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Crosstex Energy's CEO Discusses Q3 2011 Results - Earnings Call Transcript

We maintain the quarterly distribution at $0.31 per unit and the dividend at $0.10 per share. We expect these rates will remain flat through the fourth quarter of 2011 prior to the growth projects starting up in 2012. With the temporary operational challenges and a continued contribution from the commodity-based opportunities, we kept the distribution and dividend flat in the third quarter at $0.31 and $0.10 per share, respectively. This still represents a year-to-year date -- year-to-date increase in distributions of approximately 19% and dividends of approximately 25%.

Our distribution so far this year have put it us in a position to exceed the top end of our distribution and dividend guidance. It's important for you to take away that we remain committed to distribution growth while maintaining disciplined balance sheet management. Because of the importance of distributions and dividends, Mike will go into greater detail regarding our plans and the process we go through to set them. However, I want to emphasize that we set them at the level we believe is appropriate given the results of the quarter and forward projections and not in the motive of quarter-by-quarter increases, which are not justified by actual results.

Before I give an update on growth projects, I want to discuss the current industry environment. As you know, there has been significant activity in our industry sector this quarter. We think this indicates great optimism that the natural gas industry will continue to grow and highlights the value of our franchise positions in North Texas and throughout Louisiana, as well as our capabilities to provide infrastructure and services in new basins.

Today's market price for natural gas is about $3.50 per MMBtu with expectations that it will remain in this range for some time. Crude has been trading around $90 per barrel with weighted average natural gas liquids prices trading around $1.35 per gallon. The relative low gas price compared to crude and NGL prices has caused a shift to rich gas and crude. And the oil and gas rig count in North America tell the story.

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