Operating approximately 3,500 miles of natural gas, NGL, and oil pipelines as well as other midstream infrastructure, Crosstex Energy (NASDAQ:XTEX) can be seen as a play on the entire spectrum of energy production in the U.S. However, the firm may have another ace up its sleeve: wastewater disposal.
The fracking process creates a lot of wastewater that needs to be collected and disposed of properly. Crosstex is one of the largest oilfield brine disposal companies Ohio River Valley area and provides brine disposal services in Ohio, West Virginia and Pennsylvania — i.e. the Marcellus and Utica shales.
XTEX has continued to drill and add new wastewater disposal wells in the area. This focus on brine disposal will help provide growth in the firm’s juicy distribution.
Not that it needs the help. Since 2010, XTEX has managed to grow its distribution by 13.5% a year. Crosstex currently yields 6.8%.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.