Enterprise Products Partners L.P.

SEC Filings

GULFTERRA ENERGY PARTNERS L P filed this Form 10-Q on 05/15/1996
Entire Document
<PAGE>   17

remaining option to prepay the then existing Payout Amount and receive a
reassignment of its working interests.  Tatham Offshore and the Partnership
also agreed that in the event Tatham Offshore furnishes the Partnership with a
financing commitment from a lender with a credit rating of BBB- or better
covering 100% of the then outstanding Payout Amount, the interest rate utilized
to compute the Payout Amount shall be adjusted from and after the date of such
commitment to the interest rate specified in such commitment, whether utilized
or not.  Tatham Offshore also agreed to grant the Partnership the right to
utilize the Ship Shoal Block 331 platform and related facilities at a rental
rate of $1.00 per annum for such period as the platform is owned by Tatham
Offshore and located on Ship Shoal Block 331, provided such use, at the time
proposed, does not interfere with lease operations or other activities of
Tatham Offshore.  In addition, Tatham Offshore granted the Partnership a right
of first refusal relative to a sale of the platform.

On October 12, 1995, Flextrend Development and a syndicate of commercial
lenders entered into the Flextrend Credit Facility.  The Flextrend Credit
Facility provided for borrowings of up to $32.0 million at any time prior to
March 31, 1996.  As discussed below, all borrowings outstanding under the
Flextrend Credit Facility were repaid on March 26, 1996 from proceeds obtained
under the Partnership Credit Facility, as amended.  For the three months ended
March 31, 1996, interest and amortization of debt issue costs totaled $2.5
million, all of which was capitalized in connection with drilling activities in
progress during the period.

In February 1996, in connection with the formation of POPCO, the Partnership
Credit Facility was amended to provide for issuance of a $40.0 million Letter
of Credit, to terminate $125.0 million previously available under the
Partnership Credit Facility as term loans related to the Poseidon Oil Pipeline
and to permit the Partnership to make capital contributions to POPCO.

The Partnership Credit Facility, as amended and restated on March 26, 1996, is
a revolving and term credit facility providing for up to $220.0 million of
available credit in the form of a $145.0 million revolving credit facility and
$75.0 million term loan facility.  The revolving credit facility has an initial
maturity of three years, which maturity can be extended in one-year increments,
but not beyond March 31, 2001. Proceeds from the revolving credit facility are
available to the Partnership for general partnership purposes, including
financing of capital expenditures, for working capital, and subject to certain
limitations, for paying the Minimum Quarterly Distribution, as defined in the
Partnership Agreement.  The revolving credit facility can also be utilized to
issue letters of credit as may be required from time to time.  The $40.0
million Letter of Credit issued in February 1996 was outstanding under the
revolving credit facility until it was canceled in May 1996.  The $75.0 million
term loan facility has a final maturity of March 31, 2001. The first principal
payment, in an amount of $2.0 million, is due on December 31, 1996. Subsequent
payments are to be made quarterly in the amount of $4.3 million.  The proceeds
of the term loan were used to repay all of the indebtedness incurred under the
Flextrend Credit Facility and to repay a portion of the debt outstanding under
the former revolving credit facility.  All amounts advanced under the revolving
credit facility and the term loan facility will accrue interest at a variable
rate selected by the Partnership and determined by reference to the
reserve-adjusted London interbank offer rate, the average certificate of
deposit rate or the prime rate.  The current average interest rate on both
revolving credit and term loans is 7.2% per annum.  A commitment fee is charged
on the unused and available to be borrowed portion of the revolving credit
facility.  This fee varies between 0.25% and 0.375% per annum and is currently
0.375% per annum.  All amounts due under the Partnership Credit Facility are
guaranteed by Leviathan and each of the Operating Companies and Tarpon, and are
secured by Leviathan's 1% general partner interest in the Partnership, all of
Leviathan's and the Partnership's equity interests in the Operating Companies
and Tarpon and most of the equipment, negotiable instruments and inventory and
other personal property of the Operating Companies and Tarpon.  The Partnership
incurred additional debt issue costs of $1.5 million related to the amended and
restated credit facility which have been capitalized and are being amortized
over the six-year remaining life of the credit facility.  As of March 31, 1996,
borrowings totaled $75.0 million