GulfTerra Energy to temporarily reduce revolver debt with common units offering

By Sara Rosenberg

New York, Oct. 14 - GulfTerra Energy Partners LP plans to temporarily reduce borrowings under its revolver with proceeds from an offering of 4.5 million common units, according to a filing with the Securities and Exchange Commission.

Estimated net cash proceeds from the offering are approximately $179.2 million, assuming an offering price of $41.71 per unit. As of June 30, the company had $415 million outstanding under its revolver, bearing interest at an average rate of 3.43%.

The revolver matures in September 2006.

During 2003, the company completed five equity offerings for net cash proceeds of approximately $312.9 million. Proceeds from these offerings were also used to temporarily repay indebtedness under the revolver, to redeem series B preference units and for general partnership purposes.

In July 2003, the company issued $250 million of 6¼% senior notes due 2010 and used the net proceeds of approximately $245 million to repay a $160 million term loan and temporarily reduce indebtedness under the revolver.

And in March 2003, the company issued $300 million of 8½% senior subordinated notes due 2010, using the proceeds of approximately $293 million to repay all indebtedness outstanding under its $237.5 million senior secured acquisition term loan entered into as part of our November 2002 San Juan assets acquisition and temporarily reduce indebtedness outstanding under the revolver.

GulfTerra Energy is a Houston manager of a portfolio of interests and assets relating to the midstream energy sector.

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