GuruFocus Premium Membership

Serving Intelligent Investors since 2004. Only 96 cents a day.

Free Trial

Free 7-day Trial
All Articles and Columns »

Crosstex Energy L.P. Ltd. Partnership In Reports Operating Results (10-K)

February 25, 2011 | About:
10qk

10qk

18 followers
Crosstex Energy L.P. Ltd. Partnership In (XTEX) filed Annual Report for the period ended 2010-12-31.

Crosstex Energy L.p. Ltd. Partnership Interest has a market cap of $796.3 million; its shares were traded at around $15.86 with and P/S ratio of 0.6. The dividend yield of Crosstex Energy L.p. Ltd. Partnership Interest stocks is 6.6%. Crosstex Energy L.p. Ltd. Partnership Interest had an annual average earning growth of 3.4% over the past 5 years.Hedge Fund Gurus that owns XTEX: Whitney Tilson of T2 Partners Management, LP, Jim Simons of Renaissance Technologies LLC.

Highlight of Business Operations:

The aggregate market value of the Common Units representing limited partner interests held by non-affiliates of the registrant was approximately $253,615,778 on June 30, 2010, based on $10.54 per unit, the closing price of the Common Units as reported on The NASDAQ Global Select Market on such date.

Undertake selective construction and expansion opportunities on our existing systems. We intend to leverage our existing infrastructure and producer and customer relationships by expanding existing systems to meet new or increased demand for our gathering, transmission, processing and marketing services. We have two expansion projects that are underway in north Texas and scheduled for completion near the end of the first quarter of 2011. We are constructing a compressor station on an existing gathering line in north Texas at an estimated cost of less than $10.0 million to accommodate 50 MMcf/d of natural gas. This project will provide the capacity to meet the transportation requirements under a 10 year firm transportation agreement with a major Barnett Shale producer. The annual cash flow from the agreement is expected to be approximately $8.0 million. Our second project involves a 15 mile expansion of our natural gas gathering system in the Barnett Shale with an estimated cost of $25.0 million. The project is supported by volumetric commitments from a major gas producer. Cash flow from this project is expected to average approximately $10.0 million per year for the first four years. Capitalizing on our NGL capabilities. We believe there are near-term growth opportunities for our NGL business based on our ability to increase the utilization of our asset infrastructure which has excess capacity. We are targeting projects that create incremental stable fee-based income from our NGL fractionation business. We see a growing need for fractionation and NGL handling from liquids-rich gas production from the developing shale plays, including the Eagle Ford shale play in south Texas, the Granite Wash in the Texas Panhandle and Oklahoma, the Marcellus shale play in West Virginia and Pennsylvania and the Bakken shale play in North Dakota. These areas have limited NGL markets and/or inadequate NGL infrastructure. We are currently offering producers in these regions an interim solution by transporting NGLs via rail or truck to our fractionators in Louisiana. During 2010, we were handling approximately 7,300 Bbls/d under these type of arrangements. We have initiated construction on a project to bring 15,000 Bbls/d of idle fractionation capacity at our Eunice plant back into service which is expected to be completed during the first quarter of 2011 with an estimated cost of $9.0 million. The project is supported with existing system volumes and is expected to generate annual cash flow of approximately $3.0 million and will provide capacity for continued growth from our NGL rail aggregation business. Pursue accretive acquisitions or construction of facilities in new areas. We will also consider the acquisition and construction of facilities and systems in new areas in regions with significant natural gas reserves and high levels of drilling activity or with growing demand for natural gas 6

We resumed making quarterly distributions to our common unitholders during the third quarter of 2010. In November 2010, we paid a quarterly distribution of $0.25 per unit related to the three months ended September 30, 2010. We declared a quarterly distribution of $0.26 per unit in January 2011 that was paid in February 2011 related to the three months ended December 31, 2010. We believe the resumption of our distributions is an important milestone in accessing the capital markets to support our future growth strategies.

NGL Assets. Our NGL assets include our Eunice processing plant and fractionation facility, our Riverside fractionation plant, our Cajun Sibon pipeline system and our Napoleonville storage facility. We had excess capacity on our NGL assets during 2008 and 2009 and have made numerous operational changes and reconfigured operations to manage the lower utilization and reduce operating costs. During 2010, we have increased our focus on our NGL business in response to growing NGL supplies from new shale development by seeking additional volumes for fractionation through increased rail and truck deliveries and increased third-party pipeline rich gas supplies. Looking into 2011, we believe NGL supplies will continue to grow so we expect to see continued growth in our NGL business which will increase utilization of our facilities. Eunice Processing Plant and Fractionation Facility. The Eunice processing plant is located in south central Louisiana, has a capacity of 750 MMcf/d and processed approximately 412,000 MMBtu/d for the year ended December 31, 2010. The plant is connected to onshore gas supply, as well as continental shelf and deepwater gas production and has downstream connections to the ANR Pipeline, Florida Gas Transmission and Texas Gas Transmission, or TGT. The Eunice fractionation facility has a capacity of 36,000 Bbls/d of liquid products, including ethane, propane, iso-butane, normal butane and natural gasoline, and is directly connected to the southeast propane market and pipelines to the Anse La Butte storage facility. The plant was idled in August 2007, and the liquids from the Eunice processing plant were transported through our Cajun Sibon pipeline system to our Riverside plant for fractionation. We plan to restart our Eunice fractionator by the end of the first quarter of 2011 to take advantage of the activity around the liquid rich shale-plays, including the Eagle Ford, Permian, Granite Wash, Marcellus and Bakken plays. As part of this project, we will connect the Plaquemine fractionator into our NGL system for increased operational flexibility. This expansion will give us operational flexibility, increased fractionation capacity, and the ability to capture new NGL-related business. We expect to resume operations with an initial capacity to accommodate 15,000 Bbls/d of NGLs at Eunice and 10,800 Bbls/d at Plaquemine with the additional 21,000 Bbls/d of capacity at Eunice available for restart at a later date, as needed. The estimated cost to restart the fractionator and associated pipelines and facilities will be approximately $9.0 million. The project is supported by existing system volumes and is expected to generate annual cash flow of approximately $3.0 million and will provide capacity for continued growth from our NGL rail aggregation business. Riverside Fractionation Plant. The Riverside fractionator and loading facility is located on the Mississippi River upriver from Geismar, Louisiana. The Riverside plant has a fractionation capacity of approximately 28,000 Bbls/d of liquids products and fractionates liquids delivered by the Cajun Sibon pipeline system from the Eunice, Pelican and Blue Water plants or by truck. The Riverside facility has above-ground storage capacity of approximately 102,000 barrels. We have recently completed a project to reduce the fuel requirements at this facility by 15.0%. Cajun Sibon Pipeline System. The Cajun Sibon pipeline system consists of approximately 440 miles of 6" and 8" pipelines with a system capacity of approximately 28,000 Bbls/d and includes the 62 mile Intracoastal Pipeline acquired in December 2009. The pipeline transports unfractionated NGLs, referred to as raw make, from the Eunice, Pelican and Blue Water plants to either the Riverside or Eunice fractionators or to third party fractionators when necessary, and will be connected to the Plaquemine fractionator in 2011. 9

Read the The complete Report

About the author:

10qk
GuruFocus - Stock Picks and Market Insight of Gurus

Rating: 3.4/5 (5 votes)

Comments

Please leave your comment:


Get WordPress Plugins for easy affiliate links on Stock Tickers and Guru Names | Earn affiliate commissions by embedding GuruFocus Charts
GuruFocus Affiliate Program: Earn up to $400 per referral. ( Learn More)
Free 7-day Trial
FEEDBACK