Enterprise Reports Results for Third Quarter 2007

Business Wire, Oct 25, 2007

"We are looking forward to the Wilson facility's return to full commercial service and profitability. Since the second quarter of 2006, when the facility was essentially taken out of service, repairs to the Wilson facility have lowered the gross operating margin for our natural gas storage business by approximately $27 million," added Creel.

Gross operating margin for the third quarter of 2007 included a $2.4 million charge for the write-off of accumulated conversion costs related to a cavern at the Petal storage facility in Mississippi that was deemed unsuitable to convert from NGL to natural gas storage service.

Offshore Pipelines & Services - Gross operating margin for the Offshore Pipelines and Services segment increased 24 percent to $47 million in the third quarter of 2007 from $38 million in the third quarter of 2006. Gross operating margin for the third quarter of 2007 and 2006 included recoveries from business interruption insurance claims of approximately $0.2 million and $20 million, respectively.

The offshore platform service business reported gross operating margin of $29 million for the third quarter of 2007, an increase of $20 million from $9 million reported in the third quarter of 2006, excluding recoveries from business interruption insurance. The Independence Hub Platform, which became operational in March 2007, generated $16 million of this increase from fixed and volumetric revenues earned on average natural gas throughput during the third quarter of 124 MMcf/d. Offshore platform natural gas and crude oil processing volumes for the third quarter of 2007 increased by 79 percent and 100 percent, respectively, from the same quarter of 2006.

Gross operating margin from Enterprise's offshore natural gas pipeline business increased to $9 million in the third quarter of 2007 from $1 million in the third quarter of last year, excluding recoveries from business interruption insurance. This increase was principally due to a (a) $7 million non-cash asset impairment charge in third quarter 2006 associated with Enterprise's investment in Neptune Pipeline Company; (b) $5 million from higher revenues on the High Island Offshore System as a result of a new tariff that went into effect March 2007; and (c) $3 million from Independence Trail pipeline that began operations in mid-July of this year. These increases were partially offset by lower transportation volumes on the Constitution, Viosca Knoll and Phoenix pipeline systems. Transportation volumes for the offshore natural gas pipeline business were 1.3 TBtud in the third quarter of 2007 compared to 1.6 TBtud in the third quarter of last year.

Enterprise's offshore oil pipeline business recorded gross operating margin of $9 million for the third quarters of both 2007 and 2006. An increase in equity earnings from Enterprise's 50 percent ownership interest in the Cameron Highway Oil Pipeline system due to higher volumes and lower interest expense was offset by lower volumes on certain of the partnership's other offshore oil pipelines.