DALLAS--(BUSINESS WIRE)--Sept. 20, 2006--Crosstex Energy, L.P.
(NASDAQ: XTEX) (the Partnership) announced today that its management
and the Audit Committee of the Board of Directors of Crosstex Energy
GP, LLC have concluded that the Partnership should restate previously
issued interim (unaudited) financial statements for the quarters ended
March 31, 2006 and June 30, 2006 due to a clerical accounting error
made in the first quarter of 2006. The net effect of the required
adjustment due to the error reduces the Partnership's net income for
the three months ended March 31, 2006 and the six months ended June
30, 2006 by approximately $0.9 million. Partners' equity is reduced by
the same amount, and current liabilities are increased by the same
Management of the Partnership has determined that the Partnership
purchased natural gas from a supplier on newly acquired gas processing
assets in south Louisiana that was not accrued in the first quarter of
2006 due to a clerical error. The error occurred shortly after the
acquisition of the south Louisiana assets from El Paso Corporation in
November 2005 and during a period when the Partnership was upgrading
and transitioning to new accounting systems for the acquired assets.
Since the first quarter of 2006, the Partnership has implemented
accounting system improvements and conducted additional training of
new personnel. Also, the Partnership will implement additional
accounting controls beginning in the third quarter of 2006 to
specifically address the error.
The Partnership's consolidated statements of operations and
consolidated balance sheets as of and for the three months ended March
31, 2006 and as of and for the three and six months ended June 30,
2006 should no longer be relied upon. The Partnership will file
amendments to its Quarterly Reports on Form 10-Q for the quarters
ended March 31, 2006 and June 30, 2006 in the near term.
The impact of the error on Crosstex Energy, Inc.'s financial
statements is not sufficient to warrant restating them.
About the Crosstex Energy Companies
Crosstex Energy, L.P., a midstream natural gas corporation
headquartered in Dallas, operates over 5,000 miles of pipeline, twelve
processing plants, four fractionators, and approximately 160 natural
gas amine treating plants and 25 dew point control plants. Crosstex
currently provides services for over 3.0 Bcf/day of natural gas, or
approximately 6.0 percent of marketed U.S. daily production based on
August 2005 Department of Energy data.
Crosstex Energy, Inc. (NASDAQ: XTXI) (the Corporation) owns the
two percent general partner interest, a 42 percent limited partner
interest, and the incentive distribution rights of Crosstex Energy,
Additional information about the Crosstex companies can be found
This press release contains forward-looking statements based on
currently available information and assumptions and expectations that
the Partnership and the Corporation believe are reasonable. However,
the Partnership's and the Corporation's assumptions and expectations
are subject to a wide range of business risks. Such risks are
discussed in the Partnership's and the Corporation's Form 10-Ks for
the year ended December 31, 2005, Form 10-Qs for the quarter ended
June 30, 2006, and other filings with the Securities and Exchange
Commission. 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.
CONTACT: Crosstex Energy, L.P.
Crystal C. Bell, 214-721-9407
Jill McMillan, 214-721-9271
SOURCE: Crosstex Energy, L.P.