Enterprise Products Partners L.P.

SEC Filings

GULFTERRA ENERGY PARTNERS L P filed this Form 10-Q on 05/15/1996
Entire Document
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1998, the Partnership has the option to exchange the remaining liquidation
preference amount and accrued but unpaid dividends for shares of Tatham
Offshore's Series A Convertible Exchangeable Preferred Stock (the "Convertible
Exchangeable Preferred Stock") with an equivalent market value.  Further, the
Partnership has made an irrevocable offer to Tatham Offshore to sell all or any
portion of the Senior Preferred Stock to Tatham Offshore or its designee at a
price equal to $1,000 per share, plus interest thereon at 9% per annum less the
sum of any dividends paid thereon.  The Convertible Exchangeable Preferred
Stock is convertible into Tatham Offshore common stock based on a fraction, the
numerator of which is the liquidation preference value plus all accrued but
unpaid dividends and the denominator of which is based on the lowest average of
consecutive five day closing prices for Tatham Offshore's common stock between
December 26, 1995 and July 1, 1996 (the "Trading Reference Price").  The
current Trading Reference Price is $0.65 per share.  In addition, the sum of
$7.5 million was added to the Payout Amount under the Purchase and Sale
Agreement.  By adding $7.5 million to the Payout Amount, the Partnership is
entitled to an additional $7.5 million plus interest at the rate of 15% per
annum from revenue attributable to the Assigned Properties prior to reconveying
any interest in the Assigned Properties to Tatham Offshore. Tatham Offshore
waived its 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.

Oil and gas sales.  The Partnership has agreed to sell all of its oil and gas
production to Offshore Gas Marketing, Inc.  ("Offshore Marketing"), an
affiliate of the Partnership, on a month to month basis.  The agreement with
Offshore Marketing provides for marketing fees equal to 2% of the sales value
of crude oil and condensate and $0.015 per dekatherm of natural gas for selling
the Partnership's production.  During the three months ended March 31, 1996,
substantially all of the Partnership's oil and gas sales were derived from
sales to Offshore Marketing.

Other.  In connection with the formation of POPCO, Texaco Trading and Poseidon
LLC have agreed to cause POPCO to enter into certain additional agreements with
an Operating Company of the Partnership to provide for use by POPCO of certain
pipelines and platforms owned by the Operating Company for fees which shall
consist of a monthly rental fee of $100,000 per month for a minimum of six
months and reimbursement of certain actual capital expenditures not to exceed
$2,000,000 incurred in readying one of the platforms for use.

Poseidon LLC managed the construction and installation of the initial 117 mile
segment of the Poseidon Oil Pipeline, which was placed in service in April
1996, and Texaco Trading will manage the construction and installation of the
remaining pipelines and facilities comprising the Poseidon Oil Pipeline. Each
of Poseidon LLC and Texaco Trading will earn a performance fee of $1,400,000
for managing the construction of a portion of the Poseidon Oil Pipeline which
fee may be adjusted if either party manages the construction of any additional
facilities.  Through March 31, 1996, Poseidon LLC has received $1,330,000 in
performance fees from POPCO.