Enterprise Products Partners L.P.

SEC Filings

GULFTERRA ENERGY PARTNERS L P filed this Form 10-Q on 11/12/1996
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Tatham Offshore was obligated to make demand charge payments to the Partnership
pursuant to certain transportation agreements.  Production problems at Ship
Shoal Block 331 and reduced oil production from the Ewing Bank 914 #2 well have
adversely affected Tatham Offshore's ability to pay demand charges under these
agreements.  Effective February 1, 1996, the Partnership agreed to release
Tatham Offshore from all remaining demand charge payments under certain
transportation agreements, a total of $17.8 million. Under these agreements,
the Partnership was entitled to receive demand charges of $8.1 million in 1996,
$6.0 million in 1997, $3.0 million in 1998 and $0.7 million in 1999.  In
exchange, the Partnership received 7,500 shares of Tatham Offshore Senior
Preferred Stock.  Each share of the Senior Preferred Stock has a liquidation
preference of $1,000 per share, is senior in liquidation preference to all
other classes of Tatham Offshore stock and has a 9% cumulative dividend,
payable quarterly.  Commencing on October 1, 1998 and for a period of 90 days
thereafter, the Partnership has the option to exchange the remaining
liquidation preference amount and accrued but unpaid dividends for shares of
Tatham Offshore's Convertible Exchangeable Preferred Stock with an equivalent
market value.  Further, the Partnership has made an irrevocable offer to Tatham
Offshore to sell all or any portion of the Senior Preferred Stock to Tatham
Offshore or its designee at a price equal to $1,000 per share, plus interest
thereon at 9% per annum less the sum of any dividends paid thereon.  The
Convertible Exchangeable Preferred Stock is convertible into Tatham Offshore
common stock based on a fraction, the numerator of which is the liquidation
preference value plus all accrued but unpaid dividends and the denominator of
which is $0.653 per share. In addition, the sum of $7.5 million was added to
the Payout Amount under the Purchase and Sale Agreement. By adding $7.5 million
to the Payout Amount, the Partnership is entitled to an additional $7.5 million
plus interest at the rate of 15% per annum from revenue attributable to the
Assigned Properties prior to reconveying any interest in the Assigned
Properties to Tatham Offshore.  Tatham Offshore waived its remaining option to
prepay the then-existing Payout Amount and receive a reassignment of its
working interests.  Tatham Offshore and the Partnership also agreed that in the
event Tatham Offshore furnishes the Partnership with a financing commitment
from a lender with a credit rating of BBB- or better covering 100% of the then
outstanding Payout Amount, the interest rate utilized to compute the Payout
Amount shall be adjusted from and after the date of such commitment to the
interest rate specified in such commitment, whether utilized or not.  Tatham
Offshore also agreed to grant the Partnership the right to utilize the Ship
Shoal Block 331 platform and related facilities at a rental rate of $1.00 per
annum for such period as the platform is owned by Tatham Offshore and located
on Ship Shoal Block 331, provided such use does not interfere with lease
operations or other activities of Tatham Offshore.  In addition, Tatham
Offshore granted the Partnership a right of first refusal relative to a sale of
the platform.  Tatham Offshore remains obligated to pay the commodity charges
under these agreements as well as all platform access and processing fees
associated with the Viosca Knoll Block 817 lease.  For the year ending December
31, 1996, Tatham Offshore is obligated to pay $1.6 million in platform access

The Partnership Credit Facility, as amended and restated on March 26, 1996, is
a revolving and term credit facility providing for up to $220.0 million of
available credit in the form of a $145.0 million revolving credit facility and
$75.0 million term loan facility.  Proceeds from the revolving credit facility
are available to the Partnership for general partnership purposes, including
financing of capital expenditures, for working capital, and subject to certain
limitations, for paying the Minimum Quarterly Distribution, as defined in the
Partnership Agreement.  The revolving credit facility can also be utilized to
issue letters of credit as may be required from time to time.  As of September
30, 1996, borrowings totaled $75.0 million under the term facility and $138.0
million under the revolving credit facility.  As of November 12, 1996,
borrowings totaled $75.0 million under the term facility and $141.5 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