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Crosstex Energy, L.P. (XTEX)

Business Update Call

October 2, 2008 11:00 am ET

Executives

Crystal S. Bell - Investor Relations Specialist

Barry E. Davis - Chairman of the Board, President & Chief Executive Officer

William W. Davis - Chief Financial Officer & Executive Vice President

Robert S. Purgason - Chief Operating Officer & Executive Vice President

Analysts

Sharon Lui - Wachovia Capital Markets

Darren Horowitz - Raymond James

Analyst for [Joshua Slocum - Keystone Capital Management]

Ryan Greener - Harvest Fund Advisors

[James Gempal - Hyatt]

Daniel Moore - Aquamarine Capital

[Alan Binella - White River Partners]

Presentation

Operator

Welcome to the Crosstex Energy conference call. (Operator Instructions) I would now like to turn the presentation over to your host for today’s call, Crystal Bell of Crosstex Energy.

Crystal S. Bell

On the call today are Barry Davis, Chairman, President and Chief Executive Officer, Bill Davis, Executive Vice President and Chief Financial Officer, and Bob Purgason, Executive Vice President and Chief Operating Officer. Barry will update 2008 guidance, discuss the impact of recent South Coast hurricanes, and provide initial indications of 2009 financing plans. Then Barry, Bill and Bob will answer your questions.

If you want to listen to a recording of today’s calls, you have 30 days to access the replay as found on our webcast on our website at www.crosstexenergy.com.

As we begin this morning’s call, I’ll remind you that any statements that might include our expectations or predictions should be considered forward-looking statements within the meaning of the federal securities laws. These statements are based on certain assumptions, management’s experience and perception of historical trends, current conditions, expected future developments, and other factors we believe are appropriate in the circumstances. These statements include but are not limited to statements with respect to future financial performance and access to capital. Such statements are subject to a number of assumptions, risks and uncertainties many of which are beyond our control which may cause our actual results to differ materially from those implied or expressed by the forward-looking statements. Factors that could cause actual results to differ materially from their expectations are included in the periodic reports we filed with the SEC. We encourage you to carefully review and consider the cautionary statements and other disclosures made in those filings, specifically those under the heading Risk Factors. We undertake no obligation to publicly update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

I will now turn the call over to Barry Davis.

Barry E. Davis

In light of the current turmoil in the financial markets and the recent hurricanes that have affected Crosstex’s operations, we’ve received phone calls from many of you. We’re holding this call to ensure that each of you are adequately informed of what these events mean to Crosstex and to fill any gaps of information that may exist. We will update you on the latest information we have regarding the impact of the recent hurricanes, we’ll give you our outlook for the remainder of 2008 and our plans for 2009 including financing our growth projects. We want you to understand our business plan going forward in these unprecedented times.

We think Wall Street is doing a poor job of distinguishing between companies that need capital to execute a growth plan versus those that need capital to survive. We are clearly in the former group.

The fundamentals of our business are strong. We have great assets that are necessary to serve the nation’s energy needs. These assets are in strategic locations providing key access to key producing regions such as the Barnett Shale and the emerging Haynesville plays. These assets are characterized by solid and long-term sustainable cash flows and they are run by dedicated and professional employee groups.

First of all I want to address our distributions and dividends. We expect to pay out at least $2.51 to our unit holders which is our current distribution rate. We expect to do this with approximately one time coverage for the year. This will in turn allow us to pay at least the $1.50 dividend to our XTXI shareholders.

Secondly regarding our near-term liquidity, as stated in our last call we currently have over $200 million available under our revolver and we expect to end the year with at least that much available. Under our current plan we would still have $100 million of availability under our revolver at the end of 2009 even without accessing the capital markets during this period. Our revolver is in place currently through the middle of 2011.

Next I’ll address the financing of our already-announced and future growth opportunities. Given the uncertainties of the capital markets we’re pursuing a backup plan. Under this plan we assume a continuation of the current gridlock in the markets for an extended period and that we’re not able to access via traditional MLP debt or equity markets from now through the end of 2009.

We are working with a number of strategic and financial investors on alternative sources of capital for our projects and we believe the capital will be available to fund our projects from these non-traditional sources. While we are still working on the details of these alternative financings, because of our asset position we have lots of attractive growth opportunities and we are confident that capital is available for good projects to allow us to continue to provide important and growing services to our customers.

Turning back to our distributions, we still expect to grow our distribution in 2009 and beyond. This growth will first come from the cash flows from our existing asset base which are still growing. On future asset growth the rate of distribution increase will be impacted by the financing available. If markets for our traditional financing return, we expect to achieve growth consistent with what we’ve previously communicated.

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