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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: October 3, 2003
(Date of Earliest Event Reported: October 3, 2003)
GULFTERRA ENERGY PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 1-11680 76-00396023
(State or other (Commission File (I.R.S. Employer
jurisdiction of Number) Identification No.)
incorporation)
4 Greenway Plaza
Houston, Texas 77046
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (832) 676-4853
Item 5. Other Events and Required FD Disclosure
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On October 3, 2003, GulfTerra Energy Partners, L.P. announced
that one of its major corporate governance and independence goals
has been achieved as a result of the sale of a 9.9 percent
interest in its general partner to Goldman Sachs & Co. by El Paso
Corporation, the owner of the remaining 90.1 percent interest in
its general partner. In conjunction with this transaction,
Goldman Sachs also purchased 3 million newly issued common units
from GulfTerra. A copy of our press release is attached hereto
as Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements , Pro Forma Financial Information
and Exhibits
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c) Exhibits.
Exhibit Number Description
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99.1 Press Release dated October 3, 2003.
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 thereunto duly authorized.
GULFTERRA ENERGY PARTNERS, L.P.
By: /s/ Kathy A. Welch
----------------------------
Kathy A. Welch
Vice President and Controller
(Principal Accounting Officer)
Date: October 3, 2003
EXHIBIT INDEX
Exhibit Number Description
- -------------- -----------
99.1 Press Release dated October 3, 2003.
EXHIBIT 99.1
GulfTerra Energy Partners NEWS
GulfTerra Energy Partners, L.P.
P.O. Box 2511
Houston, TX 77252-2511
For Immediate Release
GulfTerra Energy Partners, L.P. Accomplishes Corporate Governance
Initiatives and Sells 3.0 Million Common Units
HOUSTON, TEXAS, October 3, 2003-GulfTerra Energy Partners, L.P.
(NYSE:GTM) announced today that one of its major corporate
governance and independence goals has been achieved as a result
of the sale of a 9.9-percent interest in its general partner to
Goldman Sachs & Co. (NYSE:GS) by El Paso Corporation (NYSE:EP),
the owner of the remaining 90.1-percent interest its general
partner. In conjunction with this transaction, Goldman Sachs also
purchased 3 million newly issued common units from GulfTerra. The
total consideration paid by Goldman Sachs for the GP interest and
the common units was $200 million. GulfTerra used the proceeds of
the common unit sale of $112 million and borrowings from its
revolving credit facility to redeem all of its issued and
outstanding Series B Preference Units. These Series B Preference
units, owned by El Paso, accrued distributions at an effective
rate of 10.25 percent per year and total $167 million as of
September 30, 2003. In 2010, the Series B Preference Units were
entitled to receive cash distributions at a rate of 12 percent on
the fully accrued amount.
"These transactions, including the sale of an interest in our
general partner by El Paso, the sale of new common units by
GulfTerra, and the redemption of the Series B Preference Units
owned by El Paso, allow us to complete important elements of our
independence initiatives plan announced earlier this year," said
Robert G. Phillips, chairman and chief executive officer of
GulfTerra Energy Partners. "Moreover, the significant investment
in GulfTerra by Goldman Sachs validates the business strategy and
performance of the partnership and highlights our continued
efforts to improve our corporate governance model."
Pursuant to the transaction, Goldman Sachs, through its 9.9-
percent interest in the general partner will have protective veto
rights on certain transactions and the right to exchange its
general partner interest for newly issued common units on a "cash-
flow neutral" basis after the fifth anniversary of the
transaction or upon the occurrence of certain events prior to the
fifth anniversary. The exchange achieves "cash-flow neutrality"
through a contemporaneous reduction in the general partner's
incentive distribution tiers which has the potential to lower the
partnership's long-term cost of equity.
Mr. Phillips added, "This transaction enables the partnership to
accomplish a number of goals including meeting commitments to our
investors and the rating agencies to further our independence
initiatives, the elimination of the Series B Preference units,
which simplifies our balance sheet, and the continued reduction
of related party arrangements with El Paso. Having achieved these
important de-linking steps, we look forward to working with our
general partner owners to continue providing impressive returns
to all of our investors."
GulfTerra Energy Partners, L.P. is one of the largest publicly
traded master limited partnerships with interests in a
diversified set of midstream assets located both offshore and
onshore. Offshore, the partnership operates natural gas and oil
pipelines and platforms and is an industry leader in the
development of midstream infrastructure in the Deepwater Trend of
the Gulf of Mexico. Onshore, GulfTerra is a leading operator of
intrastate natural gas pipelines, natural gas gathering and
processing facilities, natural gas liquids transportation and
fractionation assets, and salt dome natural gas and natural gas
liquids storage facilities. Visit GulfTerra Energy Partners on
the Web at www.gulfterra.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. The partnership 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, including the integration of acquired businesses, status
of the partnership's greenfield projects, successful negotiation
of customer contracts, and general economic and weather
conditions in markets served by GulfTerra Energy Partners and its
affiliates, could cause actual results to differ materially from
the projections, anticipated results or other expectations
expressed in this release. 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 the
partnership's (and its affiliates') Securities and Exchange
Commission filings for additional important factors that may
affect actual results.