FORM 4
o Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).

(Print or Type Responses)		   UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF
CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Section 17(a) of the Public Utility Holding Company Act of 1935 or
Section 30(h) of the Investment Company Act of 1940		  
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1.   Name and Address of Reporting Person*   2.   Issuer Name and Ticker or Trading Symbol   6.   Relationship of Reporting Person(s) to Issuer
(Check all applicable)
    Wales   James   R.       Crosstex Energy, L.P. (XTEX)                Director            10% Owner
 
           
    (Last)   (First)   (Middle)   3.   I.R.S. Identification Number of Reporting Person, if an entity (voluntary)   4.   Statement for
Month/Day/Year		         X(1)   Officer
        (give title below)		            Other
        (specify below)
    2501 Cedar Springs, Suite 600               12/17/02   Executive Vice President—Midstream Division
 
 
     
(Street)           5.   If Amendment, Date of Original (Month/Day/Year)   7.   Individual or Joint/Group Filing
(Check Applicable Line)
    X     Form filed by One Reporting Person
             Form filed by More than
    Dallas   TX   75201                                   One Reporting Person
    (City)   (State)   (Zip)                            
                Table I — Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.   Title of Security
(Instr. 3)		   2.   Transaction Date   2A.   Deemed Execution Date, if any   3.   Transaction Code
(Instr. 8)		   4.   Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5)		   5.   Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4)		   6.   Ownership Form: Direct (D) or Indirect (I)
(Instr. 4)		   7.   Nature of Indirect Beneficial Ownership
(Instr. 4)
            (Month/Day/Year)   (Month/Day/Year)  
                       
                            Code   V       Amount   (A) or (D)   Price                        
    Common units representing limited partnership interests                                                   11,665(2)       I       By Crosstex Energy Holdings Inc.(1)
                                                                         
                                                                         
                                                                         
                                                                         
                                                                         
                                                                         
FORM 4 (Continued)   Table II — Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1.   Title of Derivative Security
(Instr. 3)		   2.   Conversion or Exercise Price of Derivative Security   3.   Transaction Date
(Month/Day/Year)		   3A.   Deemed Execution Date, if any
(Month/Day/Year)		   4.   Transaction Code
(Instr. 8)		   5.   Number of Derivative Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4, and 5)		   6.   Date Exercisable and Expiration Date (Month/Day/Year)
                               
 
                                    Code   V       (A)   (D)       Date
Exercisable		   Expiration Date
    Subordinated units representing limited partnership interests                                                            
    Employee Stock Option (right to buy)       $20.00       12/17/02               A           20,000           (4)   12/17/12
                                                                 
                                                                 
                                                                 
                                                                 
                                                                 
7.   Title and Amount of Underlying Securities
(Instr. 3 and 4)		   8.   Price of Derivative Security
(Instr. 5)		   9.   Number of Derivative Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 4)		   10.   Ownership Form of Derivative Securities: Direct (D) or Indirect (I) (Instr. 4)   11.   Nature of Indirect Beneficial Ownership
(Instr. 4)
   
                               
    Title   Amount or Number of Shares                                
    Common units representing limited partnership interests                   163,345(3)       I       By Crosstex Energy Holdings Inc.(1)
    Common units representing limited partnership interests   20,000               20,000       D        
                                         
                                         
                                         
                                         
                                         

Explanation of Responses:

(1)
James R. Wales is the Executive Vice President-Midstream Division of Crosstex Energy GP, LLC, the general partner of Crosstex Energy, L.P., which is the general partner of the Issuer. Mr. Wales beneficially owns securities in Crosstex Energy Holdings Inc., representing approximately 3.5% of the voting power thereof. Crosstex Energy Holdings Inc., directly and indirectly, owns the general partner of the Issuer, which owns a 2% general partner interest in the Issuer. In addition, Crosstex Energy Holdings Inc. owns 333,000 of the Issuer's common units representing limited partner interests and 4,667,000 of the Issuer's subordinated units representing limited partnership interests. As a result, James R. Wales may be deemed to be the beneficial owner of a portion of the common units and subordinated units owned by Crosstex Energy Holdings Inc.
(2)
The common units representing limited partnership interests and subordinated units representing limited partnership interests were issued to Crosstex Energy Holdings Inc. upon the closing of the Issuer's initial public offering December 17, 2002.
(3)
The subordination period will end once the financial tests are met in the Issuer's partnership agreement. When the subordination period ends, each remaining subordinated unit will convert into one common unit.
(4)
This option vests in three equal installments on December 17, 2003, 2004 and 2005.

/s/ James R. Wales   12/19/02
**Signature of Reporting Person		  
Date

Reminder:
 
Report on a separate line for each class of securities beneficially owned directly or indirectly.

*
 
If the form is filed by more than one reporting person, see Instruction 4(b)(v).

**
 
Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).

Note:
 
File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.

http://www.sec.gov/divisions/corpfin/forms/form4.htm
Last update: 09/05/2002