DALLAS, Dec. 20 /PRNewswire-FirstCall/ -- Crosstex Energy, L.P.
(Nasdaq: XTEX) (the Partnership) has agreed to acquire 100 percent of the
assets of Graco Operations, one of its key competitors in the treating
business, for $9.25 million. In a separate transaction, it has also entered
into an agreement to acquire 100 percent of the partnership interests that it
does not own in a gathering system in Harrison County, Texas, for
approximately $5 million.
"These acquisitions are a continuation of Crosstex's growth strategy,"
said Barry E. Davis, President and Chief Executive Officer. "The treating
equipment to be acquired will enhance our ability to execute on the organic
growth we envision in 2005 in our treating segment. In addition, the
operating plants to be acquired will expand our reach to new geographic
regions and customers. We are excited to have Lonnie Gray join our team after
the transaction. His expertise and relationships will be a great addition for
The Partnership has agreed to purchase Graco, a business founded by Lonnie
Gray more than 20 years ago. The acquired operations include approximately 25
treating plants and a vast inventory of related equipment. Seven of the
plants are currently in service and generate annual cash flow of approximately
$1 million. The remaining plants in inventory represent one of the largest
fleets of available treating equipment in the industry and will be available
to fulfill a portion of Crosstex's anticipated growth in the treating business
in 2005. In 2004, Crosstex has seen its plants in service increase from 52 to
presently more than 70. This acquisition will increase the Partnership's
combined operating plants and available inventory to more than 100 units,
making Crosstex the largest operator of treating plants in the industry.
Closing of the acquisition, which is pending completion of final due
diligence, is expected to take place in January 2005.
The Partnership also has received the consents of more than a majority of
the non-affiliated limited partners in Crosstex Pipeline Partners, Ltd. (CPP),
allowing it to acquire 100 percent of the interests that it does not own in
CPP. Closing of the acquisition is expected to happen on January 1, 2005.
Crosstex acts as operator of the assets owned by CPP, which consist of
approximately 60 miles of gas gathering assets. Total volumes on the systems
in 2004 have averaged about 17 mmbtu/d. Incremental distributable cash flow
to Crosstex from the acquisition in 2005 is estimated to be approximately
"Consolidating the ownership of the Harrison County system will provide
incremental, accretive cash flow," said Davis. "We also believe ownership
consolidation will help Crosstex realize greater operating efficiencies in the
About the Crosstex Energy Companies
Crosstex Energy, L.P., a mid-stream natural gas company headquartered in
Dallas, operates more than 4,500 miles of pipeline, five processing plants,
and more than 70 natural gas amine treating plants. Crosstex currently
provides services for more than 1.5 BCF/day of natural gas.
Crosstex Energy Inc. owns the general partner, a 54.3 percent limited
partner interest and the incentive distribution rights of Crosstex Energy,
Additional information about the Crosstex companies can be found at
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 companies believe that
the expectations reflected in the forward-looking statements are reasonable,
they can give no assurance that such expectations will prove to be correct.
Contact: Barry E. Davis, President and Chief Executive Officer
William W. Davis, Executive 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, Executive 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.; Graco Operations; Crosstex Pipeline Partners,
Ltd.; Crosstex Energy Inc.
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2791 12/20/2004 16:37 EST http://www.prnewswire.com