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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               LEVIATHAN PIPELINE PARTNERS, L.P. AND SUBSIDIARIES

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)
                                  (unaudited)

NOTE 5 -- CREDIT FACILITY:

On October 12, 1995, Flextrend Development and a syndicate of commercial
lenders entered into the Flextrend Credit Facility.  The Flextrend Credit
Facility provided for borrowings of up to $32.0 million at any time prior to
March 31, 1996.  As discussed below, all borrowings outstanding under the
Flextrend Credit Facility were repaid on March 26, 1996 from proceeds obtained
under the Partnership Credit Facility, as amended.  For the six months ended
June 30, 1996, interest and amortization of debt issue costs related to the
Flextrend Credit Facility totaled $2.5 million, all of which was capitalized in
connection with drilling activities in progress during the period.

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
revolving credit facility has an initial maturity of three years, which
maturity can be extended in one-year increments, but not beyond March 31, 2001.
The $75.0 million term loan facility has a final maturity of March 31, 2001.
The first principal payment, in an amount of $2.0 million, is due on December
31, 1996. Subsequent payments are to be made quarterly in the amount of $4.3
million.  The proceeds of the term loan were used to repay all of the
indebtedness incurred under the Flextrend Credit Facility and to repay a
portion of the debt outstanding under the former revolving credit facility.
All amounts advanced under the revolving credit facility and the term loan
facility will accrue interest at a variable rate selected by the Partnership
and determined by reference to the reserve-adjusted London interbank offer
rate, the average certificate of deposit rate or the prime rate.  The current
average interest rate on both revolving credit and term loans is 7.2% per
annum.  A commitment fee is charged on the unused and available to be borrowed
portion of the revolving credit facility.  This fee varies between 0.25% and
0.375% per annum and is currently 0.375% per annum.  All amounts due under the
Partnership Credit Facility are guaranteed by Leviathan and each of the
Operating Companies and Tarpon, and are secured by Leviathan's 1% general
partner interest in the Partnership, all of Leviathan's and the Partnership's
equity interests in the Operating Companies and Tarpon and most of the
equipment, negotiable instruments and inventory and other personal property of
the Operating Companies and Tarpon.  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 five- year
remaining life of the credit facility.  As of June 30, 1996, borrowings totaled
$75.0 million under the term facility and $118.0 million under the revolving
credit facility.  For the six months ended June 30, 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 and amortization of debt issue costs related to the
Partnership Credit Facility of $6.0 million was capitalized in connection with
construction projects and drilling activities in progress during the period.
As of August 12, 1996, borrowings totaled $75.0 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.

NOTE 6 -- RELATED PARTY TRANSACTIONS:

Management fees.  For the six months ended June 30, 1996, Leviathan charged the
Partnership $3.1 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,
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.  During the six months ended
June 30, 1996, Leviathan charged the Partnership $1.0 million to compensate
DeepTech for





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