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
                                  (unaudited)

NOTE 1 -- ORGANIZATION AND BASIS OF PRESENTATION:

Leviathan Gas Pipeline Partners, L.P. (the "Partnership"), a publicly held
Delaware limited partnership formed in December 1992, is primarily engaged in
the gathering and transportation of natural gas and crude oil through its
pipeline systems located in the Gulf of Mexico (the "Gulf").  The Partnership's
assets include interests in (i) eight natural gas pipeline systems, (ii) a
crude oil pipeline system, (iii) five strategically located multi-purpose
platforms, (iv) three producing oil and gas properties, (v) an overriding
royalty interest and (vi) a dehydration facility.  The Partnership's operating
activities are conducted through twelve approximately 99%-owned limited
liability companies (collectively, the "Operating Companies") and Tarpon
Transmission Company ("Tarpon"), a 100%-owned Texas corporation.  Leviathan Gas
Pipeline Company ("Leviathan"), as general partner, owns the remaining interest
(approximately 1%) in each of the Operating Companies.

Leviathan, a Delaware corporation and wholly-owned subsidiary of Leviathan
Holdings Company ("Leviathan Holdings"), an 85%-owned subsidiary of DeepTech
International Inc. ("DeepTech"), was formed in February 1989 to purchase,
operate and expand offshore pipeline systems.  The remaining 15% of Leviathan
Holdings is principally owned by members of the management of DeepTech.
DeepTech also owns and controls several other operating subsidiaries which are
engaged in various oil and gas related activities.

The Partnership commenced operations on February 19, 1993, the date on which
Leviathan contributed to the Partnership substantially all of its assets and
operations in exchange for a 1% general partner interest in the Partnership, a
34.1% limited partner interest in the Partnership represented by 3,176,250
Common Units (the "Common Units") and an approximate 1% nonmanaging interest in
each of the Operating Companies.  In February 1993, the Partnership completed
an initial public offering of 6,037,500 Preference Units (the "Preference
Units" and together with the Common Units, the "Units").

In June 1994, the Partnership completed the public offering of an additional
3,000,000 Preference Units representing limited partner interests in the
Partnership.  As of June 30, 1996, all of the Preference Units of the
Partnership were held by the public, representing an effective limited partner
interest in the Partnership of 72.7%.  Leviathan, as owner of the Common Units,
its general partner interest and its nonmanaging interest in the Operating
Companies, owned the remaining effective interest in the Partnership of 27.3%.

The accompanying consolidated financial statements have been prepared without
audit pursuant to the rules and regulations of the Securities and Exchange
Commission.  Accordingly, the statements reflect all normal recurring
adjustments which are, in the opinion of management, necessary for a fair
statement of the results of operations for the period covered by such
statements. These interim financial statements should be read in conjunction
with the audited consolidated financial statements and notes thereto contained
in the Partnership's Annual Report on Form 10-K for the year ended December 31,
1995.

NOTE 2 -- OIL AND GAS PROPERTIES:

On June 30, 1995, Flextrend Development Company, L.L.C., ("Flextrend
Development"), an Operating Company, entered into a purchase and sale agreement
(the "Purchase and Sale Agreement") with Tatham Offshore, Inc. ("Tatham
Offshore"), an approximately 39%-owned affiliate of DeepTech.  Pursuant to the
Purchase and Sale Agreement, Flextrend Development acquired, subject to certain
reversionary interests, a 75% working interest in Viosca Knoll Block 817, a 50%
working interest in Garden Banks Block 72 and a





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