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>   10
             LEVIATHAN GAS PIPELINE PARTNERS, L.P. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                  (UNAUDITED)




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 (discussed below) was amended to provide for issuance of the
$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 with a syndicate of commercial banks
providing for up to $220.0 million of available credit in the form of a $145.0
million revolving credit facility and a $75.0 million term loan facility.  The
Partnership incurred additional debt issue costs related to the amended and
restated credit facility of $1.5 million 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 under the term facility and
$102.5 million under the revolving credit facility.  In addition, the $40.0
million Letter of Credit, which was outstanding under the revolving credit
facility at March 31, 1996, was canceled in May 1996.  For the three months
ended March 31, 1996, interest expense related to the Partnership Credit
Facility totaled $0.6 million, which included commitment fees and amortization
of debt issue costs of $0.2 million.  Additional interest expense incurred on
the Partnership Credit Facility of $2.3 million was capitalized in connection
with construction projects in progress during the period.  As of May 10, 1996,
borrowings totaled $75.0 million under the term facility and $112.0 million
under the revolving credit facility.  There are no letters of credit currently
outstanding under the revolving credit facility.

NOTE 6 -- RELATED PARTY TRANSACTIONS:

Management fees.  For three months ended March 31, 1996, Leviathan charged the
Partnership $1.5 million pursuant to the Partnership Agreement which provides
for reimbursement of expenses Leviathan incurs as general partner of the
Partnership, including reimbursement of expenses incurred by DeepTech in
providing management services to Leviathan and the Partnership.  In addition,
Leviathan charged the Partnership $0.8 million to reimburse DeepTech for
certain tax liabilities.

Transportation and platform access agreements.  Tatham Offshore was obligated
to make demand charge payments to the Partnership pursuant to certain
transportation agreements.  Under these agreements for the year ending December
31, 1996, Tatham Offshore was obligated to pay $8.1 million in aggregate demand
charges.  In addition to the demand charges, Tatham Offshore is obligated to
pay commodity charges, based on the volume of oil and gas transported or
processed, under these agreements.  Also, for the year ending December 31,
1996, Tatham Offshore is obligated to pay $1.6 million in platform access fees.
Production problems at Ship Shoal Block 331 and reduced oil production from the
Ewing Bank 914 #2 well have affected Tatham Offshore's ability to pay the
demand charge obligations under these agreements.

Effective February 1, 1996, the Partnership agreed to release Tatham Offshore
from all remaining demand charge payments under the transportation agreements,
a total of $17.8 million.  Under these agreements, the Partnership was entitled
to receive demand charges of $8.1 million in 1996, $6.0 million in 1997, $3.0
million in 1998 and $0.7 million in 1999.  Tatham Offshore remains obligated to
pay the commodity charges under these agreements as well as all platform access
and processing fees associated with the Viosca Knoll Block 817 lease.  In
exchange, the Partnership received 7,500 shares of Tatham Offshore senior
preferred stock (the "Senior Preferred Stock"), which is presented on the
accompanying consolidated balance sheet at March 31, 1996 as investment in
affiliate.  Each share of the Senior Preferred Stock has a liquidation
preference of $1,000 per share, is senior in liquidation preference to all
other classes of Tatham Offshore stock and has a 9% cumulative dividend,
payable quarterly.  At anytime on or after September 30,





                                      10