DALLAS, Feb 24, 2005 /PRNewswire-FirstCall via COMTEX/ -- Crosstex Energy, L.P.
(Nasdaq: XTEX) (the Partnership) today announced that it has completed its
project feasibility study and has entered into definitive agreements to
proceed with construction of the North Texas Pipeline project. The project,
to bring gas out of the Barnett Shale and into markets in the Midwest and
East, was previously announced in December 2004.
"We are very excited to have the opportunity to build the needed
additional pipeline capacity and provide market outlets for the rapidly
growing Barnett Shale production," said Barry E. Davis, President and Chief
Executive Officer of Crosstex. "Chief Oil & Gas and other producers have done
a great job in developing the largest gas field in Texas. The project is
consistent with our strategy of focusing on producer relationships and
providing the services required to get their gas to market. It also
demonstrates our focus on grass roots construction projects in addition to
acquisitions and opens a new core area in which we can grow our asset base and
Based on commitments from Chief Oil & Gas LLC and other producers,
Crosstex will begin the construction of a 122-mile, 24-inch diameter pipeline
from a point just north of Fort Worth, Texas (Alliance Airport area) to
interconnect with Natural Gas Pipeline of America, Houston Pipeline Company,
and Kinder Morgan Texas in Lamar County, Texas. The pipeline will have
initial capacity of 250 million cubic feet of natural gas per day (MMcf/d.)
Crosstex also has commitments from producers to construct an additional
11 miles of gathering pipeline to interconnect supply from the Tarrant County
area into the North Texas Pipeline. The construction cost is estimated at
$98 million and is expected to be completed by January 2006. Expected first
year cash flow to the Partnership from the project is estimated to be
$17.4 million. Crosstex has begun the acquisition of rights-of-way and will
initiate actual construction of the pipeline by late summer of this year.
"Crosstex's North Texas Pipeline brings access to new market outlets from
the Barnett Shale play, allowing Chief and other producers to focus on
executing our exploration and development strategy," said Trevor Rees-Jones,
Chairman and Chief Executive Officer of Chief Oil & Gas.
Crosstex is in discussion with companies that represent significant
additional production that is available to be committed to the pipeline. With
such additional volumes, compression could be added to expand the capacity up
to a maximum of 375 MMcf/d.
"We are also pleased to announce the hiring of Danny Thompson, who brings
all the right experience to manage project construction," said Barry Davis.
"Danny has spent over 32 years in the midstream natural gas business, most
recently as Vice President of Operations and Engineering for Cantera Natural
Gas LLC. His experience varies from hands-on engineering, design, operation,
and construction of gas processing plants and pipelines, to business
development and gas marketing, as well as managing large operating facilities
and construction projects."
The Partnership expects to fund initial construction expenditures for the
project from its revolving bank facility. As the project progresses, these
borrowings will be refinanced with a combination of equity and fixed-rate term
debt. Assuming long-term financing structured 50-percent debt and 50-percent
equity, Crosstex estimates the first year accretion to the Partnership of 13%
and to the Corporation of 30%.
About the Crosstex Energy Companies
Crosstex Energy, L.P., a mid-stream natural gas company headquartered in
Dallas, operates over 4,500 miles of pipeline, five processing plants, and
over 60 natural gas amine treating plants. Crosstex currently provides
services for over 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
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.
Barry E. Davis, President and Chief Executive Officer, or William W. Davis, Executiv
V.P. and Chief Financial Officer, both of Crosstex Energy, L.P., +1-214-953-9500