Crosstex Energy, L.P. (NASDAQ: XTEX) and Crosstex Energy, Inc.
(the “Corporation”) (NASDAQ: XTXI) (collectively “Crosstex”) today
provided preliminary 2014 financial guidance for EnLink Midstream
Partners, LP (MLP) and EnLink Midstream, LLC (GP) (collectively
“EnLink Midstream”), assuming the completion of the previously
announced merger and contribution transactions in the first
quarter. The projections provided herein include financial
synergies.
EnLink Midstream expects combined adjusted EBITDA of
approximately $525 million from the beginning of the second quarter
through the fourth quarter of 2014 with EnLink Midstream Partners,
LP contributing approximately $375 million of that adjusted EBITDA.
On an annualized basis, these forecasts equate to approximately
$700 million of combined adjusted EBITDA at EnLink Midstream,
including approximately $500 million at EnLink Midstream Partners,
LP.
Projected distributions for fiscal year 2014 are expected to be
approximately $1.47 per common unit at EnLink Midstream Partners,
LP and approximately $0.80 per common unit at EnLink Midstream,
LLC. The payment and amount of distributions will be subject to
approval by the respective EnLink Midstream Boards of Directors and
to economic conditions and other factors existing at the time of
the determination of each quarterly distribution.
Expected growth capital expenditures at EnLink Midstream
Partners, LP in the second quarter through the fourth quarter of
2014 are approximately $300 million. Expected maintenance capital
expenditures in the second quarter through the fourth quarter of
2014 will be approximately $80 million at EnLink Midstream and
approximately $50 million at EnLink Midstream Partners, LP.
Adjusted EBITDA, growth capital expenditures and maintenance
capital expenditures are non-GAAP financial measures and are
explained in greater detail under “Non-GAAP Financial
Information.”
“We are proceeding as planned with closing the transaction to
form EnLink Midstream, a leading midstream company with a diverse
geographic footprint and a strong financial foundation,” said Barry
E. Davis, CEO of Crosstex and incoming CEO of EnLink Midstream.
“Our guidance projections illustrate the financial benefits of this
strategic combination. With a strong financial foundation, improved
cash flow stability and enhanced growth outlook, EnLink Midstream
will have a greater capacity to pay distributions, creating
significant value for all of our equity holders.”
Additional details on guidance will be provided in EnLink
Midstream’s Analyst Day presentation on May 12, 2014.
About EnLink Midstream
On October 21, 2013, Crosstex and Devon Energy Corporation
(“Devon”) (NYSE: DVN) announced their agreement to combine
substantially all of Devon’s U.S. midstream assets with Crosstex’s
assets to form a new midstream business. The new business will
consist of two publicly traded entities: the master limited
partnership, whose name will change upon closing from Crosstex
Energy, L.P. to EnLink Midstream Partners, LP, and a publicly
traded general partner entity, which will be called EnLink
Midstream, LLC. Applications have been filed to list the common
units of both EnLink Midstream Partners, LP and EnLink Midstream,
LLC on the New York Stock Exchange upon the closing under the
symbols “ENLK” and “ENLC”, respectively. The new website for EnLink
Midstream can be found at www.enlink.com. The transaction, which is
expected to close in the first quarter of 2014, is subject to
approval by the stockholders of the Corporation as well as other
customary closing conditions.
About Devon Energy
Devon Energy Corporation is an Oklahoma City-based independent
energy company engaged in oil and gas exploration and production.
Devon is a leading U.S.-based independent oil and gas producer and
is included in the S&P 500 Index. For more information about
Devon, please visit www.devonenergy.com.
About the Crosstex Energy Companies
Crosstex Energy, L.P. (NASDAQ: XTEX) is an integrated midstream
energy partnership headquartered in Dallas that offers diversified,
tailored customer solutions spanning the energy value chain with
services and infrastructure that link energy production with
consumption. 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 disposal wells and an
extensive truck fleet. XTEX has the right platform, the right
opportunities and the right people to pursue its growth-focused
business strategy.
Crosstex Energy, Inc. (NASDAQ: XTXI) owns the general partner
interest, the incentive distribution rights and a portion of the
limited partner interests in Crosstex Energy, L.P. as well as the
majority interest in E2, a services company focused on the Utica
Shale play in the Ohio River Valley.
Additional information about the Crosstex companies can be found
at www.crosstexenergy.com.
Additional Information and Where to Find It
This press release contains information about the proposed
merger involving a Devon entity and a Crosstex entity. In
connection with the proposed merger, EnLink Midstream, LLC
(formerly known as New Public Rangers, L.L.C.) filed with the SEC a
registration statement on Form S-4 that includes a proxy
statement/prospectus for the Corporation’s stockholders. The
Corporation commenced the mailing of the final proxy
statement/prospectus to stockholders on February 6, 2014. Investors
and stockholders are urged to read the proxy statement/prospectus
and other relevant documents filed or to be filed with the SEC.
These documents and any other documents filed by Crosstex or Devon
with the SEC, may be obtained free of charge at the SEC’s website,
at www.sec.gov. In addition, stockholders will be able to obtain
free copies of the proxy statement/prospectus from the Corporation
by contacting Investor Relations by mail at Attention: Investor
Relations, 2501 Cedar Springs, Dallas, Texas 75201.
Participants in the Solicitation
Devon, Crosstex and their respective directors and officers may
be deemed to be participants in the solicitation of proxies from
the stockholders of the Corporation in respect of the proposed
transaction. Information regarding the persons who may, under the
rules of the SEC, be deemed participants in the solicitation of the
stockholders of the Corporation in connection with the proposed
transaction, including a description of their direct or indirect
interests, by security holdings or otherwise, is set forth in the
preliminary proxy statement/prospectus filed with the SEC.
Information regarding the Corporation’s directors and executive
officers is contained in its Annual Report on Form 10-K for the
year ended December 31, 2012, which is filed with the SEC.
Information regarding Devon’s directors and executive officers is
contained in its Annual Report on Form 10-K for the year ended
December 31, 2012, which is filed with the SEC.
Non-GAAP Financial Information
This press release contains non-generally accepted accounting
principle financial measures that Crosstex refers to as adjusted
EBITDA, growth capital expenditures and maintenance capital
expenditures. Adjusted EBITDA is defined as net income (loss) plus
interest expense, provision for income taxes, depreciation and
amortization expense, impairments, stock-based compensation, (gain)
loss on non-cash derivatives, transaction costs associated with
successful transactions, distribution from a limited liability
company and non-controlling interest; less (gain) loss on sale of
property and equity in income (loss) of a limited liability
company. The amounts included in the calculation of this measure
are computed in accordance with generally accepted accounting
principles (GAAP) with the exception of maintenance capital
expenditures. Growth capital expenditures are defined as all
construction-related direct labor and material costs, as well as
indirect construction costs including general engineering
costs and the costs of funds used in construction. Maintenance
capital expenditures are capital expenditures made to replace
partially or fully depreciated assets in order to maintain the
existing operating capacity of the assets and to extend their
useful lives.
Crosstex believes these measures are useful to investors because
they may provide users of this financial information with
meaningful comparisons between current results and prior-reported
results and a meaningful measure of EnLink Midstream’s and
Crosstex’s cash flow after it has satisfied the capital and related
requirements of its operations.
Adjusted EBITDA, growth capital expenditures and maintenance
capital expenditures, as defined above, are not measures of
financial performance or liquidity under GAAP. They should not be
considered in isolation or as an indicator of EnLink Midstream’s or
Crosstex’s performance. Furthermore, they should not be seen as
measures of liquidity or a substitute for metrics prepared in
accordance with GAAP.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the federal securities laws. Although these
statements reflect the current views, assumptions and expectations
of Devon's and Crosstex's management, the matters addressed herein
involve certain risks and uncertainties that could cause actual
activities, performance, outcomes and results to differ materially
than those indicated. Such forward-looking statements include, but
are not limited to, statements about future financial and operating
results, objectives, expectations and intentions and other
statements that are not historical facts. Factors that could result
in such differences or otherwise materially affect Devon's,
Crosstex's or the new company's financial condition, results of
operations and cash flows include, without limitation,(a) failure
to consummate the transactions due to unsatisfied closing
conditions with respect the transactions or failure to obtain
regulatory approval for the transactions, (b) the risk that the new
company will not be integrated successfully or that such
integration will take longer than anticipated, (c) the possibility
that expected synergies will not be realized, or will not be
realized within the expected timeframe, (d) fluctuations in oil,
natural gas and NGL prices, (e) the extent and success of drilling
efforts, as well as the extent and quality of hydrocarbon volumes
produced within proximity of our assets, (f) failure or delays by
customers in achieving expected productions in their projects, (g)
competitive conditions in our industry and their impact on our
ability to connect hydrocarbon supplies to our assets, (h) actions
or inactions to or non-performance by third parties, including
suppliers, contractors, operators, processors, transporters and
customers, (i) our ability to consummate future acquisitions,
successfully integrate any acquired businesses, realize any cost
savings and other synergies from any acquisition, (j) changes in
the availability and cost of capital, (k) operating hazards,
natural disasters, weather-related delays, casualty losses and
other matters beyond our control, (l) timely receipt of necessary
government approvals and permits, our ability to control the costs
of construction, including costs of materials, labor and
right-of-way and other factors that may impact our ability to
complete projects within budget and on schedule, (m) the effects of
existing and future laws and governmental regulations, including
environmental and climate change requirements, (n) the effects of
existing and future litigation and (o) risks related to Crosstex’s
substantial indebtedness, as well as other factors disclosed in
Devon's and Crosstex's filings with the SEC. You should read
Devon's and Crosstex's filings with the SEC, including their
respective Annual Reports on Form 10-K for the year ended December
31, 2012 and their Quarterly Reports for the quarters ended March
31, 2013, June 30, 2013 and September 30, 2013 and other filings
made with the SEC. Neither Devon nor Crosstex assumes any
obligation to update these forward-looking statements.
Crosstex EnergyJill McMillan,
214-721-9271Director, Public & Industry
AffairsJill.McMillan@CrosstexEnergy.com
Crosstex Energy, Inc. (MM) (NASDAQ:XTXI)
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