Devon Energy and Crosstex Energy Inc., two big players in the Barnett Shale and other U.S. oil and gas fields, said Monday they will combine their pipleines and processing plants into a new company. The deal is structured to absorb Dallas-based Crosstex Energy Inc. and also Crosstex Energy L.P. into the new, as-yet-unnamed enterprise, and Crosstex Energy Inc. shares jumped nearly 50 percent in early trading. The new company will be based in Dallas, and current Crosstex CEO Barry Davis will also be CEO of the new company. Devon's shares were up 3 percent.
The new company will have two publicly traded components, a master limited partnership and a general partner. Besides the Barnett, affected properties are in the Permian Basin, Eagle Ford, Marcellus, Utica Haynesville and other major shale fields. The new company will have about 7,300 miles of gathering lines and transportation pipelines, 13 processing plants, six fractionation plants (which divide natural gas liquids into ethane, propane and other components), and other storage and transportation facilities. Devon's contributions are valued at $4.8 billion. Devon will own 70 percent of the general partner and Crosstex shareholders will own 30 percent. Devon will own 53 percent of the MLP, Crosstex Energy L.P. unitholders will own 40 percent, and the new general partner will own 7 percent.
-- Jim Fuquay