El Paso Corporation/ Peoples Energy Production Company Acquisition Review

Transcription

1 a meaningful company doing meaningful work delivering meaningful results El Paso Corporation/ Peoples Energy Production Company Acquisition Review August 17, 2007

2 Cautionary Statement Regarding Forward-looking Statements This presentation includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, the satisfactory completion of the conditions precedent in the purchase and sale agreement, receipt of any necessary government approvals or third party consents required to close the transaction, the ability to implement and achieve our objectives in the 2007 plan; changes in reserve estimates based upon internal and third party reserve analyses; our ability to successfully execute, manage and integrate acquisitions; uncertainties associated with exploration and production activities; the successful close of our financing transactions; changes in commodity prices for oil, natural gas, and power; general economic and weather conditions in geographic regions or markets served by the company and its affiliates, or where operations of the company and its affiliates are located; the uncertainties associated with governmental regulation; competition; and other factors described in the company's (and its affiliates') Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise. 2

3 On the Path to Top-Tier Performance Credibility Capability Visibility Production on target Cash operating costs are down Capital on track; creating value Added staff New key leadership Increased drilling activity Portfolio high-grading Five-year inventory International progress 3

4 Peoples Production Acquisition Accelerates Our Progress Key statistics: $875 MM acquisition capital 305 Bcfe proved reserves 42% proved developed producing 72 MMcfe/d production 12 year R/P >600 proved and probable locations Assets primarily located in ArkLaTex and TGC regions Expect to close in 3Q

5 Transaction Rationale Strategic Fit Improves predictability of performance Improves visibility on growth Very material in combination with planned divestitures Operational Fit 80% of reserves in EP core areas (50% ArkLaTex, 30% TGC) Increases scale and efficiency in core areas Accelerates growth and builds project inventory Talent Fit 5

6 Excellent Fit with EP Other Production: 15 MMcfe/d Proved reserves: 61 Bcfe OK ArkLaTex Production: 25 MMcfe/d Proved reserves: 146 Bcfe LA MS Total Peoples Energy Production Company Production: 72 MMcfe/d Reserves: 305 Bcfe TX Texas Gulf Coast Production: 32 MMcfe/d Proved reserves: 98 Bcfe Peoples Production holdings El Paso operations* *Includes Four Star properties 6

7 Compliments EP Divestitures Determine areas where we are advantaged/ disadvantaged Focus people and capital on core properties Divest non-core properties Announced plan to sell Bcfe Weighted towards GOM and TGC Peoples Production acquisition accelerates high-grading 7

8 Directional Improvements Current Portfolio Divestitures + Peoples Production Program execution Inventory level and quality Operating and capital efficiency Staffing levels More predictable, visible growth 8

9 Summary Significant progress on portfolio upgrade in short period of time Acquisition accelerates improvement Good fit in every respect Accretive to underlying asset performance Offsets reserve impact of divestitures On path to becoming top-tier E&P company 9

10 a meaningful company doing meaningful work delivering meaningful results El Paso Corporation/ Peoples Energy Production Company Acquisition Review August 17, 2007