Gross margin in Q3 2007 was $100.1 million, up 34% compared to $74.8 million in Q3 2006. Gross margin from the midstream segment rose 40% to $85.7 million in Q3 2007, versus gross margin of $61.0 million in Q3 2006.
The company said that the increase is due to higher system throughput from continued expansion of gathering and transportation systems in the Barnett Shale and system expansion projects on its Crosstex LIG system, as well as higher processing margins during the third quarter of 2007.
Operating expenses were $32.4 million in the third quarter of 2007, compared to $28.1 million in the third quarter of 2006. The increase was related to expansion of gathering assets in the Barnett Shale in north Texas and the completion of the Red River Lateral in April 2007.
Barry Davis, president and CEO of Crosstex, said: We are aggressively pushing ahead with our growth strategy. Our record third quarter results demonstrate our ability to execute on our growth plans and highlight that our suite of assets and leadership team is well positioned to continue to generate solid performance.
Our core north Texas area continued its rapid growth and other previously announced projects, including the Red River Lateral in north Louisiana and the St James interconnect, expanded much needed capacity to our Crosstex LIG system, increased throughput and added new markets for our customers.
