1 November 19 th , 2009 Barry E. Davis, President and Chief Executive Officer November 19 th , 2009 Barry E. Davis, President and Chief Executive Officer RBC Capital Markets MLP Conference RBC Capital Markets MLP Conference
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November 19th, 2009
Barry E. Davis, President and Chief Executive Officer
November 19th, 2009
Barry E. Davis, President and Chief Executive Officer
RBC Capital Markets MLP ConferenceRBC Capital Markets MLP Conference
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Forward Looking StatementsForward Looking StatementsThis 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.
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Crosstex OverviewCrosstex Overview
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
Focused Midstream CompanyFocused Midstream Company Strong Asset BaseStrong 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
Wellhead
Gathering, Dehydration & Compression
Processing ,Conditioning & Treating
Transmission Lines
NGL Transportation & Fractionation
Natural Gas Consumers
NGL Markets
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Crosstex Ownership StructureCrosstex Ownership Structure
Public Unitholders Public Shareholders Directors / Executive Officers
Crosstex Energy, Inc.(NASDAQ: XTXI)
Crosstex Energy, Inc.(NASDAQ: XTXI)
Crosstex Energy GP, L.P.Crosstex Energy GP, L.P.
Crosstex Energy, L.P.(NASDAQ: XTEX)
Crosstex Energy, L.P.(NASDAQ: XTEX)
33%
87%67% 13%
100%
2%
2% GP Interest100% IDRs
All Assets and OperationsAll Assets
and Operations
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Executing Our PlanExecuting Our PlanThe 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
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Getting ResultsGetting 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
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Strategically Located AssetsStrategically Located Assets
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Business FocusBusiness Focus……Shale OpportunitiesShale OpportunitiesGross 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
** Data from Chesapeake Investor Presentation Oct. 2009
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
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LIG: Strategically Positioned for LIG: Strategically Positioned for Haynesville ShaleHaynesville Shale
LIG System NGL System Processing Plant
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LIG: Haynesville ProjectsLIG: Haynesville ProjectsLIG: Haynesville Projects
Black Lake Interconnect
Partial System Loop
Red River Phase I
North LIG Expansion Phase II/III
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NTX: Strategically Positioned for Barnett ShaleNTX: Strategically Positioned for NTX: Strategically Positioned for Barnett ShaleBarnett Shale
Able to capitalize on new drilling as markets improve
Production levels remaining stable on our systems
Focus on efficiency opportunities
North Texas Pipeline &Gathering Systems
Gulf Crossing / NGPL
Processing Plant
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Gulf Coast Processing & NGL: Strategically Gulf Coast Processing & NGL: Strategically Located & Diverse Asset BaseLocated & Diverse Asset Base
LIG System NGL System Processing Plant
Integrated midstream asset group located in gulf coast of Louisiana
6 Cryogenic plants
2 Fractionation FacilitiesGathering and distribution lines with access to petro‐chemand refinery markets
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Strategic FocusStrategic FocusRefinance Debt– Working to put long‐term financing plan in place
Restore Distributions/Dividends– Will follow long‐term financing plan
High Return Investments – Bolt‐on projects in NTX and N. LIG
– Leveraging upon existing assets
– Impacts to be realized in 2010
NGL Business– Re‐position gulf coast processing assets to take advantage of shifting
environment
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AppendixAppendix
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LIG: System OverviewLIG: System OverviewSystem: 2,450 miles of gathering/transmission
Largest Louisiana intrastate marketer
330 MMCFD Processing Capacity
Markets:– Industrial
– Power/Utility
– Southern Louisiana/Mississippi River
Haynesville Exposure:– Strategic position
– Haynesville drilling activity increasing
– Current Haynesville Capacity Expansions & Timing:
– “Bolt On” to original capacity
– Low cost, high return projects
– Generate new opportunities
– Underwritten by long‐term Firm Transport contracts with major producers
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NTX: System OverviewNTX: System OverviewFavorable 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 = 794,000 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 = 314,000
MMBtu/d
3 Cryogenic plants with 280 MMcf/d processing capacity
Average processed volume for the nine months ended September 30, 2009 = 220,000 MMBtu/d
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Integrated Midstream Asset Group located in the Gulf Coast of South Louisiana
(4) Cryogenic Gas Processing Plants straddling major interstatepipelines and (2) straddling LIG’s system
(2) NGL fractionation facilities; integrated gathering and distribution lines with access to petchem and refinery markets
(2) – 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
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NGL Business OverviewNGL Business Overview
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Haynesville Provides Abundant Near Haynesville Provides Abundant Near Term OpportunitiesTerm Opportunities
Capacity MMcf/d Contract
Haynesville Projects In Service Total Contracted Term
Projects – Completed
Red River Phase I Q3 2007 240 240 7 yr
North LIG Expansion Phase II Q4 2008 35 35 10 yr
North LIG Expansion Phase III Q2 2009 100 100 10 yr
Projects ‐ In Progress
Black Lake Interconnect Q4 2009 70 35 3 yr
Partial System Loop Q2 2010 75 Under negotiation
All Projects 520 410
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Historical PerformanceHistorical Performance
* Adjusted Cash Flow and Distributable Cash Flow are non‐GAAP financial measures. A reconciliation of these measures to net income is
included in the Appendix to this presentation.
** Includes contribution from sale of Seminole and monetization of capacity on Gulf Crossing
Financial Metrics Twelve Months Ended Nine Months Ended(000ʹs) December 31, 2008 September 30, 2009
Adjusted Cash Flow * $248,906 $161,471
Distributable Cash Flow * $180,192 ** $56,903
Debt $1,291,602 $1,064,403
LTM Debt/Adjusted Cash Flow 4.3 x 5.6 x
Covenants 5.00 x 8.25 x
Twelve Months Ended Nine Months EndedVolume and Prices December 31, 2008 September 30, 2009
Gathering and Transmission Volume (MMBtu/d) 2,608,000 2,038,000
Processing Volume (MMBtu/d) 1,812,000 1,257,000
Realized Weighted Average NGL Price ($/gallon) $1.36 $0.84
Average Henry Hub Gas Price ($/MMBtu) $8.89 $3.39