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>
 
     Capital Contribution Arrangements.  We have also entered into capital
contribution arrangements with entities owned by El Paso Corporation, including
its regulated pipelines, in the past, and will most likely do so in the future,
as part of our normal commercial activities in the Gulf of Mexico. We have an
agreement to receive up to $6.1 million, of which $3.0 million has been
collected as of June 30, 2004, from ANR Pipeline Company for our Phoenix
gathering system, which went into service in July 2004. We expect to receive the
remaining amount from ANR Pipeline Company in the third quarter of 2004. The
amounts collected are reflected as a reduction in project costs. Regulated
pipelines often contribute capital toward the construction costs of gathering
facilities owned by others which are, or will be, connected to their pipelines.
 
     Unit Option Buyout/Option Plans.  As previously discussed in Note 6,
Partners' Capital, we will repurchase employee and director options before the
merger and outstanding restricted units will convert to Enterprise restricted
units or vest at the merger date.
 
9. COMMITMENTS AND CONTINGENCIES
 
  Legal Proceedings
 
     Grynberg.  In 1997, we, along with numerous other energy companies, were
named defendants in actions brought by Jack Grynberg on behalf of the U.S.
Government under the False Claims Act. Generally, these complaints allege an
industry-wide conspiracy to underreport the heating value as well as the volumes
of the natural gas produced from federal and Native American lands, which
deprived the U.S. Government of royalties. The plaintiff in this case seeks
royalties that he contends the government should have received had the volume
and heating value been differently measured, analyzed, calculated and reported,
together with interest, treble damages, civil penalties, expenses and future
injunctive relief to require the defendants to adopt allegedly appropriate gas
measurement practices. No monetary relief has been specified in this case. These
matters have been consolidated for pretrial purposes (In re: Natural Gas
Royalties Qui Tam Litigation, U.S. District Court for the District of Wyoming,
filed June 1997). Discovery is proceeding. Our costs and legal exposure related
to these lawsuits and claims are not currently determinable.
 
     Will Price (formerly Quinque).  We, along with numerous other energy
companies, are named defendants in Will Price, et al v. Gas Pipelines and Their
Predecessors, et al, filed in 1999 in the District Court of Stevens County,
Kansas. Plaintiffs allege that the defendants mismeasured natural gas volumes
and heating content of natural gas on non-federal and non-Native American lands,
seek certification of a nationwide class of natural gas working interest owners
and natural gas royalty owners to recover royalties that they contend these
owners should have received had the volume and heating value of natural gas
produced from their properties been differently measured, analyzed, calculated
and reported, together with prejudgment and postjudgment interest, punitive
damages, treble damages, attorney's fees, costs and expenses, and future
injunctive relief to require the defendants to adopt allegedly appropriate gas
measurement practices. No monetary relief has been specified in this case.
Plaintiffs' motion for class certification of a nationwide class of natural gas
working interest owners and natural gas royalty owners was denied on April 10,
2003. Plaintiffs were granted leave to file a Fourth Amended Petition, which
narrows the proposed class to royalty owners in wells in Kansas, Wyoming and
Colorado and removes claims as to heating content. A second class action
petition has been filed as to heating content claims. Our costs and legal
exposure related to these lawsuits and claims are not currently determinable.
 
                                        20