July Newsreel: Crosstex Selling Assets, Jicarilla Apache Make ROW Deal, Most Arctic Natural Gas in Russian Territory

“The sale of our Mississippi, Alabama and South Texas assets enables us to strengthen our balance sheet as we pursue our strategy to increase liquidity, reduce leverage and improve profitability,” said Barry E. Davis, Crosstex President/CEO. “As we have said, asset sales are an important part of our deleveraging initiatives, and we will explore strategic transactions on an ongoing basis that we believe are in the best interests of the company and our stakeholders. We continue to focus on the growth of our strategic assets in North Texas and Louisiana, as well as our Treating business, and remain committed to being a premier provider of midstream energy services.”

“These are perfect assets to provide the foundation of our new company,” said David Biegler, Chairman/CEO of Southcross Energy.

The Mississippi and Alabama systems consist of 780 miles of intrastate gathering and transmission pipelines with throughput capacity of about 185,000 MMBtu/d. The South Texas system consists of 1,400 miles of intrastate gathering and transmission pipelines with throughput capacity of about 600,000 MMBtu/d and two processing facilities with a total processing capacity of 195,000 MMBtu/d. These three systems generated gross margin of $12 million and operating expenses of $4 million for first quarter 2009.

Jicarilla Apache Nation, Enterprise Announce Long-Term Right-of-Way Agreement

The Jicarilla Apache Nation and an affiliate of Enterprise Products Partners L.P. have signed a 20-year right-of-way agreement that will allow the partnership to continue its natural gas gathering operations on reservation lands in northwest New Mexico. Enterprise will continue to own and operate existing infrastructure and related assets located on tribal land, including 545 miles of gathering lines connected to the partnership’s San Juan Gathering system that have current throughput in excess of 30 MMcf/d of natural gas. Comprised of more than 6,000 miles of natural gas pipelines in New Mexico and Colorado, the San Juan system gathers more than 1 Bcf/d of natural gas.

Included in the long-term contract are incentives that could lead to future expansion of the gathering system on Jicarilla land. In addition to a fixed price component, the right-of-way agreement provides the Nation with opportunities to benefit from changing market conditions for energy commodities.

“The Nation’s agreement with Enterprise will stimulate our oil and gas economy while protecting our lands,” said Jicarilla Apache President Levi Pesata. “I’m pleased we reached this mutually beneficial agreement and the Nation looks forward to continuing our work with Enterprise.”

To protect sensitive religious, cultural and pristine sites, a small portion of the 1 million acres that comprise the Jicarilla reservation will be off-limits to oil and gas activity. Also, over the 20-year period of the right-of-way agreement, Enterprise will award 25 college scholarships to tribal members for training and employment opportunities. The partnership will join a committee made up of producers and tribal representatives to maintain a system of access roads serving oil and gas facilities that comply with specific Bureau of Land Management guidelines. The U.S. Department of the Interior has authority for granting final approval of the right-of-way agreement.

Arctic Natural Gas Mostly In Russian Territory, Study Finds