Enterprise Reports Record Results for Fourth Quarter 2007; Generates $1 Billion of Distributable Cash Flow in 2007

Business Wire, Jan 28, 2008

Gross operating margin from the partnership's natural gas storage business was $10 million for the fourth quarter of 2007 compared to $7 million for the same quarter in 2006. This increase was primarily attributable to improved results at the Wilson storage facility in Texas due to lower repair expenses in 2007 and a 2006 loss on the sale of base gas. All repairs are now complete on the three Wilson storage wells that were taken out of service in the second quarter of 2006. We are in the process of dewatering the caverns and returning working gas storage capacity to service which should be largely complete in the second quarter of 2008. Since the second quarter of 2006, when the facility was effectively taken out of service, Enterprise's gross operating margin has been reduced by approximately $29 million due to the outage and associated repair costs.

Offshore Pipelines & Services - Gross operating margin for the Offshore Pipelines and Services segment increased 174 percent to $74 million in the fourth quarter of 2007 from $27 million in the same quarter of 2006. The Independence project added $48 million of total gross operating margin for the fourth quarter of 2007 on average natural gas throughput of 719 billion British thermal units per day (BBtud). Gross operating margin for the fourth quarter of 2007 and 2006 also included recoveries from business interruption insurance claims of $2 million and $1 million, respectively.

The offshore platform service business reported gross operating margin of $42 million for the fourth quarter of 2007, an increase of $31 million from $11 million reported in the fourth quarter of 2006. The Independence Hub platform, which became operational in March 2007, generated $30 million of this increase from fixed and volumetric revenues. Enterprise's share of offshore platform natural gas and crude oil processing volumes for the fourth quarter of 2007 increased by 340 percent and 8 percent, respectively, over the same quarter of 2006.

Gross operating margin from Enterprise's offshore natural gas pipeline business increased to $21 million in the fourth quarter of 2007 from $8 million in the fourth quarter of 2006, excluding recoveries from business interruption insurance in both periods. This increase was principally due to an $18 million increase in gross operating margin from the Independence Trail pipeline, which began operations in July 2007. Partially offsetting the benefit from Independence was a decrease in volumes and revenues from other pipeline systems including the Viosca Knoll and High Island/East Breaks pipelines. Transportation volumes for the offshore natural gas pipeline business were 1.8 TBtud in the fourth quarter of 2007 compared to 1.5 TBtud in the same quarter of 2006. Volumes through the Independence platform and pipeline have averaged approximately 900 BBtud in January 2008.

Enterprise's offshore oil pipeline business recorded gross operating margin of $9 million for the fourth quarter of 2007 compared to $7 million for the fourth quarter of 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. BP commenced production from the Atlantis development during December 2007 that resulted in gross volumes on the Cameron Highway Oil Pipeline increasing to 100 MBPD for the fourth quarter of 2007 from 52 MBPD for the same quarter of 2006. In January 2008, gross volumes of crude oil on Cameron Highway have averaged approximately 160 MBPD and the pipeline is currently flowing approximately 185 MBPD of crude oil.