Equity Investments

6 Months Ended

Jun. 30, 2013

Equity Investments [Abstract]

Equity Investments

Note 6 — Equity Investments

As of June 30, 2013, we had two investments that we account for using the equity method of accounting: Deepwater Gateway and Independence Hub, both of which are included in our Production Facilities segment. 

Deepwater Gateway, L.L.C.  In June 2002, we, along with Enterprise Products Partners L.P. (”Enterprise”), formed Deepwater Gateway, each with a 50% interest, to design, construct, install, own and operate a tension leg platform production hub primarily for Anadarko Petroleum Corporation's Marco Polofield in the Deepwater Gulf of Mexico.  Our investment in Deepwater Gateway totaled $88.5 million and $91.4 million as of June 30, 2013 and December 31, 2012, respectively (including capitalizedinterest of $1.3 million at June 30, 2013 and December 31, 2012).

Independence Hub, LLC.  In December 2004, we acquired a 20% interest in Independence Hub, an affiliate of Enterprise.  Independence Hub owns the "Independence Hub" platform located in Mississippi Canyon Block 920 in a water depth of 8,000 feet.Our investment in Independence Hub was $74.4 million and $76.2 million as of June 30, 2013 and December 31, 2012, respectively (including capitalized interest of $4.4 million and $4.6 million at June 30, 2013 and December 31, 2012, respectively).

We received the following distributions from our equity investments (in thousands):

		Three Months Ended				Six Months Ended
		June 30,				June 30,
		2013		2012		2013		2012
Deepwater Gateway	$	2,000	$	1,250	$	3,500	$	3,400
Independence Hub		1,200		600		2,360		4,800
Total	$	3,200	$	1,850	$	5,860	$	8,200

As disclosed in our 2012 Form 10-K, in the first quarter of 2012, we recorded losses totaling $3.8 million associated with our investment in an Australian joint venture, including a $3.0 million fee paid in connection with our exit from the joint venture.  In April 2012, we paid this fee and received approximately $3.7 million of proceeds for our pro rata portion (50%) of the value of certain of the net assets on hand at the time of our exit.  These proceeds were recorded as income in our equity in earnings in the accompanying condensed consolidated statements of operations.  We are no longer a participant in this joint venture.