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Crosstex Energy, Komandit ┼×irket Message Board

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  • lner2512 lner2512 Mar 11, 2010 1:43 AM Flag

    Headwinds

    I understand how MLPs normally fund growth but XTEX is not in a normal situation just now. They have been busy selling assets as fast as they can while they try to save the business, and they've been successful to date. Now they have to make money with the assets they have left. Their fate is basically tied to two shale plays; I think they need the revolver--and maybe a secondary--primarily to preserve their competitive position in those plays.

    I assume you would rather they not touch the revolver to fund 2010 distributions.

    And, yes, growth cap-ex usually generates cash flow, but not usually in the same year. And XTEX does not have a spotless record in that regard, or they would not have been forced to sell all those assets they bought in the last few years.

    I think XTEX will survive, but I'm not willing to put any money on it, at least until they put together a couple decent quarters of good DCF from operations.