Crosstex Energy to Sell East Texas Assets to Waskom Gas Processing CompanyLast update: 12/15/2009 5:56:01 PMDALLAS, Dec 15, 2009 (BUSINESS WIRE) -- The Crosstex Energy companies, Crosstex Energy, L.P. (XTEX) (the Partnership) and Crosstex Energy, Inc. (XTXI) (the Corporation), announced today that the Partnership has entered into an agreement to sell its gathering and treating assets in East Texas for $40 million to Waskom Gas Processing Company. Proceeds from the sale will be used to pay down the Partnership's outstanding debt and for general corporate purposes. The sale is expected to close in January 2010 and is subject to customary closing conditions. "Our East Texas assets are very complimentary to Waskom's gas processing assets. This strategic synergy allowed us to sell our primarily fee-based East Texas assets at an attractive price. We are pleased that this sale allows us to further strengthen our balance sheet as we work to refinance our existing debt, with the goal of restoring distributions and dividends to our unitholders and shareholders," said Barry E. Davis, Crosstex President and Chief Executive Officer. "We remain focused on our core assets in the Barnett and Haynesville shales and our natural gas liquids business. We will continue to take advantage of low-cost, high-return growth projects in these areas," added Davis. Crosstex's East Texas system consists of approximately 60 miles of intrastate natural gas gathering pipelines, two compressor stations and three processing refrigeration plants. The system's throughput capacity is approximately 75,000 million British thermal units per day. About the Crosstex Energy Companies Crosstex Energy, L.P., a midstream natural gas company headquartered in Dallas, operates approximately 3,300 miles of pipeline, 10 processing plants and three fractionators. The Partnership currently provides services for 3.2 billion cubic feet of natural gas per day, or approximately six percent of marketed U.S. daily production. Crosstex Energy, Inc. owns the two percent general partner interest, a 33 percent limited partner interest and the incentive distribution rights of Crosstex Energy, L.P.
It's good to reduce the debt, but don't overlook that the more pieces of the company get sold off, the lower the eventual distribution will be. It becomes a smaller company with lower distributable cash flow.