Enterprise Products Partners L.P.

SEC Filings

10-Q
GULFTERRA ENERGY PARTNERS L P filed this Form 10-Q on 08/09/2004
Entire Document
 
<PAGE>
 
     Additionally, in July 2004, we announced that Cameron Highway had executed
an agreement with Kerr-McGee for the dedication and movement of crude oil
production from the Constitution and Ticonderoga fields, along with other future
production from several undeveloped blocks in the south Green Canyon area of the
deepwater trend of the Gulf of Mexico. Under the terms of the agreement,
production from Kerr-McGee's interest in Constitution, Ticonderoga and
surrounding undeveloped blocks is dedicated to the Cameron Highway oil pipeline
system for the life of the reserves. Cameron Highway expects volumes from these
fields in the first half of 2006. Further, we will construct and own a 70-mile,
16-inch oil pipeline which will connect the Constitution and Ticonderoga fields
with the Cameron Highway oil pipeline at the new Ship Shoal 332B platform. We
plan to install the new oil pipeline in the summer of 2005, with first
production scheduled for the first half of 2006.
 
  Second Quarter Ended June 30, 2004 Compared With Second Quarter Ended June 30,
2003
 
     For the quarter ended June 30, 2004, margin was $3.6 million higher than
the same period in 2003. Margin attributable to our NGL pipeline systems was up
$2.8 million due to an increase in volumes as our NGL pipeline had been down for
maintenance through the third quarter of 2003. In addition, margin from our NGL
fractionation plants increased $1.0 million due to higher volumes resulting from
improved processing economics at the plants in 2004.
 
     Operating expenses excluding depreciation, depletion and amortization for
the quarter ended June 30, 2004, were $0.7 million higher than the same period
in 2003 primarily due to an increase in allocated administrative costs,
including merger-related costs and directors and officers liability insurance.
 
     Other income and cash distributions from unconsolidated affiliates in
excess of earnings for the quarter ended June 30, 2004, declined $2.5 million.
As discussed above, Poseidon was withholding distributions to fund its capital
expenditures related to its Front Runner project. Poseidon completed its Front
Runner project in July 2004 and we expect to start receiving distributions in
late 2004 or early 2005.
 
  Six Months Ended June 30, 2004 Compared With Six Months Ended June 30, 2003
 
     For the six months ended June 30, 2004, margin was $5.9 million higher than
the same period in 2003. Margin attributable to our NGL pipeline systems was up
$4.2 million due to an increase in volumes as our NGL pipeline had been down for
maintenance through the third quarter of 2003. In addition, margin from our NGL
fractionation plants increased $1.8 million due to higher volumes resulting from
improved processing economics at the plants in 2004.
 
     Operating expenses excluding depreciation, depletion and amortization for
the six months ended June 30, 2004, were $3.1 million higher than the same
period in 2003. This increase was primarily due to timing of expenditures
associated with normal recurring operating expenses and an increase in allocated
administrative costs, including merger-related costs and directors and officers
liability insurance.
 
     Other income and cash distributions from unconsolidated affiliates in
excess of earnings for the six months ended June 30, 2004, declined $6.5
million. As discussed above, Poseidon was withholding distributions to fund its
capital expenditures related to its Front Runner project. Poseidon completed its
Front Runner project in July 2004 and we expect to start receiving distributions
in late 2004 or early 2005.
 
                                        49