El Paso Energy Partners LP raised its first quarter and annual cash distributions to $0.65 and $2.60 per common unit, confirmed its quarterly and full-year earnings estimates, which are in line with Wall Street expectations, and signed a deal to build a gas production platform and gathering hub in Mustang Island block 103 in the Gulf of Mexico for Pioneer Natural Resources’ and Mariner Energy’s Falcon Field.

EPN management said the company remains comfortable with first quarter 2002 consensus earnings estimates of $0.16 per unit in line with its previously announced guidance for the full year of $0.69 per unit. EPN expects cash flow (earnings before interest, taxes, depreciation, and amortization) of $47-49 million for the first quarter in line with its guidance of $270 million in cash flow for the full year.

The new production hub platform and associated facilities will support production from Pioneer’s and Mariner’s field discovery in East Breaks blocks 579, 580, and 623 in the Gulf. Pioneer will serve as operator of Falcon Field. EPN anticipates that the new platform, dubbed Falcon Nest, will be completed and online in the first quarter of 2003. EPN will build 20 miles of 18-inch diameter pipeline connecting the platform to an offshore natural gas gathering system.

Falcon Nest will be installed in 390 feet of water and will have an initial design capacity of 300 MMcf/d. In addition to the Falcon field blocks, Pioneer and Mariner are dedicating an additional nine blocks in the area for Falcon Nest processing and gathering.

“Falcon Nest will be strategically located in a new development area of the western Gulf and will be built with the expansion capability to attract the development of additional natural gas discoveries from this new production area,” said EPN CEO Robert G. Phillips.

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