GulfTerra Will Merge with Enterprise to Creating Natural Gas Leader

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Researched by industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). The Shareholders of GulfTerra Energy Partner's L.P. (NYSE: GTM) (Houston Texas) have approved the merger with Enterprise Products Partners LP (NYSE: EPD) during its shareholders meeting in July 2004. The merger will create the second largest publicly traded energy partnership, with a total combined asset value of $13 billion. Under the terms of the merger, El Paso Corporation (NYSE: EP) will contribute its 50 percent ownership interest in GulfTerra for 9.9 percent ownership interest in Enterprise and will receive $370 million in cash.

Enterprise Products Partners L.P. (Houston, Texas), which will retain its name as part of the merger, is the second largest publicly traded midstream energy partnership with an approximate Enterprise value of $7.0 Billion. Its assets combined with Mid-America and Seminole Pipeline, creates one of the largest suppliers of natural gas processing, storage, and NGL fractionation import and export terminaling in the U.S. While negotiating the merger, Enterprise has also recently purchased an additional 40 percent of GulfTerra's assets in Spring 2004.

GulfTerra Energy Partners, LP (Houston, Texas) is one of the industry's leading operators of intrastate natural gas pipelines, with assets of more than 15,700 miles of gathering pipelines and a capacity of over 10.3 billion Bcf/d. In addition, it operates more than 1,000 miles of natural gas liquids pipelines, four fractionation plants, two natural gas storage facilities, and seven offshore hubs.

GulfTerra has also completed installation of the Marco Polo platform, which will increase production to approximately 50,000 barrels per day by early 2005. An announcement has also been made that it will build another pipeline project in the deepwater Gulf of Mexico, to provide oil and gas gathering services dedicated to the Cameron Highway Oil Pipe System in the Green Canyon Area.

The partnerships total capitalization as of June 2004 was $3.2 billion, consisting of $1.9 billion of debt and $1.3 billion of its partner's capital. For the six months ending June 30, 2004, their net income was $103 million compared with $91.5 million reported for the first half of 2003. All three combined assets will include over 30,000 miles of pipelines comprised of 17,000 miles of natural gas, 13,000 miles of NGL Pipelines and 340 miles of crude oil pipelines, with a storage capacity of 6.0 Bcf/d. The merger will be completed during the second half of 2004, wherein, everything that GulfTerra owns (South Texas Region) will become Enterprise.