Provides Significant Expansion into Crude and Condensate Services
in Emerging Utica Shale Play
DALLAS--(BUSINESS WIRE)--May. 8, 2012--
The Crosstex Energy companies, Crosstex Energy, L.P. (NASDAQ:XTEX) (the
Partnership) and Crosstex Energy, Inc. (NASDAQ:XTXI) (the Corporation)
today announced the Partnership has signed a definitive agreement to
acquire privately held Clearfield Energy, Inc. for approximately $210
million in cash at closing subject to certain adjustments. Clearfield is
a 125-year-old crude oil, condensate and water services company with
operations in Ohio, Kentucky and West Virginia. Clearfield currently
moves approximately 30 percent of the oil production in Ohio and
provides a solid entry into the Utica Shale play where major producers
have acquired significant acreage positions. This acquisition is
expected to be immediately accretive to distributable cash flow.
Clearfield’s assets include a 4,500-barrel-per-hour crude oil barge
loading terminal on the Ohio River, a 28,000-barrel-per day crude oil
rail loading terminal on the Ohio Central Railroad network which is
expected to expand to a 56,000-barrel-per-day facility by end-of-year,
and 200 miles of crude oil pipelines in Ohio and West Virginia. The
assets also include 100,000 barrels of above ground storage, six
existing brine water disposal wells with two under development and an
extensive fleet of trucks with a total capacity of 35,000 barrels per
day. In addition, Clearfield owns more than 2,500 miles of unused right
The transaction further diversifies the Partnership’s asset base
in terms of geography and service offerings, representing an important
strategic step for the Partnership into crude and condensate services.
As Utica Shale production expands, the Partnership plans to leverage
Clearfield’s first-mover position in crude and condensate services in
the region, which will drive further growth. The Partnership believes
its core capabilities and strong financial position will enable it to
leverage Clearfield’s strategically positioned assets and operational
platform to accelerate growth. This platform will better enable the
Partnership to compete for natural gas gathering and processing
opportunities in the emerging Utica Shale play.
“We are extremely pleased to reach an agreement to acquire one of the
largest midstream service businesses in Ohio, West Virginia and
Kentucky,” said Barry E. Davis, Crosstex President and Chief Executive
Officer. “It is a big step in the execution of our strategy to grow and
diversify our business, providing a new geographic footprint and
expanded service offerings for us. Clearfield provides Crosstex with an
entrance in the rapidly developing Utica Shale play, which we believe
will be a strong, sustainable growth platform for us. We believe we can
build upon Clearfield’s many years of great customer service and are
confident in the ability to grow the business as a first mover in this
rapidly developing region.
“Looking ahead, we will continue to focus on maximizing the earnings and
growth of our current assets as we enhance scale and diversification to
create value for our investors and our customers,” Davis added.
Financing and Approvals
The Partnership plans to fund this transaction through a combination of
debt and equity. The transaction, which is expected to be completed in
July 2012, is subject to the satisfaction of customary closing
conditions, including applicable regulatory approvals, if any.
Conference Call and Webcast
The Partnership and the Corporation will hold a conference call and
webcast to discuss the transaction and its first quarter 2012 financial
results on Tuesday, May 8, 2012, at 1:00 p.m. Central time (2:00 p.m.
Eastern time). The dial-in number for the call is 1-888-680-0865.
Callers outside the United States should dial 1-617-213-4853. The
passcode is 47284871 for all callers. 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 https://www.theconferencingservice.com/prereg/key.process?key=PCVGH9RPL.
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. The webcast and accompanying
slides can be viewed on the Investors page of Crosstex's website at www.crosstexenergy.com.
After the conference call, a replay can be accessed until August 10,
2012, 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 68502449. Interested parties also can visit the Investors
page of Crosstex's website to listen to a replay of the call.
About the Crosstex Energy Companies
Crosstex Energy, L.P., a midstream natural gas company headquartered in
Dallas, Texas, operates approximately 3,300 miles of pipeline, ten
processing plants and four fractionators. Crosstex Energy, L.P.
currently provides services for 3.2 billion cubic feet of natural gas
per day, or approximately six percent of marketed U.S. daily production.
Crosstex Energy, Inc. owns the two percent general partner interest, a
25 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.
About Clearfield Energy, Inc.
Clearfield Energy is a privately held crude oil and condensate services
and brine gathering and disposal business with operations in Ohio,
Kentucky and West Virginia.
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 regarding the Partnership and Clearfield Energy Inc. and the
expected impact of the transaction, including the expected financial
results for the Partnership. 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. We therefore caution you against relying on any of
these forward-looking statements. 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.
Source: Crosstex Energy, L.P.
Crosstex Energy, L.P.
Jill McMillan, Director,
Public & Industry Affairs