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
 
<PAGE>   19




approximately $55.0 million to complete Phase II of the system, will be funded
by borrowings under the POPCO Credit Facility.

The Partnership anticipates that capital expenditures in connection with the
maintenance and enhancement of the service capabilities of the Ewing Bank,
LOGS, Green Canyon and Manta Ray systems will aggregate approximately $0.5
million per year although the actual level of these capital expenditures may
change from time to time for many reasons, some of which may be beyond the
control of the Partnership.  The Partnership anticipates that its capital
expenditures for 1996 will relate to continuing construction and drilling
activities on projects currently in progress and the Partnership anticipates
funding such costs primarily with available cash flow and borrowings under the
Partnership Credit Facility.

In connection with the closing of the second primary offering of Preference
Units in June 1994, Leviathan amended its management agreement with DeepTech
effective July 1, 1994 in consideration for the increase in management services
associated with the planned expansion of the Partnership's facilities and to
more accurately provide for the reimbursement of expenses incurred by DeepTech
in providing management services to Leviathan and the Partnership.  As amended,
the management agreement required Leviathan to pay DeepTech a fee of $2.0
million per year, plus 40% of DeepTech's unreimbursed selling, general and
administrative expenses, payable monthly.  In addition, effective July 1, 1994,
the management agreement requires a payment by Leviathan to compensate DeepTech
for certain tax liabilities resulting from, among other things, additional
taxable income allocated to Leviathan due to (i) the issuance of additional
Preference Units (including the sale of the Preference Units by the Partnership
pursuant to the secondary offering) and (ii) the investment of such proceeds in
additional acquisitions or construction projects.  Effective November 1, 1995,
primarily as a result of the increased activities of Flextrend Development,
Leviathan again amended its management agreement with DeepTech to provide for
an annual management fee of 45.3% of DeepTech's overhead.  Pursuant to the
Partnership Agreement, Leviathan, as general partner, is entitled to
reimbursement by the Partnership of expenses incurred by it while acting on
behalf of the Partnership, including payments made by Leviathan to DeepTech
pursuant to the management agreement.  During the three months ended March 31,
1996, Leviathan charged the Partnership $1.5 million as reimbursement for
services rendered on the Partnership's behalf and $0.8 million to compensate
DeepTech for additional taxable income allocated to Leviathan.  The management
agreement has an initial term expiring on June 30, 1997, and may thereafter be
terminated on 90 days' notice by either party.





                                      19