New Company Formed to Build Compressor Stations
DALLAS -- The Crosstex Energy companies, Crosstex Energy L.P. XTEX +3.17% (the partnership) and Crosstex Energy Inc. XTXI +4.31% (the corporation), today announced it has joined with the former management of Enerven Compression Services to form a new company, E2, that will provide services for producers in the liquids-rich window of the Utica Shale play.
The initial investment of approximately $50 million will include new natural gas compression and condensate stabilization facilities in Noble and Monroe counties in Ohio. The company said its investment will complement the partnership's assets in the Ohio River Valley, which encompass crude oil, condensate and logistics operations in the Utica and Marcellus Shale plays.
E2 will build, own and operate two gas gathering compressor stations and condensate stabilization assets in Noble and Monroe counties, which are "immediately east of the partnership's assets in the Ohio River Valley," Crosstex said. These initial facilities are supported by a long-term, fee-based contract with an active producer, the company added. E2 will serve as the manager and operator of these assets with expected commercial operations to start up during the third quarter.
A wholly-owned subsidiary of Crosstex Energy Inc. has entered into a $75 million senior secured credit facility in order to provide the financing for the corporation's investment in E2, Crosstex said. The corporation will own approximately 93% of E2 and has pre-determined rights to purchase the remaining ownership interests of E2 in the future.
"Our investment in E2 is a strategic step in growing our platform in the Ohio River Valley. Utilizing the corporation for this investment provides an additional source of capital for growth," said Barry E. Davis, Crosstex President and CEO. "We are pleased to begin our partnership with the E2 management and expect this to be the first of many similar transactions with them as we expand our footprint in the Utica and Marcellus regions. Crosstex's entrance into condensate stabilization is another step in realizing our long-term vision for offering additional condensate solutions in the Utica. We will continue to leverage our condensate expertise and trucking business to ensure our customers receive the highest possible value for their condensate product," Davis added.
Crosstex Energy, L.P. XTEX +3.17% is an integrated midstream energy partnership. XTEX operates approximately 3,500 miles of natural gas, natural gas liquids and oil pipelines, 10 natural gas processing plants and four fractionators, as well as barge and rail terminals, product storage facilities, brine water disposal wells and an extensive truck fleet.
SOURCE: Crosstex Energy.
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