DALLAS, Aug. 8 /PRNewswire-FirstCall/ -- Crosstex Energy, L.P.
(Nasdaq: XTEX) (the Partnership) announced today that it had executed a
definitive agreement with the El Paso Corporation (NYSE: EP) to acquire El
Paso's processing and liquids business in South Louisiana for $500 million.
The agreement has been approved by both companies' boards of directors, and is
subject only to customary regulatory approvals and completion of certain pre-
closing conditions by both parties. Closing is expected in the fourth quarter
of this year.
The assets to be acquired include 2.0 billion cubic feet per day (Bcf/d)
of processing capacity, 66,000 barrels per day of fractionation capacity,
2.4 million barrels of underground storage, and 140 miles of liquids transport
lines. The assets provide Crosstex with the opportunity to participate in the
growing development of deepwater Gulf of Mexico reserves. The assets include:
* The Eunice processing plant and fractionator, which is currently
processing in excess of 850 million cubic feet per day (MMcf/d), and
has a capacity of 1200 MMcf/d. The Eunice fractionation facilities
have a capacity of 36,000 barrels per day of liquid products;
* The Pelican processing plant, which is currently operating at its
designed capacity of 300 MMcf/d. The plant is completing an expansion
to a capacity of 600 MMcf/d, which is scheduled to be in service in
* The Sabine Pass processing plant, which has a capacity of 300 MMcf/d
and has recently been processing approximately 290 MMcf/d;
* A 23.85 percent interest in the Blue Water Gas Processing plant, which
represents net capacity to the acquired interest of 186 MMcf/d, of
which approximately 40 MMcf/d is currently being used; and
* The Riverside fractionator and loading facility, which has a
fractionation capacity of 30,000 barrels per day of liquids products
and fractionates liquids that it receives from the Pelican and Blue
Water plants. Connected to Riverside is a 2.4 million barrel natural
gas liquid storage facility at Napoleonville.
"This is obviously an exciting transaction for our company, as it is
several times the size of our largest previous acquisition," said Barry E.
Davis, President and Chief Executive Officer of Crosstex Energy. "We feel
these are quality assets which have been well-managed by an extremely
professional employee group. We look forward to welcoming these employees
into the Crosstex family, and expect to partner with them to enhance the
synergies we already see between these assets and our existing presence in
"We see tremendous growth of these assets in the future, driven by
continued exploration and development of the deepwater Gulf of Mexico," Mr.
Davis continued. "This drilling is developing oil reserves with large amounts
of associated gas, which is richer in liquids content than these plants have
historically been processing. We also expect to see these assets benefit from
future imports of LNG in the Gulf Coast. Additionally, as we integrate these
assets with our existing footprint in South Louisiana, we envision the ability
to create new opportunities for organic and acquisition growth."
Crosstex expects to finance the acquisition with approximately 50 percent
debt and 50 percent equity, and it should be immediately accretive to the
The facilities typically operate under contracts with producers which
provide for processing on a fee basis, or for a percentage of the liquids
produced. Crosstex plans to enter into hedge transactions to protect its
commodity exposure from the percentage of liquids contracts at liquids prices
that approximate current levels.
Lehman Brothers and Banc of America LLC advised Crosstex on this
acquisition. Banc of America Securities LLC has committed to provide a new
senior secured facility. The proceeds will be used to refinance existing
debt, acquire the El Paso South Louisiana properties and provide liquidity for
the Company's growth initiatives.
Crosstex Energy will hold a conference call to discuss this acquisition
Tuesday, August 9, at 2:00 p.m. Central Time (3:00 p.m. Eastern Time). The
dial-in number for the call is 866-831-6291, passcode Crosstex. A live
Webcast of the call can be accessed on the investor information page of
Crosstex Energy's Website at http://www.crosstexenergy.com . The call will be
available for replay for 30 days by dialing 888-286-8010, passcode 57544287.
A replay of the broadcast will also be available on the Partnership's Website.
Crosstex Energy, L.P., a mid-stream natural gas company headquartered in
Dallas, operates over 4,500 miles of pipeline, five processing plants, and
approximately 100 natural gas amine treating plants. Crosstex currently
provides services for approximately 1.9 Bcf/day of natural gas.
Crosstex Energy, Inc. (Nasdaq: XTXI) owns the general partner, a
51 percent limited partner interest in and the incentive distribution rights
of Crosstex Energy, L.P.
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
27E of the Securities Exchange Act of 1934, as amended. All statements other
than historical facts included herein, including statements regarding the
anticipated growth of the acquired assets and the expected accretion from the
acquisition, constitute forward-looking statements. Although the Partnership
believes that the expectations reflected in the forward-looking statements are
reasonable, it 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.
/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 /
(XTEX EP XTXI)
CO: Crosstex Energy, L.P.; Crosstex Energy, Inc.; El Paso Corporation; Lehman
Brothers; Banc of America LLC
ST: Texas, Louisiana
SU: RLE CCA
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8259 08/08/2005 16:40 EDT http://www.prnewswire.com