EOTT Energy Partners, L.P. Announces Interim Credit Agreement; Discusses Enron Relationships
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HOUSTON, Nov. 30 /PRNewswire/ -- EOTT Energy Partners, L.P. (NYSE: EOT) announced today that it has entered into an interim credit facility with its primary lender, Standard Chartered, for the purpose of replacing its existing credit facility with Enron. It also announced that, due to events involving Enron, EOTT has suspended its previously announced plans to submit a proposal to its unitholders for the conversion of all outstanding subordinated units and additional partnership interests into common units.
As detailed in its Sept. 30, 2001 Quarterly Report on Form 10-Q, EOTT has a number of relationships with Enron and its subsidiaries. The most significant contractual relationships include the Enron credit facility scheduled to expire on Dec. 31, 2001 and the toll conversion and storage capacity agreements with Enron Gas Liquids, Inc. (EGLI), a wholly-owned subsidiary of Enron.
The execution today of the interim credit facility with Standard Chartered provides for the immediate issuance through March 2002 of up to $150 million of letters of credit. For the month of December, this is in addition to amounts previously provided under the Enron credit facility. EOTT continues to have active discussions with a group of unaffiliated lenders relating to a long-term working capital facility totaling approximately $300 million.
EOTT's management previously estimated that the ten-year toll conversion and storage capacity agreements with EGLI would provide annual cash flow to EOTT in excess of $23 million, with no material commodity market exposure. If EGLI is unable to meet its contractual obligations, this could subject EOTT to a significant increase in market commodity risk, and EOTT's cash flow over the ten-year term of the agreements could vary significantly from levels previously forecast.
EOTT Energy Corp., a wholly-owned subsidiary of Enron, is the general partner of EOTT. EOTT announced that two of the three outside directors of the general partner have resigned from the board of directors of the general partner. Edward O. Gaylord and Dee S. Osborne have tendered their resignations, citing personal reasons.
The general partner continues to monitor developments at Enron and to assess their impact on EOTT's existing agreements and relationships. While it is not feasible to predict the final outcome of these events, EOTT could be materially and adversely affected if Enron and its subsidiaries do not meet their contractual obligations to EOTT.
EOTT Energy Partners, L.P. is a major independent marketer and transporter of crude oil in North America. EOTT transports most of the lease crude oil it purchases via pipeline, which includes 8,200 miles of active intrastate and interstate pipeline and gathering systems. In addition, EOTT owns and operates a hydrocarbon processing plant and a natural gas liquids storage and pipeline grid system. EOTT Energy Corp., a wholly-owned subsidiary of Enron Corp., is the general partner of EOTT with headquarters in Houston. EOTT's Internet address is www.eott.com . The Partnership's Common Units are traded on the New York Stock Exchange under the ticker symbol "EOT".
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although EOTT Energy Partners, L.P. believes that its expectations are based on reasonable assumptions, it can give no assurance that such expectations will be achieved. Important factors that could cause actual results to differ materially from those in the forward looking statements herein include, but are not limited to, the Partnership's success in obtaining a long-term credit facility, EGLI's performance under the long- term toll conversion and storage capacity agreements, Enron's performance of its indemnity obligations to the Partnership, the success of the Partnership's risk management activities, the ability to process and deliver liquids products, the ability to operate the hydrocarbon processing complex efficiently, the cost of compliance with environmental laws and conditions of the capital markets and equity markets during the periods covered by the forward looking statements.
For Further Information, Contact:
John Ambler
713-646-6423
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SOURCE EOTT Energy Partners, L.P.
/CONTACT: John Ambler of EOTT Energy Partners, L.P., +1-713-646-6423/
/Web site: eott.com /
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