Crosstex, Contango Sign Agreement to Process GOM Deep-Shelf Gas

Crosstex Energy, L.P. announced an agreement with Contango Operators, Inc. to process gas from Contango's Mary Rose gas field discoveries that successfully tested deep-shelf plays in the Gulf of Mexico. The gas will be transported through an interstate natural gas pipeline to Crosstex's Pelican plant near Patterson, Louisiana, from Contango's production platform on Eugene Island Block 11.

Beginning in late April, the Pelican plant is scheduled to process up to 100 million cubic feet of gas per day (MMcf/d) as Contango initiates production from its Mary Rose-1 and -3 wells. As Contango develops the field, the company expects production could increase to as much as 250 MMcf/d. Crosstex's Pelican plant currently is processing approximately 200 MMcf/d, and the facility has a designed capacity to process 600 MMcf/d.

"Crosstex's assets in southern Louisiana provide us with a large-scale gas processing presence on the Gulf Coast. We are excited about this project and look forward to a long-term working relationship with Contango, a deep-shelf producer and new customer," said Barry E. Davis, Crosstex President and Chief Executive Officer. "Pelican is just one of several Crosstex processing plants in Louisiana straddling segments of interstate pipelines that gather gas produced in the Gulf of Mexico. Consequently, we are well positioned to process offshore production headed for markets in the upper Midwest and northeastern U.S."