LEHMAN BROTHERS INC.

Analyst:        Richard Gross
Telephone #:    212-526-3143
Headline:       EOTT Energy Partners, L.P.: Downgrading to 2-Outperform
Industry:       Energy & Power
Region:         United States
 Today's Date:  07/07/00
 Ticker:        EOT                      Fiscal Year:    12/31
 Price:         14.13                    52wk Range:     19 - 11
 Rank(New):     2 - Outperform           Target(New):    16
 Rank(Old):     1 - Buy                  Target(Old):    16.5
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EPS  1999             2000               2001              %Change
     Act.     Old      New      St.Est   Old      New      St.Est
2000/2001
1Q    0.17    0.01     0.08A    0.08A    - -E     - -E     0.00E    -53    -
-
2Q    0.09    0.14E    0.14E    0.14E    - -E     - -E     0.00E    56     -
-
3Q    0.02    0.16E    0.16E    0.16E    - -E     - -E     0.00E    700    -
-
4Q    0.08    0.13E    0.13E    0.13E    - -E     - -E     0.00E    63     -
-
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Yr.   0.36    0.50E    0.50E    0.56E    0.64E    0.64E    0.65E    39
28
P/E                    28.3                       22.1
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MARKET DATA                             FINANCIAL SUMMARY
Shares OutStanding (MM)    28.0         Revenue (B)              11.4
Mkt Capitalization (B)     0.4          Five-Year EPS CAGR       - - %
Dividend Yield             13.4         Return On Equity (2000)  - -
Convertible                No           Current Book Value       - -
Float                      - -          Debt To Capital          - - %
                                        Disclosure(s)            A
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INVESTMENT HIGHLIGHTS :
* We are downgrading EOTT Energy Partners to 2-Outperform from 1-Buy based
in
  part on the reduced prospects for near-term acquisitions.  We are also
  reducing our price target from $17 to $16, which is based on a cash
  distribution of $1.90 and a yield of 13.4%.
* We are concerned about the lack of near-term acquisition prospects for
  EOTT, and the subsequent impact this will have on cash distribution
  coverage levels.  EOTT's coverage level of total units is estimated at 75%

  for 2000 and 84% for 2001.
* EOTT's unit price is already up 9.1% through 2Q00 versus the S&P 500 which

  is down 1.0% in the same period.  We believe further unit appreciation
will
  likely be inhibited until coverage levels improve.
WE ARE DOWNGRADING EOTT ENERGY PARTNERS TO 2-OUTPERFORM FROM 1-BUYBASED IN
PART ON THE REDUCED PROSPECTS FOR NEAR-TERM ACQUISITIONS.  We are also
reducing our price target to $16 from $17, which is based on a cash
distribution of $1.90 and a yield of 13.4%.  We are maintaining our earnings

estimates for EOTT at $0.50 for 2000 and $0.64 for 2001.

WE ARE CONCERNED ABOUT THE LACK OF NEAR-TERM ACQUISITION PROSPECTS FOR EOTT
AND THE SUBSEQUENT IMPACT THIS HAS ON IMPROVING THE CASH DISTRIBUTION
COVERAGE LEVELS.
We estimate that the total unit coverage level will be 75% in 2000,
increasing to 84% in 2001, assuming a cash distribution of $1.90 per unit.
EOTT will need to boost its distributable cash level by approximately $14
million in order to reach the 100% coverage level for all units in 2000.
Without making an acquisition, it is unlikely that EOTT will reach this
coverage level before 2002.  Furthermore, although an acquisition would be
accretive in the long run, it would likely be dilutive to earnings and cash
in
the near-term.  In the meantime, EOTT has coverage support from Enron
through
2001.

UNIT PRICE APPRECIATION IS LIKELY TO BE INHIBITED UNTIL COVERAGE LEVELS
IMPROVE FURTHER
EOTTs unit price has appreciated 9.1% through the end of 2Q00, as compared
to
the S&P 500, which is down 1.0% during the same time period.  Including the
cash distributions, EOTTs return has been close to 16% so far this year.

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___________________________Company Description :  - -EOTT is one of the
largest independent crude oil gathering and marketing companies in North
America.  Crude is gathered from over 6,000 producers with ownership of over

40,000 wells.  Common carrier and proprietary pipelines transport EOTT and
third party crude to market over a network of over 8,200 miles of
facilities.
This network moves over 500,000 barrels per day.  EOTT also operates a small

gas processing plant and associated fractionation facilities to provide
blending stock for upgrading heavier, less valued crudes gathered in
California.

Margaret A. Connerty (212-526-3896) - mconnerty@lehman.com
____________________________________________________________________________
__
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Disclosure Legend:  A-Lehman Brothers Inc. managed or co-managed within the
past three years a public offering of securities for this company.  B-An
employee of Lehman Brothers Inc. is a director of this company.  C-Lehman
Brothers Inc. makes a market in the securities of this company.
This document is for information purposes only. We do not represent that
this
information is complete or accurate. All opinions are subject to change. The

securities mentioned may not be eligible for sale in some states or
countries.
This document has been prepared by Lehman Brothers Inc., Members SIPC, on
behalf of Lehman Brothers International (Europe), which is regulated by the
SFA.