Enterprise Products Partners L.P.

SEC Filings

10-Q
GULFTERRA ENERGY PARTNERS L P filed this Form 10-Q on 05/15/1996
Entire Document
 
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million barrels of proved oil reserves and 60.6 Bcf of proved gas reserves, net
to Flextrend Development, as of December 31, 1995.  The Viosca Knoll Block 817
lease is currently producing a total of approximately 90 million cubic feet
("MMcf") of gas per day from three wells, when platform drilling activities
permit.  The well deliverability from the Viosca Knoll 817 project is in excess
of 90 MMcf per day but is limited to such amount by the production equipment
currently located on the production platform. In addition, the Partnership has
drilled and is in the process of placing on production two wells on the Garden
Banks Block 72 lease and is in the process of completing and placing on
production an existing well on Garden Banks Block 117.

The Partnership owns an overriding royalty interest in the six-lease block
Ewing Bank 915 Unit which is operated by Tatham Offshore, as well as certain
other minority interests in oil and gas leases which are not material to the
business of the Partnership.  The Partnership also owns a 50% interest in West
Cameron Dehydration Company, L.L.C., a Delaware limited liability company
("West Cameron Dehy"), which owns a dehydration facility located at the
terminus of the Stingray pipeline, onshore Louisiana.

Flextrend Development accounts for its oil and gas exploration and production
activities using the successful efforts method of accounting.  Under this
method, costs of successful exploratory wells, development wells and
acquisitions of mineral leasehold interests are capitalized. Production,
exploratory dry hole and other exploration costs, including geological and
geophysical costs and delay rentals, are expensed as incurred. Unproved
properties are assessed periodically and any impairment in value is recognized
currently as depreciation, depletion, amortization and impairment expense.

RESULTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 1996 COMPARED WITH THREE MONTHS ENDED MARCH 31,
1995

Total revenue for the three months ended March 31, 1996 was $19.6 million as
compared with $8.5 million for the three months ended March 31, 1995.  Revenue
from transportation services totaled $4.8 million for the three months ended
March 31, 1996 as compared with $5.4 million for the three months ended March
31, 1995.  The decrease in transportation revenue of $0.6 million was comprised
primarily of (i) an $0.7 million increase from the Green Canyon system
attributable to the connection of a new gas field located in Green Canyon Block
136 to the system and (ii) a decrease of $1.3 million attributable to decreases
in throughput on the LOGS, Manta Ray, Tarpon and Ewing Bank systems due to
normal production decline from the wells attached to such systems and the
restructuring of the demand charges payable to Ewing Bank and LOGS from Tatham
Offshore.  Revenue from the Partnership's equity interest in Stingray, HIOS,
UTOS,  Viosca Knoll, POPCO and West Cameron Dehy (the "Joint Venture
Companies") totaled $4.7 million for the three months ended March 31, 1996 as
compared with $2.9 million for the three months ended March 31, 1995.  The
increase of $1.8 million in revenue from the Partnership's equity interest in
the Joint Venture Companies primarily reflects increases of (i) $0.8 million
from Viosca Knoll as a result of increased throughput and (ii) $1.0 million
from HIOS as a result of higher throughputs and lower operating costs.  Revenue
from oil and gas sales totaled $9.3 million for the three months ended March
31, 1996 as compared with $0.2 million for the three months ended March 31,
1995.  The increase in oil and gas sales revenue is attributable to the
initiation of gas production from the Partnership's Viosca Knoll Block 817
lease in December 1995.  During the three months ended March 31, 1996, the
Partnership sold 3,044 MMcf of gas and 10,588 barrels of oil at an average
prices of $3.00 per thousand cubic feet and $16.71 per barrel, respectively.
Revenue related to the Partnership's VK 817 Platform, which was placed in
service during the third quarter of 1995, totaled $0.8 million for the three
months ended March 31, 1996.

Total costs and expenses for the three months ended March 31, 1996 totaled $8.5
million as compared with $4.7 million for the three months ended March 31,
1995.  The $3.8 million increase in costs and expenses





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