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 (Date of earliest event reported): April 1, 2001
Commission File Number 1-14323
ENTERPRISE PRODUCTS PARTNERS L.P.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0568219
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
2727 North Loop West
Houston, Texas 77008
(Address of principal executive (Zip Code)
offices)
(713) 880-6500
(Registrant's telephone number, including area code)
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On April 2, 2001, the Company announced that its 99% owned operating
subsidiary, Enterprise Products Operating L.P. (the "Operating Partnership"),
had completed the purchase of Acadian Gas, LLC ("Acadian") from Coral Energy,
LLC ("Coral"), an affiliate of Shell Oil Company, for $226 million in cash,
inclusive of working capital. The effective date of the transaction was April 1,
2001. Coral owns approximately 21% of the Company (in addition to a 30%
ownership interest in Enterprise Products GP, LLC, the 1% General Partner of the
Company and the 1.0101% General Partner of the Operating Partnership). Three of
the ten current directors of the General Partner are nominees of Coral: J. R.
Eagan, J. A. Berget and Curtis R. Frasier. The purchase price is based on an
arm's length transaction between the Operating Partnership and Coral with
financing being provided by proceeds from the Operating Partnership's $450
million public debt offering completed in January 2001 (details of which are
filed as part of the Company's Form 8-K dated January 24, 2001).
The acquisition of Acadian integrates natural gas pipeline systems in
South Louisiana with the Operating Partnership's Gulf Coast natural gas
processing and natural gas liquid ("NGL") fractionation, pipeline and storage
system. Acadian's assets are comprised of the 438-mile Acadian, 577-mile Cypress
and 27-mile Evangeline natural gas pipeline systems, which together have over
one billion cubic feet ("Bcf") per day of capacity. These natural gas pipeline
systems are wholly-owned with the exception of the Evangeline system in which
Acadian holds an approximate 49.5% economic interest. The system includes a
leased natural gas storage facility at Napoleonville, Louisiana.
Acadian used this system to link natural gas supplies from onshore and
offshore Gulf of Mexico developments (encompassing offshore pipelines,
continental shelf and deepwater production) with local gas distribution
companies, electric generation and industrial customers, including those in the
Baton Rouge-New Orleans-Mississippi River corridor. In addition, the systems
have interconnects with twelve interstate pipelines and four intrastate
pipelines and a bi-directional interconnect with the largest U.S. natural gas
marketplace at Henry Hub. The Operating Partnership intends to continue such use
of this system.
A copy of the Company's press release announcing the completion of this
transaction is attached hereto as an exhibit.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of business acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
2.1 Purchase and Sale Agreement by and between Coral Energy, LLC and Enterprise
Products Operating L.P., dated as of September 22, 2000 (incorporated by
reference to Exhibit 10.1 to the Company's Form 8-K filed on September 26,
2000).
99.1 Press Release dated April 2, 2001.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ENTERPRISE PRODUCTS PARTNERS L.P.
By: Enterprise Products GP, LLC,
its general partner
Date: April 4, 2001 By: /s/ Michael J. Knesek
Michael J. Knesek
Vice President, Controller, and
Principal Accounting Officer of
Enterprise Products GP, LLC
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
2.1 Purchase and Sale Agreement by and between Coral Energy, LLC and
Enterprise Products Operating L.P., dated as of September 22, 2000
(incorporated by reference to Exhibit 10.1 to the Company's Form 8-K
filed on September 26, 2000).
99.1 Press Release dated April 4, 2001.
EXHIBIT 99.1
Enterprise Completes Acquisition of Acadian Gas LLC;
Anticipates Distribution Increase in Second Quarter
HOUSTON--(BUSINESS WIRE)--April 2, 2001--Enterprise Products Partners
L.P. (NYSE:EPD) today announced that its operating partnership has completed its
acquisition of Acadian Gas LLC from Shell US Gas and Power LLC, an affiliate of
Shell Oil Company. The effective date of the transaction was April 1, 2001.
Acadian Gas is a Louisiana intrastate natural gas pipeline company
comprised of the Acadian, Cypress and Evangeline pipeline systems, which
together include over 1,000 miles of pipeline and have over one billion cubic
feet ("Bcf") per day of capacity. The system includes a leased natural gas
storage facility with 3.4 Bcf of capacity.
These systems link growing supplies of natural gas from onshore
developments and, through connections with offshore pipelines, Gulf of Mexico
production to local gas distribution companies, electric generation and
industrial customers, including those in the Baton Rouge-New Orleans-Mississippi
River corridor. In addition, these pipelines have interconnects with 12
interstate pipelines and four intrastate pipelines and a bi-directional
interconnect with the largest U.S. natural gas marketplace at the Henry Hub.
"With the completion of this acquisition and our recent purchase of
interests in natural gas pipelines in the central Gulf of Mexico, Enterprise has
quickly established an attractive natural gas pipeline business. We believe
these assets have outstanding growth potential from increased production from
deepwater developments in the Gulf and demand growth from power generators and
industrial customers on the Louisiana Gulf Coast," stated O.S. "Dub" Andras,
president and chief executive officer of Enterprise.
"We have invested over $500 million in pipeline assets in the past
year. These assets will significantly increase the amount of our cash flow
generated from fee-based businesses. As a result, our management will be
recommending that our board of directors increase the partnership's annual cash
distribution rate by $0.15 per unit, effective with the distribution of cash
attributable to the second quarter which is paid in August. This would be our
fourth distribution increase since December 1999. During this period, we would
have increased our cash distribution rate by over 30 percent," continued Andras.
"In reviewing the first quarter, our integrated system of assets and
conservative cash distribution policy served us well. The unprecedented level of
natural gas prices during the quarter significantly reduced the economics and
margins associated with our natural gas processing activities. While this will
most likely result in our book earnings for the first quarter being less than
the consensus estimate of security analysts, we believe our cash flow for the
quarter will be more than the amount required to pay our current quarterly cash
distribution rate of $0.55 per unit. Pricing conditions have improved as we
begin the second quarter," stated Andras.
Enterprise Products Partners L.P. is the second largest publicly
traded, midstream energy partnership with an enterprise value of approximately
$3.6 billion. Enterprise is a leading provider of midstream energy services to
producers and consumers of natural gas and natural gas liquids ("NGLs"). The
company's services include natural gas transportation, processing and storage
and NGL fractionation (or separation), transportation, storage and import/export
terminalling. The company's assets are geographically focused on the United
States' Gulf Coast, which accounts for approximately 55 percent of both domestic
natural gas and NGL production and 75 percent of domestic NGL demand.
This press release includes forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934 based on the
beliefs of the company, as well as assumptions made by, and information
currently available to, management. Although Enterprise believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to be correct.