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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: December 14, 2001
(Date of Earliest Event Reported: December 12, 2001)
Commission File Number 1-11680
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EL PASO ENERGY PARTNERS, L.P.
(Exact Name of Registrant as Specified in its Charter)
Delaware 76-0396023
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
El Paso Building
1001 Louisiana Street
Houston, Texas 77002
(Address of Principal Executive Offices)
(Zip Code)
Registrant's Telephone Number, Including Area Code: (713) 420-2600
Item 5. Other Events.
El Paso Energy Partners, L.P. announced 2001 earnings expectation
and the anticipated acquisition of additional midstream assets from El Paso
Corporation, such as the EPGT Texas Pipeline (GTT), in early 2002. 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
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99.1 Press Release dated December 12, 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.
EL PASO ENERGY PARTNERS, L.P.
By: /s/ D. Mark Leland
--------------------
D. Mark Leland
Senior Vice President
and Controller
(Principal Accounting Officer)
Date: December 14, 2001
EXHIBIT 99.1
El Paso Energy Partners Increases 2001 Earnings Expectation;
Provides Guidance for 2002
HOUSTON, TEXAS, December 12, 2001-El Paso Energy Partners
L.P. (NYSE:EPN), one of the largest publicly traded master
limited partnerships, today reaffirmed its earnings
expectations of $12 million to $17 million for the fourth
quarter 2001 and $55 million to $60 million for the full
year ending December 31, 2001. EPN expects cash flow, as
measured by earnings before interest, depreciation, and
amortization (adjusted EBITDA), will total approximately $50
million for the fourth quarter 2001 and exceed $160 million
for 2001, a 49-percent increase over the same period last
year.
For 2002, EPN expects net income to increase to
approximately $70 million and cash flow to exceed $230
million. These preliminary expectations are based only upon
the company's current midstream asset portfolio and
announced capital projects. Separately, EPN is reaffirming
its expected capital investment budget for 2002 in the range
of $500 million to $750 million. Included in this budget is
the anticipated acquisition of additional midstream assets
from El Paso Corporation, such as the EPGT Texas Pipeline
(GTT). The GTT assets include the largest intrastate
pipeline in Texas, a strategically located gas storage
facility, and numerous natural gas processing plants. GTT
was purchased by El Paso in December 2000 for approximately
$840 million. In January 2001, El Paso sold to EPN GTT's
South Texas natural gas liquids business for $133 million.
Based on preliminary discussions with El Paso, EPN expects
to acquire the remaining GTT assets in early 2002.
In 2001, EPN significantly increased its cash flows and
earnings through accretive acquisitions and new organic
growth projects totaling capital investments of more than
$540 million. To support this growth, the company
successfully raised $528 million from the public capital
markets (of which 54 percent was equity) and completed asset
sales netting $108 million. Additionally, EPN increased its
bank credit facility to $600 million, of which approximately
$310 million is currently available. With a successful
execution of the company's 2002 capital plan, EPN expects to
maintain its strong balance sheet position by financing
future acquisitions and new projects with 50-percent equity
and 50-percent debt.
EPN's record performance in 2001 is largely due to increased
cash flows from its diversified portfolio of midstream, fee-
based assets including the addition of several key asset
acquisitions completed throughout the year and organic
growth in its core Gulf of Mexico pipeline and platform
business. The 2001 acquisitions included the $133-million
purchase of GTT's natural gas liquids business, the $198-
million purchase of the Chaco cryogenic natural gas
processing plant located in New Mexico, and the $85-million
acquisition of the remaining 50-percent ownership interest
in Deepwater Holdings L.P., which owns the High Island
Offshore Pipeline System and the East Breaks Gathering
System in the Gulf of Mexico.
Additionally in 2001, EPN successfully deployed its Prince
Tension Leg Platform to serve the Deepwater Trend of the
Gulf of Mexico and recently announced new offshore midstream
projects including a 37-mile gas gathering system to serve
Murphy Exploration and Production Company's Medusa discovery
and a new floating platform and export pipelines to serve
Anadarko Petroleum Corporation's Marco Polo Deepwater
discovery. These projects provide solid growth prospects for
2003 and beyond.
EPN's expectations for a 44-percent increase in adjusted
EBITDA in 2002 to more than $230 million are driven by the
anticipated contributions from the Prince platform installed
in September 2001, the Chaco and Deepwater Holdings assets
acquired in October 2001, and the completion of the
announced expansion of its Crystal natural gas storage
facility located in Mississippi. Specifically, El Paso
Energy Partners will benefit from a full year of revenues
from the Prince platform, which should add $29 million to
2002 cash flow with 50 percent from guaranteed monthly
payments. Additionally, the operations of the Chaco gas
plant and the 50-percent interest in Deepwater Holdings are
expected to add $34 million of cash flow in 2002. EPN also
expects increased revenues from its Crystal Gas Storage
unit, which plans to commence service from the expanded
Petal Gas Storage cavern #7 in June 2002 under a 20-year
firm storage contract with Southern Company. Revenue from
this expansion is expected to add approximately $10 million
of adjusted EBITDA in 2002 and $20 million per year
thereafter on a full-year basis.
EPN increased its distribution to common unit holders twice
during 2001, from an annual rate of $2.20 to $2.45-an 11.4-
percent year-to-year increase. EPN expects to increase its
distribution to at least $2.70 per common unit by the end of
2002. EPN's diversified midstream assets are the drivers for
year-to-year cash flow improvement of 44 percent and provide
the company the confidence that it can achieve its 2002
distribution growth target of 10 percent.
"Our current record cash flow levels and expected growth for
2002 are derived from sound investments EPN has made in
strategic midstream fee-based assets," said Robert G.
Phillips, chief executive officer of El Paso Energy
Partners. "These assets generate a cash flow stream which is
over 80-percent fee based and are supported by solid long-
term contracts with creditworthy entities that utilize our
assets and our services. Our businesses are geographically
diversified across the midstream energy value chain and are
financed in a financially prudent manner. El Paso Energy
Partners engages in no energy trading activities, and our
exposure to the Enron bankruptcy is negligible. Our
investors should take comfort in the fact that we are an
asset-rich entity with stable cash flows, a solid balance
sheet, and have increased our limited partner distributions
by approximately 10 percent per year over the life of the
partnership. We expect that our current assets and strong
growth prospects will lead to higher distribution increases
in the future while maintaining a quality balance sheet."
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 six production handling
platforms located in the Gulf of Mexico. In addition, the
partnership owns and operates a strategically located salt
dome storage facility with 7.2 billion cubic feet of current
storage capacity in Mississippi, a 450-mile coal bed methane
gathering system in Alabama, more than 600 miles of natural
gas liquids gathering and transportation pipelines and three
fractionation plants located in South Texas, and a 700-
thousand dekatherm per day cryogenic gas processing facility
in the San Juan Basin of New Mexico. Visit El Paso Energy
Partners on the Web at www.elpasopartners.com.
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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
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.