Enterprise Products Partners L.P.

SEC Filings

10-Q
GULFTERRA ENERGY PARTNERS L P filed this Form 10-Q on 11/12/1996
Entire Document
 
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Knoll Block 817 project is currently producing an aggregate of approximately
100 million cubic feet ("MMcf") of gas per day.  In addition, the Partnership
has placed on production four wells on the Garden Banks Block 72 lease and one
well on Garden Banks Block 117.  The Garden Banks Block 72 wells, which began
producing in May 1996, are currently producing an average of 4,100 barrels of
oil and 14.5 MMcf of gas per day.  The Partnership is in the process of
drilling a fifth well on Garden Banks Block 72. The Garden Banks Block 117 #1
well, which began producing in July 1996, is currently producing an average of
2,100 barrels of oil, 3.5 MMcf of gas and 3,100 barrels of water per day.  The
Partnership is currently drilling a second well on the Garden Banks Block 117
lease.

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 September 30, 1996 Compared with Three Months Ended
September 30, 1995

Total revenue for the three months ended September 30, 1996 was $24.2 million
as compared with $12.3 million for the three months ended September 30, 1995.
Revenue from transportation services totaled $5.4 million for the three months
ended September 30, 1996 as compared with $4.7 million for the three months
ended September 30, 1995. The increase in transportation revenue of $0.7
million is a result of an increase of $1.1 million from the Green Canyon and
Manta Ray systems attributable to the connection of a new field located in
Green Canyon Block 136 and the use of a portion of one of the lines of the
Manta Ray System by POPCO 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 $5.8 million for the three months ended September
30, 1996 as compared with $7.0 million for the three months ended September 30,
1995.  The decrease of $1.2 million in revenue from the Partnership's equity
interest in the Joint Venture Companies primarily reflects decreases of $2.8
million related to HIOS and UTOS as a result of lower rates during 1996 offset
by increases of $0.8 million from Stingray and Viosca Knoll as a result of
increased throughput, $0.6 million from POPCO, which was placed in service in
April 1996, and $0.2 million from West Cameron Dehy, which was placed in
service in November 1995. Revenue from oil and gas sales totaled $12.1 million
for the three months ended September 30, 1996 as compared with $0.2 million for
the three months ended September 30, 1995. The increase in oil and gas sales of
$11.9 million is primarily attributable to the initiation of production from
the Partnership's Viosca Knoll Block 817 lease in December 1995, the Garden
Banks Block 72 lease in May 1996 and the Garden Banks Block 117 lease in July
1996.  During the three months ended September 30, 1996, the Partnership sold
4,166 MMcf of gas and 168,766 barrels of oil at average prices of $1.93 per
thousand cubic feet ("Mcf") and $22.25 per barrel, respectively.  Revenue
related to the Partnership's Viosca Knoll Block 817 Platform, which was placed
in service during the third quarter of 1995, totaled $1.0 million for the three





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