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Southcross Bolsters Eagle Ford Activity in 3Q; Acquires Assets

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Southcross Energy Partners, L.P. announced third quarter 2014 financial and operating results.

Financial and Operating Highlights

• Completed on August 4, 2014 the acquisition of pipeline and processing assets in the Eagle Ford region consisting of a 300 MMcf/d gas processing facility and over 230 miles of rich gas and residue gas pipelines
• Commenced on November 1, 2014 operation of the new Webb Pipeline, extending Southcross’ rich gas pipeline system through the western region of the Eagle Ford and adding a new minimum volume commitment of 40,000 MMBtu/d
• Connected a new gathering system constructed by our holding company that is adding approximately 43,750 MMBtu/d in liquids-rich gas to our processed gas volumes
• Reported strong operational growth with processed gas volumes up 42% and fractionated NGL volumes up 23% over the second quarter of 2014

Third Quarter Results

David Biegler, Chairman and Chief Executive Officer of Southcross’ general partner, commented: "The third quarter included a number of important milestones for Southcross, including our acquisition of pipeline and processing assets from TexStar Midstream Services, LP. At the same time, our parent, Southcross Energy LLC, combined with TexStar to create a holdings company with attractive operating assets we expect to be available for future drop-downs to Southcross. We recently completed several major growth projects, including the completion of our Webb Pipeline, and we have seen strong increases in processed gas volumes and the production of NGLs. We are experiencing positive, encouraging trends in commercial activity that we expect will provide further growth in our business."

Processed gas volumes averaged 380,546 MMBtu/d during the three month period ended September 30, 2014, an increase of 61% compared to 236,991 MMBtu/d during the same period in the prior year. Fractionated NGLs during the three month period ended September 30, 2014 averaged 20,082 barrels per day, an increase of 57% compared to 12,808 barrels per day for the same period in the prior year.

Biegler added: "Our processed gas volumes increased consistently throughout the quarter. Processed gas volumes for the month of September averaged nearly 446,000 MMBtu/d. And October processed gas volumes increased above September levels, which we believe is a pattern that we will see continue during the fourth quarter."

Capital Expenditures

Growth capital expenditures for the nine month period ended September 30, 2014 included spending for the Webb Pipeline and totaled $81.8 million, compared to $84.1 million for the same period in the prior year. Southcross expects that growth capital expenditures for the full year 2014 will be in the range of $100 million to $120 million.