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Crosstex Energy, L.P. Message Board

  • disabledretiree disabledretiree Apr 10, 2013 9:13 PM Flag

    New Subsidiary to handle the Marcellus Shale gas?

    Has anyone heard anything of interest about the supposed creation of a new subsidiary of Crosstex called "E2" that is supposed to handle gas that is being produced from the Marcellus Shale play? There was some very good notices about it given in Dividend Detective as being an excellent move by the company, which it may be if it makes money and reduces the drag that some of the other less than profitable because of the gas glut, transportation overhaul, whatever, that is going on right now.

    Sentiment: Hold

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    • Looks like this is your answer. Will be a drop down to XTEX at some point. The Crosstex Energy companies…announced that the Corporation has agreed to invest approximately $25 million in a third natural gas compression and condensate stabilization facility in the Ohio River Valley. The Corporation will make the investment in E2, a company formed in March 2013 with the former management of Enerven Compression Services to provide services for producers in the liquids-rich window of the Utica Shale play. The Corporation’s initial investment commitment in E2 of approximately $50 million is funding the construction of two similar facilities. The E2 investment complements the Partnership’s assets in the Ohio River Valley, which encompass crude oil, condensate and logistics operations in the Utica and Marcellus Shale plays.
      “We are pleased to make this additional investment in E2 and expand our midstream platform in the Ohio River Valley. We are enthusiastic about the potential of the Utica and expect there will be many similar future transactions as we build our business in this region,” said Barry E. Davis, Crosstex President and Chief Executive Officer.
      E2 will build, own, manage and operate all three compressor station and condensate stabilization assets in Noble and Monroe counties in the southern portion of the Utica Shale play in Ohio. The counties are located immediately east of the Partnership’s assets in the Ohio River Valley…. A wholly-owned financing subsidiary of the Corporation has expanded its senior secured credit facility from $75 million to $90 million in order to provide continued financing for the Corporation’s investment in E2. The Corporation owns approximately 93 percent of E2 and has pre-determined rights to purchase the remaining ownership interests of E2 in the future.

    • had not heard that speculation. would be surprised as Marcellus/Utica is pretty small ebitda right now unless it was related to a major acquisition. linn did something similar to this with lnco to fund linn growth

 
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