UBS MLP 1v1 Conference September 1 & 2, 2010

Transcription

1 UBS MLP 1v1 Conference September 1 & 2,

2 Forward Looking Statements This presentation contains forward looking statements within the meaning of the federal securities laws. Forward looking statements are not guarantees of performance. They involve risks, uncertainties and assumptions. The future results of Crosstex Energy, L.P. and its affiliates (collectively known as Crosstex ) may differ materially from those expressed in the forward-looking statements contained throughout this presentation and in documents filed with the SEC. Many of the factors that will determine these results are beyond Crosstex s ability to control or predict. These statements are necessarily based upon various assumptions involving judgments with respect to the future, including, among others, the ability to achieve synergies and revenue growth; national, international, regional and local economic, competitive and regulatory conditions and developments; technological developments; capital markets conditions; inflation rates; interest rates; the political and economic stability of oil producing nations; energy markets; weather conditions; business and regulatory or legal decisions; the pace of deregulation of retail natural gas and electricity; the timing and success of business development efforts; and other uncertainties. You are cautioned not to put undue reliance on any forward looking statement. Crosstex has no obligation to publicly update or revise any forward looking statement, whether as a result of new information, future events or otherwise. 2

3 Strategically Positioned for Performance and Growth Well positioned assets Lean organization Financially strong Poised to take advantage of the macro environment Focused on long-term growth Reinstatement of dividends and distributions 3

4 We Span the Value Chain Focused Midstream Company Midstream energy services company focused on full value chain Assets strategically located in key producing areas and market regions Focus on Barnett and Haynesville shale plays Diversity of Services Over 3,300 miles of natural gas gathering and transmission pipeline 9 natural gas processing plants 2 fractionators Over 400 miles of NGL pipeline 2.4 MM barrels of NGL storage capacity Transmission Lines Natural Gas Consumers Gathering, Dehydration & Compression NGL Transportation & Fractionation NGL Markets Wellhead Processing, Conditioning & Treating 4

5 Crosstex Corporate Structure GSO Crosstex Holdings Public Unitholders 51% 25% 22% Public/Other Shareholders 87% Crosstex Energy, Inc. (NASDAQ: XTXI) 100% Crosstex Energy GP, L.P. 2% Crosstex Energy, L.P. (NASDAQ: XTEX) Directors / Executive Officers 13% 2% GP Interest 100% IDRs Crosstex Energy Services, L.P. All Assets and Operations 5

6 Strategically Positioned Assets North Texas ~780 miles of pipeline 3 processing plants LIG ~2,100 miles of pipeline 2 processing plants Processing & NGLs ~440 miles of NGL pipeline 4 processing plants 2 fractionation facilities 2009 Op Income ($MM) $23 $80 $113 NTX LIG PNGL 6

7 Strategically Positioned for Long-Term Growth Macro environment will provide opportunities Capitalize on strategic positions around core assets Focus on high-return projects Continue to reduce risk in the business Disciplined financial guidelines will guide growth Reinstatement of distributions and dividends 7

8 North Texas 8

9 NTX: Strategically Positioned in the Barnett Shale Well Positioned Assets (current capacity) : North Texas Gathering Systems North Texas Pipeline Processing Plant NTPL 375 MMcfd NTX Gathering Assets 1 Bcfd + Azle plant 50 MMcfd Goforth plant 30 MMcfd Silvercreek plant 200 MMcfd 9

10 NTX: Operating Income NTX G&T Op Income NTX Processing Op Income $140,000,000 $120,000,000 $100,000,000 $80,000,000 $60,000,000 $40,000,000 $20,000,000 $ Note: 2010 represents mid-point of guidance 10

11 Diverse Customer Base 11

12 Barnett Shale Volume Projection 12,000 Barnett Volume Projection (PIRA 2/10 Fcst) 10,000 8,000 MMCFD 6,000 4,000 2,000 - J-90 J-91 J-93 J-94 J-96 J-97 J-99 J-00 J-02 J-03 J-05 J-06 J-08 J-09 J-11 J-12 J-14 J-15 J-17 J-18 High Base Low Source: Netherland, Sewell & Associates, Inc. 12

13 NTX: New Long Term Gathering Agreements North Texas Expansion Project 1: New 10 yr. transport agreement on N.TX Volume commitment of at least 50 MMBtu/d Expected capital of less than $10 million cash Expected annual run-rate cash flow of approximately $8 million System expected in operations first quarter 2011 North Texas Expansion Project 2: $25 million, 15-mile expansion project supported by volumetric commitments Seven-mile low-pressure pipeline, eight-mile high-pressure pipeline and compressor station in southwest Tarrant County Peak flow rate in 2012 expected to be more than 100 MMBtu/d System expected in operation first quarter

14 LIG 14

15 LIG: Strategically Located Assets Well Positioned Assets (current capacity) : LIG ~ 1Bcfd Gibson Plant 145 MMcfd Plaquemine Plant 225 MMcfd LIG System NGL System Processing Plant 15

16 LIG: Operating Income LIG Mktg. & Transport Op Income LIG Processing Op Income $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $ Note: 2010 represents mid-point of guidance 16

17 Diverse Customer Base 17

18 Haynesville Provides Abundant Near- Term Opportunities Haynesville Projects Capacity MMcf/d Contract In Service Total Contracted Term N. LIG Contracted Projects Red River Project Q yr North LIG Expansion Phase I Q yr North LIG Expansion Phase II Q yr Black Lake Interconnect Phase III Part I Q yr Red River Amine Unit (120 MMcf/d Capacity) Q yr Black Lake Interconnect Phase III Part II Q yr LIG Phase IV Expansion- Part I Q yr Total Contracted Current Expansion Project Partial System Loop; Phase IV Expansion Part II Q est 115 Working All Projects

19 LIG: Strategically Positioned for Long-Term Growth Franchise position Exceptional connectivity to interstate markets Access to river market on S. LIG All N. LIG volumes are firm transport Highly attractive inventory of growth projects 19

20 Processing and NGL s 20

21 PNGL: Strategically Located Assets LIG System NGL System Processing Plant Intracoastal 21

22 PNGL: Operating Income $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $ Note: 2010 represents mid-point of guidance 22

23 Diverse Customer Base 23

24 PNGL: Strategically Positioned for Long-Term Growth Favorable processing environment Potential consolidation opportunities Fractionation capacity constraints Frac capacity available to take advantage of NGL production Continue initiative to bring NGL s to our plants for fractionation via truck & rail Increased rich gas production creates opportunities 24

25 Financial Overview 25

26 Summary Operating Income Operating Income ($ MM) (3) North Texas $103 $113 $111 LIG $82 $80 $74 PNGL (1) $12 $23 $35 Shared Operating Exp. & Other ($14) ($14) ($13) Total Continuing Operations $183 $202 $207(4) Discontinued Operations(2) $91 $50 $0 Total $274 $252 $207 (1) Includes impact of Eunice lease buy-out in 2009 and Intracoastal acquisition-- $2 MM impact in 2009 and $13 MM impact in 2010 (2) Includes contributions from sold assets (STX, Miss, Ala, Treating, Seminole interest, Arkoma, and ETX) (3) 2010 represents mid-point of guidance (4) 2010 continuing operations includes ~$8MM in LC Fee s that are re-classed as interest expense 26

27 Gross Margin By Contract Type Ex Discontinued Ops Non-commodity based margins have increased from ~68% in 2008 to ~87% in G& T Fee POL Proc Margin 2009 G& T Fee POL Proc Margin 2010 G& T Fee POL Proc Margin 15% 9% 11% 2% 13% 17% 16% 58% 12% 10% 66% 71% 27

28 Growth & Maintenance Capital Crosstex has significantly scaled back growth capital spending Focused on execution of projects within the operating footprint Scalable nature of current asset base generates high-return projects Low maintenance requirements on existing assets Historical and Projected Growth Capital Expenditures ($ in millions) $500 $400 $404 Historical and Projected Maintenance Capital Expenditures ($ in millions) $20 $16 $18 $12(2) $300 $259 $12 $11 $11 $200 $136 $8 $100 $- $35(1) (1) Represents current growth capital forecasted as Q (2) Represents revised high-end of guidance from Q earnings call $4 $

29 Guidance for 2010 Total Year 2010 Low High Net income $ (41) $ (10) Depreciation and amortization Stock-based compensation 6 6 LOC Fees & Interest Taxes and other 2 2 Adjusted EBITDA $ 160 $ 190 Taxes and other $ (3) $ (3) LOC Fees & Interest $ (80) $ (79) Maintenance capital expenditures $ (12) $ (10) Distributable cash flow $ 62 $ 96 Growth Capital $ 35 $ 35 Key Assumptions for Forecast Weighted Average Liquids Price ($/gallon) $ 0.80 $ 1.09 Crude ($/Bbl) $ $ Natural Gas ($/MMBtu) $ 6.00 $ 5.00 Natural Gas Liquids to Gas Ratio 149.9% 245.0% XTEX Distribution per Unit $ 0.30 XTXI Dividends per Share $

30 Conservative Financial Guidelines Maintain a conservative capital structure and leverage ratios Maintain adequate liquidity Fund organic growth and strategic opportunities with internal cash flows and a balanced mix of debt and equity Maintain a balanced contract mix and an active commodity price hedging program 30

31 Strategically Positioned Financially Strong balance sheet Disciplined financial guidelines Continue to de-leverage, de-risk Business Use highly predictable cash flows to set distributions Allocate capital to high-return projects Restoration of dividends and distributions in Q

32 Appendix 32

33 Reconciliation to Net Income Net Income to DCF Reconciliation: Years Ended ($ in millions) December (Unaudited) Net income (loss) attributable to Crosstex Energy, L.P. $ 104 $ 11 Depreciation, amortization and impairments (1) Stock-based compensation 9 11 Interest expense, net (2) Loss on extinguishment of debt 5 - Gain on sale of property (184) (51) Taxes and other 8 6 Adjusted EBITDA Interest (2)(3)(4) (121) (83) Cash taxes and other (5) (3) (3) Maintenance capital expenditures (11) (18) Distributable cash flow $ 68 $ 141 (1) Excludes minority interest share of depreciation and amortization of $290 and $286K for the year ended 2009 and the year ended 2008 respectively. Includes depreciation, amortization and impairments related to discontinued operations of $10.7 and $26.4 million for the year ended 2009 and the year ended 2008 respectively. (2) Includes interest expense allocated to discontinued operations of $34.9 and $30.0 million for the year ended 2009 and the year ended 2008, respectively. (3) Excludes $4.3 million of debt issuance cost amortization, and $5.2 million of senior secured note make-whole and call premium paid-in-kind interest resulting from repayment of such notes from the proceeds of asset sales, for the year ended (4) Excludes noncash interest rate swap mark to market of ($797K) for the year ended 2009, and $22.1 million for the year ended (5) Includes Seminole Adjustment of $39 million for the year ended