DALLAS--(BUSINESS WIRE)--Feb. 17, 2004--Crosstex Energy, L.P.
(NasdaqNM:XTEX), a Texas-based midstream natural gas company, today
announced that it has executed a definitive agreement for the
acquisition of the LIG Pipeline Company and its subsidiaries (LIG
Inc., Louisiana Intrastate Gas Company, L.L.C., LIG Chemical Company,
LIG Liquids Company, L.L.C. and Tuscaloosa Pipeline Company) from
American Electric Power (NYSE:AEP) for $76.2 million. The acquisition
will increase Crosstex's assets to approximately 4,500 miles of
pipeline, 1.2 billion cubic feet per day of transported volumes and
over 700 million cubic feet per day of processing capacity. Closing,
which is subject to completion of certain conditions, is expected to
occur within 90 days.
"The LIG system is a very strategic acquisition for Crosstex
because it bridges the gap between our Texas and Mississippi systems
and significantly broadens our exposure in the onshore Gulf Coast
area," said Barry E. Davis, president and chief executive officer of
Crosstex. "The LIG transaction again sets a record as our largest
transaction to date and provides us with a new platform for growth in
a key producing and consuming region. As we've accomplished on our
Texas Gulf Coast assets, we will focus on improving the systems by
expanding our market share and increasing access to directly-connected
wellhead gas production."
"The assets, which are very similar to our assets in the Texas
Gulf Coast, almost double both the miles of pipe we own and the volume
of gas moved by our systems," continued Mr. Davis. "We forecast an
increase in distributable cash flow in the first year of our ownership
of $0.40 per unit, assuming the transaction is 100% debt financed. If
90% of the anticipated accretion to the Partnership units is
distributed, it will result in incremental pre-tax cash flow to the
general partner of $5.0 million annually. We will seriously consider
increases in the distribution in the first full quarter following the
closing of the transaction."
LIG, which is one of the largest intrastate pipelines in the state
of Louisiana, consists of approximately 2000 miles of gas gathering
and transmission systems located in 29 parishes extending from
northwest and north-central Louisiana through the center of the state
to south and southeast Louisiana. Current on-system market of
approximately 580,000 mmbtu/d includes power plants, municipal gas
systems, and industrial markets located principally in the industrial
corridor between New Orleans and Baton Rouge. Five processing plants
owned by LIG give the system the capability to handle rich and lean
gas supplies connected to the system. Connections to several
interconnected pipelines and the Jefferson Island Storage facility
provide access to additional system supply, providing significant
system management flexibility.
The acquisition can be financed through the company's existing
credit facilities, although certain modifications to them are
anticipated. After the acquisition, the company's capital structure,
on a pro forma basis, will be approximately 47% percent debt and 53%
Crosstex will host a conference call on Wednesday, Feb. 18, at
10:30 a.m. CDT to discuss this acquisition. 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. The call will
also be available for replay for 30 days by dialing 888-286-8010,
passcode 48791756, or by going to the investor relations events page
of 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 2,500 miles of pipeline, three
processing plants, and over 50 natural gas amine treating plants.
Crosstex currently provides services for more than one BCF/day of
Crosstex Energy Inc. (NasdaqNM:XTXI) owns the general partner, a
54.3% limited partner interest and the incentive distribution rights
of Crosstex Energy, L.P. 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: Crosstex Energy, L.P.
Barry E. Davis or William W. Davis, 214-953-9500
SOURCE: Crosstex Energy, L.P.