LEVIATHAN PIPELINE PARTNERS, L.P. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (continued)
and condensate and $0.015 per dekatherm of natural gas for selling the
Partnership's production. During the six months ended June 30, 1996,
substantially all of the Partnership's oil and gas sales were derived from
sales to Offshore Marketing.
Other. POPCO has entered 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 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 is managing 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 June 30, 1996, Poseidon LLC has received $1,330,000 in
performance fees from POPCO.
NOTE 7 -- CASH DISTRIBUTIONS:
On January 22, 1996, the Partnership declared a cash distribution of $0.60 per
Preference and Common Unit for the period from October 1, 1995 through December
31, 1995. This distribution was paid on February 14, 1996 to Unitholders of
record as of January 31, 1996.
On March 26, 1996, the Partnership declared a cash distribution of $0.65 per
Preference and Common Unit for the period from January 1, 1996 through March
31, 1996. This distribution was paid on May 15, 1996 to Unitholders of record
as of April 30, 1996.
On July 18, 1996, the Partnership declared a cash distribution of $0.70 per
Preference and Common Unit for the period from April 1, 1996 through June 30,
1996. This distribution will be paid on August 14, 1996 to Unitholders of
record as of July 31, 1996.
NOTE 8 -- SUBSEQUENT EVENTS:
On July 8, 1996, the Partnership and affiliates of Marathon and Shell Oil
Company ("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.