Equity Investments

3 Months Ended

Mar. 31, 2012

Equity Investments [Abstract]

Equity Investments

Note 6 – Equity Investments

As of March 31, 2012, 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 Polo field in the Deepwater Gulf of Mexico. Our investment in Deepwater Gateway totaled $95.1 million and $96.0 million as of March 31, 2012 and December 31, 2011, respectively (including capitalized interest of $1.4 million at March 31, 2012 and December 31, 2011).Our net distributions from Deepwater Gateway totaled $2.2 million in the first quarter of 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.First production through the facility commenced in July 2007.Our investment in Independence Hub was $78.3 million and $79.7 million as of March 31, 2012 and December 31, 2011, respectively (including capitalized interest of $4.8 million and $4.9 million at March 31, 2012 and December 31, 2011, respectively). Our net distributions from Independence Hub totaled $4.2 million in the first quarter of 2012.

As disclosed in our 2011 Form 10-K, we invested in an Australian joint venture that engages in well intervention operations in the Southeast Asia region.At December 31, 2011, we fully impaired our investment in that joint venture (Note 7 of 2011 Form 10-K).In the first quarter of 2012, we recorded additional losses totaling $3.8 million related to our continued participation in this joint venture, including a $3.0 million negotiated exit fee from the joint venture.In April 2012, we paid this exit fee and we are no longer a participant in this Australian joint venture.