Enterprise Products Partners L.P.

SEC Filings

10-Q
GULFTERRA ENERGY PARTNERS L P filed this Form 10-Q on 08/13/1996
Entire Document
 
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The Partnership owns an interest in and is operator of three producing leases
in the Gulf which were acquired by the Partnership on June 30, 1995 from Tatham
Offshore.  The properties, which are subject to certain reversionary rights,
include a 75% working interest in Viosca Knoll Block 817, a 50% working
interest in Garden Banks Block 72 and a 50% working interest in Garden Banks
Block 117.  The Viosca Knoll Block 817 lease is currently producing a total of
approximately 90 million cubic feet ("MMcf") of gas per day, 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.  The
Partnership is currently taking steps to increase the total capacity of such
production equipment to approximately 140 MMcf per day.  Once such expansion
occurs, the Partnership intends to complete and place on production at least
three additional wells which it has already drilled and possibly a fourth well,
which it is currently drilling.  In addition, the Partnership has placed on
production two wells on the Garden Banks Block 72 lease and one well on Garden
Banks Block 117.  The Garden Banks Block 72 A-1 and A-2 wells, which began
producing in May 1996, are currently producing an average of 3,000 barrels of
oil and 6.0 MMcf of gas per day.  The Partnership has drilled a third well on
Garden Banks Block 72 and is in the process of drilling a fourth well.  The
Garden Banks Block 72 A-3 well will be completed and placed on production
following the completion of drilling activities on the Garden Banks Block 72
A-4 well.  The Garden Banks Block 117 #1 well, which began producing in July
1996, is currently producing an average of 5,400 barrels of oil and 9.7 MMcf of
gas per day.  The Partnership is in the process of drilling a second well on
the Garden Banks Block 117 lease which, if successful, the Partnership intends
to complete and place on production during the fourth quarter of 1996.

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.

The Partnership 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 JUNE 30, 1996 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1995

Total revenue for the three months ended June 30, 1996 was $18.6 million as
compared with $10.8 million for the three months ended June 30, 1995.  Revenue
from transportation services totaled $5.0 million for the three months ended
June 30, 1996 as compared with $4.8 million for the three months ended June 30,
1995. The increase in transportation revenue of $0.2 million is a result of an
increase of $0.6 million from the Green Canyon system attributable to the
connection of a new gas field located in Green Canyon Block 136 to the system
offset by a decrease of $0.4 million related to the Ewing Bank system due to
the restructuring of the demand charges payable to Ewing Bank 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 $4.1 million for the three months ended June 30, 1996 as compared with
$5.8 million for the three months ended June 30, 1995.  The decrease of $1.7
million in revenue from the Partnership's equity interest in the Joint Venture
Companies primarily reflects decreases





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