These risks
include the following: (1) the amount of natural gas transported in
the Partnership's gathering and transmission lines may decline as a
result of competition for supplies, reserve declines and reduction in
demand from key customers and markets; (2) the level of the
Partnership's processing and treating operations may decline for
similar reasons; (3) fluctuations in natural gas and NGL prices may
occur due to weather and other natural and economic forces; (4) there
may be a failure to successfully integrate new acquisitions; (5) the
Partnership's credit risk management efforts may fail to adequately
protect against customer nonpayment; (6) the Partnership may not
adequately address construction and operating risks; and (7) other
factors discussed in the Partnership's and the Corporation's Annual
Reports on Form 10-K for the year ended December 31, 2007, and other
filings with the Securities and Exchange Commission. The Partnership
and the Corporation have no obligation to publicly update or revise
any forward-looking statement, whether as a result of new information,
future events, or otherwise.
CONTACT: Crosstex Energy
Crystal C. Bell, 214-721-9407
Investor Relations Specialist
Jill McMillan, 214-721-9271
Manager, Public & Industry Affairs
SOURCE: Crosstex Energy