Wells Fargo 8th Annual Pipeline and MLP Symposium December 8 th, 2009 Bill Davis, Chief Financial Officer 1
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 and values 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 2
Business Overview 3
Crosstex Overview Focused Midstream Company Midstream energy services company focused on gathering, treating, transporting, processing and marketing natural gas and natural gas liquids Assets strategically located in key producing areas and market regions Focus in Barnett and Haynesville Shale plays Strong Asset Base Over 3,000 miles of gathering and transmission pipeline 10 natural gas processing plants 3 fractionators Over 400 miles of NGL pipeline 2.5mm barrels of NGL storage capacity Transmission Lines Natural Gas Consumers Gathering, Dehydration & Compression NGL Transportation & Fractionation NGL Markets Wellhead Processing,Conditioning & Treating 4 4
Crosstex Ownership Structure Public Unitholders Public Shareholders Directors / Executive Officers 87% 13% 65% Crosstex Energy, Inc. (NASDAQ: XTXI) 100% 33% Crosstex Energy GP, L.P. 2% Crosstex Energy, L.P. (NASDAQ: XTEX) 2% GP Interest 100% IDRs All Assets and Operations 5 5
Executing Our Plan The Plan Accomplishments 1. Restructure Debt Two years of covenant relief from lenders February 2009 2. Sell Non core Assets Reduce Debt Sold Seminole Plant interest & Arkoma system $96mm Sold Mississippi and South Texas assets $220mm Sold Treating assets $266mm Total sales $582mm 3. Invest in High Return Projects 2009 capex focused on $100mm of high return, low risk projects 4. Maximize Operating Efficiencies Additional $9mm of savings above inital 2009 projection 5. Continue To Improve Results Increased adjusted cash flow guidance by ~ $25MM for 2009 6. Refinance Debt In Progress Positioned to complete in 2010 7. Restore Distributions/Dividends In Progress After new financing plan in place 6 6
Getting Results Q1 2009A Q2 2009A Q3 2009A Q4 2009E Covenant Debt/EBITDA 7.25x 8.25x 8.25x 8.5x Debt/EBITDA (1) 5.8x 6.0x 5.6x 5.6x 1) Q4 2009E Debt/EBITDA represents XTEX s actual Debt after the Treating sale divided by the mid point of 2009 guidance 2) 2009 estimated EBITDA represents the mid point of guidance 7 7
Strategically Located Assets 8 8
Business Focus Shale Opportunities Gross EUR (bcfe) Well Costs (MM) Typical Royalty F&D Cost (per mcfe) Haynesville 6.50 $7.5 25% $1.54 Barnett 2.65 $2.6 25% $1.31 Marcellus 4.20 $4.5 15% $1.34 Fayetteville 2.40 $3.0 17% $1.51 Currently the Haynesville drilling remains strong acreage commitments help drive drilling We believe the Barnett drilling will rebound quickly as financial markets and gas markets improve We will focus on expansion opportunities in our core operating areas as well as other emerging shale plays ** Data from Chesapeake Investor Presentation Oct. 2009 9 9
Asset Overview Louisiana 10
Louisiana Overview Largest intrastate pipeline system in Louisiana Ability to use LIG to bring rich gas to suite of processing plants Continue to capture increased Haynesville volumes Serving interstate pipeline & industrial river markets LIG System NGL System Processing Plant 11 11
Louisiana Highlights Key Assets Pipelines LIG System (including Red River) 2,450 miles of gathering and transmission pipelines Average throughput: 900,000 MMbtu/d nine months ended September 2009 Cajun Sibon NGL System approximately 400 miles with capacity of approximately 28,000 Bbls/d Processing, Fractionation, and Storage Facilities Capacity Facility Processing Fractionation Storage (MMcf/d) (Bbls/d) (Bbls) Blue Water 400 Eunice 1,200 36,000 Gibson 140 Pelican 600 Plaquemine 220 10,500 Sabine Pass 300 Riverside 30,000 102,000 Napoleonville Storage 2,400,000 12 12
Haynesville Provides Abundant Near Term Opportunities Haynesville Projects Capacity MMcf/d Contract In Service Total Contracted Term Projects Completed Red River Project Q3 2007 240 240 7 yr North LIG Expansion Phase I Q4 2008 35 35 10 yr North LIG Expansion Phase II Q2 2009 100 100 10 yr Black Lake Interconnect Phase III Q4 2009 35 35 3 yr Projects In Progress Partial System Loop; Phase IV Expansion Q2 2010 145 Under negotiation All Projects 555 410 13 13
LIG: Haynesville Projects Original Red River Project Black Lake Interconnect Phase III North LIG Expansion Phase I/II Partial System Loop Phase IV 14
Gulf Coast Processing & NGL: Strategically Located & Diverse Asset Base Integrated midstream asset group located in gulf coast of Louisiana 6 Cryogenic plants 2 Fractionation Facilities Gathering and distribution lines with access to petro chem and refinery markets LIG System NGL System Processing Plant 15 15
NGL Business Overview Integrated Midstream Asset Group located in the Gulf Coast of South Louisiana 6 Cryogenic Gas Processing Plants 3 NGL fractionation facilities; integrated gathering and distribution lines with access to petchem and refinery markets 3 1.2 MM barrel storage caverns integrated with company s gathering and fractionation and third party distribution 2 barge docks (Mississippi and Mermentau) Experienced full service NGL marketing and Distribution Team 16 16
North Texas 17
NTX: Strategically Positioned for Barnett Shale North Texas Pipeline & Gathering Systems Gulf Crossing / NGPL Processing Plant New, well positioned assets Denton Gathering 2004 North Texas Pipeline 2005 Chief Acquisition 2006 Azle /Goforth Plants 2006 Silvercreek Plant 2007 Gathering build out continues Experience gained for future shale play activity 18
NTX: System Overview Favorable Contract Mix Average terms for remaining gathering and transmission contracts are ~9 years and ~6 years, respectively Key Assets 722 miles of gathering pipelines (including NGL pipelines) Average gathering volume for the nine months ended September 30, 2009 = 814,000 MMBtu/d North Texas Pipeline 133 mile transmission system with 375 MMcf/d of takeaway capacity Average transmission volume for the nine months ended September 30, 2009 = 313,000 MMBtu/d Average processed volume for the nine months ended September 30, 2009 = 224,000 MMBtu/d Facility Azle Goforth Silver Creek Processing Capacity (MMcf/d) 50 35 200 19 19
Current Operating Focus- Barnett Shale Capitalize on Strategic Position Barnett expected to be among first areas to see drilling activity increase as price environment improves Maintain volume levels on Crosstex systems Pursue opportunities to optimize efficiencies with other midstream companies and producers 20 20
Financial Overview 21
Historical Performance Twelve Months Ended Nine Months Ended Volume and Prices December 31, 2008 September 30, 2009 Gathering and Transmission Volume (MMBtu/d) 2,608,000 2,069,000 Processing Volume (MMBtu/d) 1,812,000 1,183,000 Realized Weighted Average NGL Price ($/gallon) $1.36 $0.74 Average Henry Hub Gas Price ($/MMBtu) $8.89 $3.39 Financial Metrics Twelve Months Ended Nine Months Ended (000ʹs) December 31, 2008 September 30, 2009 Adjusted Cash Flow (1) $245,126 $161,471 Distributable Cash Flow $141,608 (2) $56,903 Debt $1,291,602 $863,678 (3) LTM Debt/Adjusted Cash Flow 4.3 x 5.1 x (3) Covenants 5.00 x 8.25 x (1) Adjusted Cash Flow and Distributable Cash Flow are non GAAP financial measures. (2) Year to Date reported DCF of $180 mm adjusted for gain on Seminole sale (3) Includes Pro Forma adjustment for sale of Treating assets on Oct. 1 st 2009 22 22
Updated 2009 Guidance Adjusted Cash Flow (1) High Low (amounts in millions) Original Guidance $211 $184 Closed Asset Sale Adjustment (17) (17) Adjusted Guidance (1) $194 $167 Changes Year to Date Gross Margin Improvement $6 $24 Opex Saving 7 7 G&A Saving 2 2 Net Change $15 $33 Updated Guidance (2) $209 $200 Pro forma Guidance after Treating Sale on Oct. 1 st 2010 $200 $191 (1) Adjusted cash flow is a non GAAP financial measure. (2) Adjusted to reflect sale of the Mississippi, Alabama and South Texas assets. 23 23
Strategic Focus Refinance Debt Working to put long term financing plan in place in 2010 Restore Distributions/Dividends Will follow long term financing plan High Return Investments Bolt on projects in NTX and N. LIG Leveraging existing assets Impacts to be realized in 2010 & 2011 NGL Business Re position gulf coast processing assets to take advantage of shifting environment 24 24
Q&A 25