2011 naptp master limited partnership investor...

2011 NAPTP Master Limited PartnershipInvestor Conference

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Barry E. Davis, President & CEO

May 26, 2011

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Forward Looking StatementsThis presentation contains forward looking statements within the meaning of the

federal securities laws. Forward looking statements are not guarantees of performance.

They involve risks, uncertainties and assumptions. The future results of Crosstex

Energy, L.P. and its affiliates (collectively known as “Crosstex”) may differ materially

from those expressed in the forward-looking statements contained throughout this

presentation and in documents filed with the SEC. Many of the factors that will

determine these results are beyond Crosstex’s ability to control or predict. These

statements are necessarily based upon various assumptions involving judgments with

respect to the future, including, among others, the ability to achieve synergies and

revenue growth; national, international, regional and local economic, competitive and

regulatory conditions and developments; technological developments; capital markets

conditions; inflation rates; interest rates; the political and economic stability of oil

producing nations; energy markets; weather conditions; business and regulatory or

legal decisions; the pace of deregulation of retail natural gas and electricity; the timing

and success of business development efforts; and other uncertainties. You are cautioned

not to put undue reliance on any forward looking statement. Crosstex has no obligation

to publicly update or revise any forward looking statement, whether as a result of new

information, future events or otherwise.

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Strategically Positioned for Performance and Growth

Well positioned, high quality assets

Providing full midstream value chain

Strong organizational capabilities

Strong balance sheet with great access to capital

Poised to take advantage of the macro environment

Investing in long-term, high-return growth projects

Strong distribution and dividend growth potential

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Midstream energy services company focused on full value chain

Assets strategically located in key producing areas and market regions

Focused Midstream Company Diversity of Services

Over 2,800 miles of natural gas gathering and transmission pipeline

9 natural gas processing plants

3 fractionators

Over 470 miles of NGL pipeline

2.4 MM barrels of NGL cavern storage

Petrochemical plants, Refineries

& Other NGL Markets

Wellhead

Gathering, Dehydration, Compression & Treating

Processing & Fractionation

Transmission Lines

NGL Transportation

Natural Gas Consumers

We Span the Value Chain

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Crosstex GP, LLC

Public/OtherShareholders

100%

Public Unitholders

51%

2% GP Interest

100% IDRs

Crosstex Energy, Inc.(NASDAQ: XTXI)

Directors / Executive Officers

87% 13%

2%

25%

Crosstex Energy

Services, L.P.

All Assets

and Operations

Crosstex Energy, L.P.(NASDAQ: XTEX)

22%

GSO Crosstex

Holdings

Crosstex Corporate Structure

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Strategically Positioned Assets

North Texas

~840 miles of pipeline

3 processing plants

2 treating plants

LIG

~2,100 miles of pipeline

2 processing plants

2 treating plants

PNGL ~440 miles of NGL pipeline

4 processing plants

3 fractionation facilities

$126

(49%)

$85

(35%)

$41

(16%)

2011 Segment Cash Flow*

($MM)

NTX LIG PNGL

* Represents mid-point ofguidance

Note: Segment Cash Flow is a non-GAAP financial measure. See Appendix for reconciliation to Operating income (loss)

North Texas

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NTX: Strategically Positioned in the Barnett Shale

Well Positioned Assets (current capacity) :

NTPL – 375 MMcf/d

NTX Gathering Assets – 1 Bcf/d +

Azle plant – 50 MMcf/d

Goforth plant – 30 MMcf/d

Silvercreek plant – 200 MMcf/d

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Achieved a milestone by exceeding 9 Tcf of cumulative production and currently averages 5.4 Bcf/d *

Infrastructure established in play during past 20 years will support further production growth

Rig efficiency, extensive knowledge of play, pad drilling and improved well recoveries mitigate impact of lower rig count

Producers have announced plans to maintain volumes

Barnett Shale: A Leading Unconventional Resource

* Powell Shale Digest (March 2011)

NSAI’s Barnett Shale Volume Projections

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-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

J-9

0

N-9

0

S-9

1

J-9

2

M-9

3

M-9

4

J-9

5

N-9

5

S-9

6

J-9

7

M-9

8

M-9

9

J-0

0

N-0

0

S-0

1

J-0

2

M-0

3

M-0

4

J-0

5

N-0

5

S-0

6

J-0

7

M-0

8

M-0

9

J-1

0

N-1

0

S-1

1

J-1

2

M-1

3

M-1

4

J-1

5

N-1

5

S-1

6

J-1

7

M-1

8

MM

CF

D

Barnett Volume Projection(PIRA 4/11 Fcst)

High Base Low

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NTX: New Growth Projects

North Texas Expansion Project- Fossil Creek:

₋ New 10 yr. firm gathering & compression agreement on Fossil Creek system

₋ Minimum volume commitment of 50,000 MMbtu/d

₋ Expected capital of less than $10 million cash

₋ Expected annual run-rate cash flow of >$9 million per year

₋ Initiated service: April 1, 2011

₋ April volumes averaged 50 MMcf/d

North Texas Expansion Project- Benbrook:

₋ $25 million, 15-mile expansion project supported by volumetric commitments

₋ Seven-mile low-pressure pipeline, eight-mile high-pressure pipeline and compressor

₋ Peak flow rate in 2012 expected to be more than 100 MMbtu/d

₋ Expected annual run-rate cash flow of >$11 million per year on average for first four years

₋ Initiated service: April 17, 2011

₋ April volumes were 50 MMcf/d; May volumes averaged 66 MMcf/d

LIG

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LIG: Strategically Located Assets

Well Positioned Assets (current capacity) :

LIG ~ 1Bcf/d (+)

Gibson Plant – 145 MMcf/d

Plaquemine Plant – 225 MMcf/d

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LIG: Strong Execution onHaynesville Opportunities

Haynesville Projects

Capacity MMcf/d

In Service Total Contracted

N. LIG Contracted Projects

Red River Project Q3 2007 240 240

North LIG Expansion Phase I Q4 2008 35 35

North LIG Expansion Phase II Q2 2009 100 100

Black Lake Interconnect Phase III – Part I Q4 2009 35 35

Red River Amine Unit (120 MMcf/d Capacity) Q4 2009

Black Lake Interconnect Phase III – Part II Q2 2010 25 25

LIG Phase IV Expansion- Part I Q3 2010 30 30

Total 465 465

North LIG capacity is fully contracted with a weighted average remaining contract life of five years.

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Exposure to multiple plays with growing producer activity targeting liquids

Active leasing programs have been publicized

Drilling programs at early stage in several parishes around LIG

LIG has recently completed gathering and processing agreements on several new rich wells

LIG and PNGL infrastructure has existing and expandable capacity

New Strategic Potential for LIG/PNGL

Processing and NGL’s

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PNGL : Strategically Positioned

Ultra deep

shelf

Ultra Deep

Eunice & Sabine

Corridor Pelican Corridor

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Riverside

Fractionator

and Terminal

Eunice

Fractionator

and Terminal

Southern Louisiana

& Gulf of Mexico

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Available processing capacity is well positioned for increasing liquids rich production

Improved NGL capacity and capabilities attract volume growth from developing rich shale plays

₋ NGL volumes received via truck and rail up over 75% since 2008

Pursuing pipeline access to NGL supply in Mt. Belvieuarea

Developing crude oil terminal opportunities

PNGL: Strategically Positioned for Long-Term Growth

PNGL: Eunice Frac Restart

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Restarted 15,000 Bbls/d of existing 36,000 Bbls/d frac

Capex - $9.3MM with expected operating income contribution of $3.3MM annually

Contract commitments expected to add more than 10,000 Bbls/d by Q3 2011

Upside – additional capacity to bring liquids from other plays

Growth Opportunities

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Growth Opportunities –Shale / Resource Plays

Robust Industry Environment:

₋ Shale plays drive midstream infrastructure and services needs

₋ Forecasted $6-10B per year of midstream infrastructure

Crosstex Key Capabilities:

₋ Excess fractionation with rail, truck and barge access

₋ NGL market knowledge through PNGL

₋ Experience with large shale developments

₋ Access to Louisiana Gulf Coast crude (LLS) and NGL markets

Primary Growth Strategies Outside Existing Core Areas:

– Acquire existing assets to serve as platform for growth in target areas

– Organic build of new infrastructure in emerging shale plays

Strategic advantages:

– Immediate NGL/crude solutions for producers with pipeline or market constraints

– Connecting our NGL frac capacity in Louisiana to liquids supply in Mt. Belvieu

– Enhance crude oil marketing and logistics capabilities to provide midstream solutions for all producers 22

Strategic Growth Opportunities

Unconventional resource plays driving substantial increase in US crude production

– In 2009, U.S. crude production increased for the first time in 30 years

– Crude rig counts have increased from ~165 to almost 1000 since 2004

Regional infrastructure bottlenecks have created substantial differentials to Louisiana Gulf Coast Crude (LLS) markets

Eunice and Riverside have rail, truck, pipeline, and barge facilities that are being modified for use as crude oil terminal

– Facilities currently being modified to receive up to 5,000 Bbls/d in Phase 1 with margin potential of up to $10 mm/year and initial flow targeted for August 1

– Potential expansion to handle up to 50,000 Bbls/d

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Crude Terminal Opportunity

Financial Overview

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Current Financial Focus

Maintaining strong liquidity position for flexibility

₋ No near term debt maturities

₋ Over $370 million available on revolver

Maintaining conservative capital structure and leverage ratios

₋ High coverage of distribution continues to reduce leverage

Improving cash flows by:

₋ Investing in high-return projects

₋ Improving efficiencies of existing assets

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Solid Performance in 3 Key Areas

Note: Segment Cash Flow is a non-GAAP financial measure See Appendix for a reconciliation to Segment Profit* 2011 represents mid-point of guidance 26

CAGR (2007 – 2011) for total segment cash flows of 9.4%

Shows the strength of the core business

PNGL’s focus on NGL opportunities has provided fee-based diversified cash flows

and improved business profitability

NTX growth projects (Benbrook and Fossil Creek) drive solid growth in 2011

Segment Cash Flow 2007 2008 2009 2010 2011*

($ in Millions)

NTX $62 $103 $113 $114 $126

LIG 72 82 80 82 85

PNGL 42 12 21 38 41

Total Asset Segments 176 197 214 235 252

Years Ended December 31,

(Unaudited)

Fee Based FocusNon-commodity based margins increased from ~68% in 2008 to an estimated 78% in 2011 (in Guidance)

(1) 2008 excludes Discontinued Operations (2) 2011 represents mid-point of Guidance

58%

10%

17%

15%

2008 (1)

66%

12%

13%

9%

2009

62%14%

11%

13%

2010

63%15%

13%

9%

2011 (2)

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Gathering & Transmission Fee Based Processing & Fractionation Percent of Liquids Processing Processing Margin

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Guidance for 2011

Low High

$ (27) $ 4

119 119

8 8

83 82

2 2

$ 185 $ 215

(2) (2)

(83) (82)

(14) (11)

$ 86 $ 120

$ 50 $ 150

$ 0.83 $ 1.18

$ 60.21 $ 85.69

$ 4.50 $ 3.50

208.5% 381.6%

$ 1.04 $ 1.20

$ 0.32 $ 0.40 XTXI Dividends per Share

Total Year 2011

Key Assumptions for Forecast

Weighted Average Liquids Price

Crude ($/bbl)

Natural Gas ($/MMbtu)

Natural Gas Liquids to Gas Ratio

XTEX Distribution per Unit

Adjusted EBITDA*

Taxes and other

LOC Fees & Interest

Maintenance capital expenditures

Distributable cash flow*

Growth Capital

Net income

Depreciation and amortization

Stock-based compensation

LOC Fees & Interest

Taxes and other

* Adjusted EBITDA and Distributable cash flow are non-GAAP measures

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Hedging Process and Policy

Maintain a balanced contract mix and an active commodity price hedging program consistent with risk management guidelines

₋ No speculative hedging positions, no compensation for taking positions

₋ Utilization of product-specific swaps and put options

Committee meets on regular basis to assess exposure and hedge consistent with our policies

₋ Hedge no more than 80% of hedgeable exposure

₋ Ensure hedging instruments are correlated to the underlying commodity

₋ Can only be executed to close on open physical position

Certain contracts structured by setting a floor fee to further eliminate risk

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2011 Commodity Sensitivity Annual Impacts

₋ ± $.10 NGL Pricing (POL)- $3.6 MM (Net of Hedges)

₋ ± 5% NGL- Gas Ratios(Proc Margin)- $3.2 MM (Net of Hedges)

Note: all volumes are in millions of gallons

Hedged Volume as a % of Hedgeable Volume

2011

Q1 Q2 Q3 Q4

POL

Total VAR Volumes 10.65 12.32 12.16 12.20

Total Hedgeable Volumes 4.09 5.14 4.98 5.12

Total Hedged Volumes 3.09 2.95 3.89 4.78

Hedged Percentage 75% 57% 78% 93%

Proc Margin



Total Hedged Volumes 5.53 5.17 3.36 2.90


2012 Commodity Sensitivity

* All volumes are in millions of gallons** All hedged positions shown are as of May 18, 2011 and are subject to change.

Hedged Volume as a % of Hedgeable Volume

2012

Q1 Q2 Q3 Q4

POL



Total Hedged Volumes 2.43 2.31 .65 .80


Proc Margin



Total Hedged Volumes 3.53 3.24 0 0


3232

Credit FacilityBorrower: Crosstex Energy, L.P.

Facility: $485 MM Senior Secured Revolving Credit Facility

Maturity: 5 Years (May 2016)

Pricing:

Financial Covenants: Maximum Total Leverage Ratio of 5.00x with step-downs to 4.75x

Maximum Senior Secured Leverage Ratio of 2.75x

Minimum Interest Coverage Ratio of 2.00x with step-ups to 2.50x

Liquidity:LC’s Liquidity

Borrowing Outstanding Available

$42 MM $72 MM $371 MM

Applicable Margin

≥ 4.5x 3.00% 2.00% 0.50%

≥ 4.0x 2.75% 1.75% 0.50%

≥ 3.5x 2.50% 1.50% 0.50%

≥ 3.0x 2.25% 1.25% 0.50%

< 3.0x 2.00% 1.00% 0.38%

Funded Debt /

EBITDALIBOR+ ABR+

Commit

Fee

2011 naptp master limited partnership investor...

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