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Crosstex Energy, L.P. Message Board

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  • geotype50 geotype50 Mar 10, 2010 2:24 PM Flag

    Headwinds

    I do not dispute your conclusion that you may have an opportunity to re-enter XTEX below today's price, especially if the general market weakens. I do not, however, find your reasoning persuasive. XTEX management has provided guidance that they expect to generate between $62 million and $96 million of DCF from operations in 2010. They have also stated that they expect to spend about $100 million of growth capex in 2010, although they have only included in their guidance the cash flow generated from the $25 million to $30 million in growth capex that the partnership has already approved. XTEX can fund between $45 million and $80 million of growth capex from their DCF and they have $215 million available on their revolver. I will be very surprised to see a secondary this year unless XTEX makes an acquisition. Finally, I don't know where you get the idea that XTEX's DCF came from asset sales. All of the proceeds from the asset sales went to debt reduction, not DCF.

    Jim

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    • BTW, you are correct that the proceeds of those asset sales went to pay down debt, but the other side of those transactions flowed through the P&L.

      Without a secondary, they will very likely need to go to the revolver to fund the difference between the $25-30M they say they have approved and the $75-100M they actually need in purely growth cap-ex, just for 2010. If they go to the revolver, do you not think any distribution may be delayed a quarter or two?

 
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