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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 29, 2001
(Date of Earliest Event Reported: January 29, 2001)
Commission File Number 1-11680
________________
EL PASO ENERGY PARTNERS, L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware 76-0396023
(State of Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(Address of Principal Executive Offices)
(Zip Code)
Registrant's Telephone Number, Including Area Code: (713) 420-2131
Item 5. Other Events
El Paso Energy Partners, L.P. announced today that
it has entered into a series of transactions resulting in
further business diversification and an increase in cash
flow to the Partnership. A copy of our press release is
attached hereto as Exhibit 99.1 and is incorporated herein
by reference.
Item 7. Financial Statements and Exhibits
c) Exhibits:
Exhibit Number Description
-------------- -----------
99.1 Press release dated January 29, 2001
Pursuant to the requirements of the Securities Exchange
Act of 1934, as amended, the registrant has duly caused this
report to be signed on its behalf by the undersigned
hereunto duly authorized.
EL PASO ENERGY PARTNERS, L.P.
January 29, 2001 /s/ D. Mark Leland
--------------------------
D. Mark Leland
Sr. Vice President and
Controller
(Chief Accounting Officer)
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
99.1 Press release dated January 29, 2001
EL PASO ENERGY PARTNERS, L.P. ANNOUNCES
ASSET REDEPLOYMENT AND DISTRIBUTION INCREASE TO UNITHOLDERS
HOUSTON, TEXAS, JANUARY 29, 2001-El Paso Energy Partners, L.P.
announced today that it has entered into a series of transactions
resulting in further business diversification and an increase in cash
flow to the Partnership. As a result of these transactions, the Board
of Directors has pre-approved an increase in the quarterly distribution
to common unitholders of $0.10 per year to a quarterly rate of $0.575
per unit (an annualized distribution of $2.30 per common unit). The
increase will be effective for the distribution that is scheduled to be
paid in May 2001.
The transactions involve the sale of certain offshore Gulf of
Mexico pipeline assets to third parties for approximately $134 million
cash. Additionally, El Paso Energy Corporation will make payments
totaling $29 million to the Partnership in quarterly installments of
$2.25 million in the first three years and $2 million in the first
quarter of 2004. The first installment will be made on or before March
31, 2001. The offshore assets to be sold include the Partnership's
interests in the Stingray, UTOS, Nautilus, Manta Ray, Nemo, Green
Canyon, and Tarpon systems. Following the sales, the Partnership will
continue to own significant offshore interests and operate the High
Island Offshore system, East Breaks Gathering, Viosca Knoll Gathering,
and Poseidon Oil Pipeline systems and will continue to aggressively
pursue its offshore pipeline and platform development strategy.
The Partnership will use proceeds from the dispositions to
purchase South Texas fee-based natural gas liquids (NGLs)
transportation and fractionation assets acquired by El Paso Field
Services in December 2000. These transactions will result in a
recorded net book loss of approximately $22 million. The assets being
sold generated adjusted EBITDA to the partnership of approximately $18
million during the 12-month period ending December 31, 2000, while the
assets to be acquired generated EBITDA of approximately $26 million
during the same period, enabling the partnership to implement the
increase in its quarterly distribution announced today. The
opportunity to effectuate these transactions arose as a result of the
acquisition by general partner El Paso Energy Corporation of the
natural gas and natural gas liquids businesses of PG&E Gas
Transmission, Texas Corporation and PG&E Gas Transmission Teco, Inc.
and its merger with The Coastal Corporation.
"These transactions provide solid long-term Partnership cash flow
and allow us to continue our plan to diversify and grow the
Partnership's sources of cash flow," said Robert G. Phillips, chief
executive officer of the Partnership. "In the past year, we have
acquired assets with pro-forma cash flows of $41 million, adding to our
existing business mix of offshore oil and gas pipelines and platforms,
the midstream businesses of coal bed methane gas gathering, natural gas
storage, and now fee-based transportation and fractionation of NGLs.
During this period, we have been able to share the increased cash flow
with our unitholders through three distribution increases to a current
annual rate of $2.30 per unit."
The assets to be acquired from El Paso Field Services include more
than 600 miles of NGL gathering and transportation pipelines and three
fractionation plants located in South Texas. The NGL pipeline system
is comprised of 379 miles of y-grade pipeline used to gather and
transport unfractionated NGLs from various processing plants to the
Shoup Plant, located in Corpus Christi, the largest of the three
fractionators acquired. The system also includes 177 miles of
pipelines that deliver fractionated products such as ethane, propane,
and butane to refineries and petrochemical end-users along the Texas
Gulf Coast and to common carrier NGL pipelines. The three
fractionation facilities consist of approximately 96,000 barrels per
day of capacity that operated at more than 90 percent of capacity
during 2000. These transportation and fractionation assets receive
deliveries of NGLs from El Paso Field Services' extensive South Texas
gathering and processing infrastructure, which includes seven
processing plants with capacity of 1.3 billion cubic feet of natural
gas per day.
"We believe the advantages of these transactions to the
Partnership are significant," continued Phillips. "The Partnership
will enjoy a more diversified business platform and the benefits of its
relationship with its general partner, a wholly owned subsidiary of El
Paso Energy Corporation, which is now the largest and most broadly
based natural gas company in the world. The newly acquired South Texas
NGL assets, along with the expected initiation of service on our Prince
Platform in mid-2001, full-year results from Crystal Gas Storage,
stable offshore throughput volumes on our oil and gas pipeline systems,
and higher commodity prices for our equity production, will help us
achieve our goal of increasing our distribution to unitholders by
10 percent in 2001 while generating approximately $155 million in
adjusted EBITDA."
The Partnership believes its net income for 2001 will be in the
range of $40 million to $50 million excluding the aforementioned non-
cash loss associated with these transactions.
El Paso Energy Partners, L.P. is a publicly owned master limited
partnership. The partnership owns and operates a diversified set of
midstream assets including five offshore natural gas and oil pipelines
and five production handling platforms located in the Gulf of Mexico, a
strategically located salt dome storage facility with 7.2 billion cubic
feet of current storage capacity in Mississippi, and a 450-mile coal
bed methane gathering system in Alabama. Visit El Paso Energy Partners
on the Web at www.elpasopartners.com.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This release includes forward-looking statements and projections,
made in reliance on the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. El Paso Energy Partners has
made every reasonable effort to ensure that the information and
assumptions on which these statements and projections are based are
current, reasonable, and complete. However, a variety of factors
could cause actual results to differ materially from the projections,
anticipated results, or other expectations expressed in this release,
including, without limitation, oil and natural gas prices; continued
drilling, exploration and production activity in the United States and
areas of the Gulf of Mexico served by El Paso Energy Partners; and
successful negotiation of customer contracts on its pipelines,
platforms, and storage facilities. While the partnership makes these
statements and projections in good faith, neither the partnership nor
its management can guarantee that the anticipated future results will
be achieved. Reference should be made to El Paso Energy Partners'
(and its affiliates') Securities and Exchange Commission filings for
additional important factors that may affect actual results.
# # #
Contacts:
Public Relations Investor Relations
Norma F. Dunn Bruce L. Connery
El Paso Energy Corporation El Paso Energy Corporation
Senior Vice President Vice President
Office: (713) 420-3750 Office: (713) 420-5855
Fax: (713) 420-3632 Fax: (713) 420-4417