DALLAS--(BUSINESS WIRE)--Aug. 31, 2012--
The Crosstex Energy companies, Crosstex Energy, L.P. (NASDAQ: XTEX) (the
Partnership) and Crosstex Energy, Inc. (NASDAQ: XTXI) (the Corporation),
are providing this update on the impact and expected impacts of the
slurry near Bayou Corne, Assumption Parish, Louisiana, on the
Partnership’s facilities and operations.
In early August, a slurry-filled sinkhole developed in Assumption Parish
near Bayou Corne, Louisiana. The cause of the slurry is currently under
investigation by Louisiana state and local officials. Consequently, the
Partnership took a section of its 36-inch-diameter natural gas pipeline
located near the sinkhole out of service. Service to certain markets,
primarily in the Mississippi River area, has been curtailed or
interrupted, and the Partnership has worked with its customers to secure
alternative natural gas supplies so that disruptions are minimized. The
Partnership expects that the ongoing overall business impact on the
services provided by the pipeline, which include gathering, processing,
transportation and end-user sales, will be approximately $250,000-
$300,000 per month while the pipeline section is out of service.
The Partnership will relocate the portion of the pipeline affected and
certain services will not resume until the relocation has been
completed. The Partnership is evaluating potential rerouting
alternatives, timing and expected costs. Based on the current
alternatives being considered, the Partnership estimates the cost of the
relocation to be $20-25 million and expects to complete the relocation
by summer 2013. The Partnership is assessing the potential for
recovering its losses from responsible parties and insurance coverage.
The Partnership plans to write-off its investment in the section of the
impacted existing pipeline and capitalize the costs of the replacement
pipeline. The write-off is a non-cash impairment charge and estimated to
be less than $0.5 million.
The Partnership also owns and operates the Napoleonville storage
facility, which is located off Highway 70 in the Bayou Corne area. The
facility consists of two salt dome natural gas liquids storage caverns.
The Partnership is currently storing approximately 900,000 barrels of
normal butane in the facilities for third parties. The Partnership’s
management does not believe that the storage facilities have been
affected by the slurry. The Louisiana Department of Environmental
Quality recently supported this assessment in a press release issued
August 16, 2012, entitled “Crosstex Butane Cavern Shows
Little-to-no Threat to Slurry Hole Area,” which can be found at http://www.deq.louisiana.gov/portal/portals/0/news/pdf/crosstex.pdf.
Crosstex is continuously monitoring its Napoleonville operations and
taking additional precautionary measures as determined necessary.
“Our highest priority is to ensure the safety of the surrounding
community, our employees, contractors and the environment,” said Barry
E. Davis, Crosstex President and Chief Executive Officer. “We took
immediate actions to ensure the safety of all involved and the integrity
of our facilities and operations near the sinkhole, and continue to work
closely with state agencies and local officials.”
About the Crosstex Energy Companies
Crosstex Energy, L.P., a midstream natural gas company headquartered in
Dallas, operates approximately 3,500 miles of natural gas, natural gas
liquids, and oil pipelines, 10 processing plants and four fractionators.
The Partnership also operates barge terminals, rail terminals, product
storage facilities, brine water disposal wells and an extensive truck
Crosstex Energy, Inc. owns the two percent general partner interest, a
22 percent limited partner interest and the incentive distribution
rights of Crosstex Energy, L.P.
Additional information about the Crosstex companies can be found at www.crosstexenergy.com.
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 forecasts regarding impacts to operations,
results of operations, recovery of damages, cash flow, cost, impact, and
timing for restoration of services, all as discussed above, as well as
the Partnership’s future growth 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, but
are not limited to, risks discussed in the Partnership's and the
Corporation's 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.
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Source: Crosstex Energy
Crosstex Energy, L.P.
Jill McMillan, 214-721-9271
Public & Industry Affairs