UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): June 5, 2008 (May 30,
2008)
GENESIS
ENERGY, L.P.
(Exact
name of registrant as specified in its charter)
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Delaware
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1-12295
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76-0513049
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(State
or other jurisdiction of incorporation or organization)
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(Commission
File Number)
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(I.R.S.
Employer Identification No.)
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500
Dallas, Suite 2500, Houston, Texas
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77002
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(Address
of principal executive offices)
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(Zip
Code)
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(713)
860-2500
(Registrant's
telephone number, including area code)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
£ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
£ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240-14a-12)
£ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240-14d-2(b))
£ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240-13e-4(c)
Item
1.01. Entry into a Material Definitive Agreement
On May
30, 2008, Genesis Energy, L.P. completed two “drop-down” transactions with
Denbury Onshore, LLC, (Denbury Onshore), a wholly-owned subsidiary of Denbury
Resources Inc. (Denbury) and an affiliate of our general partner. In
connection with the completion of these transactions, we, through certain
subsidiaries, entered into several agreements with Denbury Onshore, including
the following:
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Pipeline
Financing Lease Agreement for the NEJD
Pipeline.
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Purchase
and Sale Agreement for the Free State
Pipeline.
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Transportation
Services Agreement for the Free State
Pipeline.
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Additionally,
we amended and restated our credit agreement as discussed below.
Pipeline Financing Lease
Agreement for the NEJD Pipeline
We
entered into a twenty-year financing lease transaction with Denbury Onshore
valued at $175 million and acquired certain security interests in Denbury’s
North East Jackson Dome (NEJD) Pipeline System. Under the terms of
the Pipeline Financing Lease Agreement, Denbury Onshore will make quarterly base
rent payments beginning August 30, 2008. These quarterly rent
payments are fixed at $5,166,943 per quarter or approximately $20.7 million per
year (prorated for 2008) during the lease term at an interest rate of 10.25%.,We
will reassign and release to Denbury Onshore all of our interests in the NEJD
Pipeline at the end of such term for a nominal payment. Denbury has
guaranteed the payment obligations of Denbury Onshore under the Pipeline
Financing Lease Agreement.
The NEJD
Pipeline System is a 183-mile, 20” pipeline extending from the Jackson Dome,
near Jackson, Mississippi, to near Donaldson, Louisiana, and is currently being
used by Denbury for its Phase I area of tertiary operations in southwest
Mississippi. Denbury has the rights to exclusive use of the NEJD
Pipeline System, will be responsible for all operations and maintenance on the
system, and will bear and assume all obligations and liabilities with respect to
the pipeline. The NEJD transaction was funded with borrowings under
our credit facility.
Purchase and Sale Agreement
and Transportation Services Agreement for the Free State
Pipeline
We
purchased Denbury’s Free State Pipeline for $75 million, consisting of $50
million in cash, which we borrowed under our credit facility and $25 million in
the form of 1,199,041 Genesis Energy, L.P. common units. The number
of common units issued was based on the average closing price of Genesis common
units from May 28, 2008 through June 3, 2008.
The Free
State Pipeline is an 86-mile, 20” pipeline that extends from Denbury’s CO2
source fields at the Jackson Dome, near Jackson, Mississippi, to Denbury’s oil
fields in east Mississippi. We entered into a twenty-year
transportation services agreement to deliver CO2 on the Free State pipeline for
Denbury’s use in it tertiary recovery operations. Under
the terms of the transportation services agreement, we are responsible for
owning, operating, maintaining and making improvements to the
pipeline. Denbury has rights to exclusive use of the pipeline and is
required to use the pipeline to supply CO2 to its current and certain of its
other tertiary operations in east Mississippi. The transportation
services agreement provides for a $100,000 per month minimum payment plus a
tariff based on throughput. Denbury has two renewal options, each for five years
on similar terms. Denbury has guaranteed the payment obligations of
Denbury Onshore under the Purchase and Sale Agreement and Transportation
Services Agreement. Any sale by us of the Free State Pipeline
and related assets or of our ownership interest in our subsidiary that holds
such assets would be subject to a right of first refusal purchase option in
favor of Denbury.
First Amended and Restated
Credit Agreement
We also
amended and restated our existing $500 million Senior Secured Revolving Credit
Agreement dated November 15, 2006 between Genesis Crude Oil, L.P. and a
syndicate of lenders. The agreement included the necessary amendments
to allow us to borrow the amounts necessary to fund the transactions with
Denbury. The remaining significant terms of the credit agreement did
not change. For more information about our credit agreement, see our
2007 annual report on Form 10-K.
The
Pipeline Financing Lease Agreement, Purchase and Sale Agreement, Transportation
Services Agreement and Amended and Restated Credit Agreement, each dated May 30,
2008, are filed herewith as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively,
and incorporated herein by reference. This report contains only a
summary of certain provisions of such agreements and related
documents. This summary does not purport to be a complete summary of
such agreements and related documents and is qualified by reference to those
agreements. Additionally, such agreements contain representations and
warranties and other provisions that are qualified in many respects, including
by reference to disclosure schedules that have not been filed. Those
representations and warranties were made to provide the parties thereto with
specified rights and remedies and to allocate risks among those
parties. Accordingly, those representations and warranties should not
be relied upon as business or operational information about any of the parties
or their affiliates.
Item
2.01. Completion of Acquisition or Disposition of Assets
As
disclosed in Item 1.01 above, we completed the acquisition of the Free State
Pipeline on May 30, 2008.
Item
3.02. Unregistered Sales of Equity Securities
On June
4, 2008, we issued 1,199,041 of our common units to Denbury
Onshore. The units were issued at a value of $20.85 per unit,
for a total value of $25 million as a portion of the consideration for the
acquisition of the Free State Pipeline in Mississippi. See
description in Item 1.01 above. As a result of this purchase,
Denbury Onshore will hold 3.0% of our outstanding common units and our general
partner will hold 7.2% of our outstanding common units. This issuance
of common units by us was completed on June 4, 2008 and was exempt from
registration under the Securities Act of 1933 by reason of Section 4(2) thereof
and Rule 506 of Regulation D promulgated thereunder.
Item
9.01. Financial Statements and Exhibits
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(a)
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Financial
statements of businesses acquired.
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Not
applicable.
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(b)
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Pro
forma financial information.
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Not
applicable.
The
following materials are filed as exhibits to this Current Report on Form
8-K.
Exhibits.
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Pipeline
Financing Lease Agreement by and between Genesis NEJD Pipeline, LLC, as
Lessor and Denbury Onshore, LLC, as Lessee for the North East Jackson Dome
Pipeline dated May 30, 2008.
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Purchase
and Sale Agreement between Denbury Onshore, LLC and Genesis Free State
Pipeline, LLC dated May 30, 2008.
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Transportation
Services Agreement between Genesis Free State Pipeline, LLC and Denbury
Onshore, LLC dated May 30, 2008
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First
Amended and Restated Credit Agreement dated as of May 30, 2008 among
Genesis Crude Oil, L.P., Genesis Energy, L.P., the Lenders Party Hereto,
Fortis Capital Corp., and Deutsche Bank Securities
Inc.
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
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GENESIS
ENERGY, L.P.
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(A
Delaware Limited Partnership)
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By:
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GENESIS
ENERGY, INC., as
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General
Partner
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Date: June
5, 2008
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By:
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/s/ Ross
A. Benavides
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Ross
A. Benavides
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Chief
Financial Officer
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