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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million under the term facility and $131.0 million under the revolving credit
facility.  There are no letters of credit currently outstanding under the
revolving credit facility.

Uses of Cash.  The Partnership's capital requirements consist primarily of (i)
quarterly distributions to holders of Preference Units and Common Units and to
Leviathan as general partner, (ii) expenditures for the maintenance of the
pipelines and related infrastructure and the construction of additional
pipelines and related facilities for the transportation and processing of gas
and oil in the Gulf, including the second phase of the Poseidon Oil Pipeline,
(iii) management fees and other operating expenses and (iv) debt service on its
outstanding debt.  In addition, Flextrend Development's future capital
requirements will consist of expenditures related to the continued development
of the Viosca Knoll Block 817, Garden Banks Block 72 and Garden Banks Block 117
leases.

For every full quarter since its inception, the Partnership has declared and
subsequently paid a cash distribution to holders of Preference Units and Common
Units in an amount equal to or exceeding the Minimum Quarterly Distribution of
$0.55 per Unit per quarter ($2.20 per Unit on an annualized basis). Commencing
in the third quarter of 1993, the Partnership increased the quarterly
distribution to $0.60 per Unit.  Beginning with the quarter ending March 31,
1996, the Partnership increased the quarterly distribution to $0.65 per Unit.
For the quarter ending June 30, 1996, the Partnership increased the quarterly
distribution to $0.70 per Unit.  This distribution will be paid on August 14,
1996 to Unitholders of record as of July 31, 1996.  At the current distribution
rate of $0.70 per Unit, the Partnership anticipates making quarterly
Partnership distributions of $8.8 million in respect of the Preference Units,
Common Units and general partner interest ($35.2 million on an annual basis).
The Partnership believes that it will be able to continue to pay at least the
current quarterly distribution of $0.70 per Preference Unit for the foreseeable
future.

In February 1996, Poseidon LLC and Texaco Trading formed POPCO to construct,
own and operate the Poseidon Oil Pipeline.  Pursuant to the terms of the
organizational documents, Poseidon LLC initially contributed assets, at net
book value, related to the construction of the initial phase of the Poseidon
Oil Pipeline as well as certain dedication agreements and Texaco Trading
initially contributed an equivalent amount of cash as well as its rights under
certain agreements.  The Partnership has fully funded its portion of the
capital requirements of POPCO for the construction of the first phase of the
Poseidon Oil Pipeline. In July 1996, Marathon joined POPCO by contributing its
interest in 58 miles of nearby crude oil pipelines and dedicating its portion
of oil reserves attached to such pipelines to the Poseidon Oil Pipeline for
transportation.  As a result, each of the Partnership and Texaco Trading now
owns a 36% interest in the joint venture and Marathon owns the remaining 28%
interest.  The Partnership anticipates that POPCO's future capital
requirements, including amounts necessary to complete the second phase of the
system, will be funded by borrowings under the POPCO Credit Facility.

On July 8, 1996, the Partnership and affiliates of Marathon and Shell announced
plans to build and operate an interstate natural gas pipeline system and a
connecting gathering system to serve growing production areas in the Green
Canyon area of the Gulf.  The total cost of the two systems, including the
Combined Manta Ray System currently owned by the Partnership, is approximately
$270.0 million.  The new jurisdictional interstate pipeline, named "Nautilus",
consists of a 30-inch line downstream from Ship Shoal Block 207 connecting to
the Marathon operated Burns Point Gas Plant and other area gas plants.  Upstream
of the Ship Shoal 207 terminal, the Combined Manta Ray System will be extended
into a broader gathering system that will serve shelf and deepwater production
around Ewing Bank Block 873 to the east and Green Canyon Block 65 to the west.
Marathon and Shell have significant deep water acreage positions in the area,
including the recently announced Troika field (Green Canyon Block 244), and will
provide the majority of the capital funding for the new construction. Leviathan
will provide some funding along with the contribution of Combined Manta Ray
System assets.





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