Bruce Connery. Bank of America Energy Conference November 15, Vice President, Investor & Public Relations

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1 Bruce Connery Vice President, Investor & Public Relations Bank of America Energy Conference November 15, 2005 the place to work the neighbor to have the company to own

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, our ability to implement and achieve our objectives in the long-range plan, including achieving our debt-reduction targets; changes in reserve estimates based upon internal and third party reserve analyses; our ability to meet production volume targets in our Production segment; uncertainties associated with exploration and production activities; our ability to successfully execute, manage, and integrate acquisitions; uncertainties and potential consequences associated with the outcome of governmental investigations, including, without limitation, those related to the reserve revisions and natural gas hedge transactions; the uncertainties associated with potential legal and other action the Navajo Nation may take in the future; the ultimate extent of the damages to our pipeline and production facilities and those of other producers caused by hurricanes; the ability to repair any hurricane damage to such pipeline and production facilities and to restore transportation services and oil and gas production deliveries on a timely basis and the costs of effectuating such repairs and constructing replacement facilities; the receipt of insurance proceeds in connection with damage caused by hurricanes; outcome of litigation, including shareholder derivative and class actions related to reserve revisions and restatements; our ability to comply with the covenants in our various financing documents; our ability to obtain necessary governmental approvals for proposed pipeline projects and our ability to successfully construct and operate such projects; the risks associated with recontracting of transportation commitments by our pipelines; the uncertainties associated with governmental regulation, including regulatory uncertainties associated with pipeline rate cases; actions by the credit rating agencies; the successful close of our financing transactions, including the issuance of equity; our ability to successfully exit the energy trading business; our ability to close our announced asset sales on a timely basis; changes in commodity prices for oil, natural gas, and power; inability to realize anticipated synergies and cost savings associated with restructurings and divestitures on a timely basis; 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; political and currency risks associated with international operations of the company and its affiliates; 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 Our Purpose El Paso Corporation provides natural gas and related energy products in a safe, efficient, and dependable manner 3

4 El Paso Investing Credentials Premier natural gas pipeline franchise One of largest independent producers Turnaround now complete Simpler story, cleaner earnings in 2006 Significant leverage to favorable commodity fundamentals Excellent progress on asset sales/debt reduction Leader in corporate governance 4

5 Significant Progress in Turnaround Liquidity Stressed December 2003 Strong Current Net debt Asset sales Range of businesses $20.5 billion Long-Range Plan (LRP) goal: $3.3 billion $3.9 billion Incremental goal: $1.2 billion $1.6 billion Pipes, E&P, marketing & trading, petroleum, chemical, domestic & international power, midstream, others $17.1 billion* $4.3 billion sold under LRP $1.5 billion announced or closed Pipes, E&P, marketing (out of or exiting all other) *As of September 30,

6 Asset Sales ($ Millions) Closed 2005 to date* Closed through September 30 Closed post September 30 Total closed 2005 to date Proceeds $1, $1,913 Non-recourse Debt $ $604 Expected to close in 2005 or early 2006 $ 284 $1.5 billion closed or announced toward incremental goal of $1.2 billion $1.6 billion Assets not sold or under contract Central American power plants 3 domestic power plants *As of November 3,

7 Debt Progression Net Debt Sept. 30 Net debt June 30, 2005 $ 15,938 Medicine Bow acquisition, net of cash acquired 845 Cash collateral requirements in 3Q Asset sales and other (400) $ Millions Dec. 31 Assumptions Asset sales closed post Sept. 30 (669) Pending asset sales (220) Return of collateral* (343) Equity issued (0 800) Total debt reduction $1,232 2,032 Net debt September 30, 2005 $ 17,037 Forecast 12/31/05 net debt at $15.0 billion to $15.8 billion Depends primarily on collateral position, asset sales, and timing of equity issuance Note: See appendix for discussion of Non-GAAP terms *Assuming no change in price curve at September 30,

8 Equity Offering El Paso does not have an active shelf Will file Form S-1 soon to begin SEC process Retain full flexibility of timing No pressure for hitting year-end debt target Stage set for strong

9 Pipeline Group Overview

10 Leading Natural Gas Infrastructure Key Statistics 58,000 miles 1/3 of daily U.S. throughput 40% of U.S. growth capital in 2005* Distinguishing Features Elba Island Unmatched connectivity Superior market presence Favorable recontracting position *Source: Energy Information Association Outstanding growth potential 10

11 El Paso s Pipelines Unmatched for Growth Projects WIC Mainline Expansion $63 MM MMcf/d EPNG Cadiz to Ehrenberg (Line 1903) $74 MM WIC Piceance Lateral Expansion 0.5 $120 MM December MMcf/d December MMcf/d EPNG Line 2000 Power Up $136 MM June MMcf/d TGP/EPNG Sonora Project $TBD 2009 TBD MMcf/d WIC Medicine Bow Expansion $58 MM MMcf/d EPNG Phoenix East Valley Line $49 MM September MMcf/d TGP LPG Reynosa $44 MM (50%) ,000 Bbl/d ANR Westleg $48 MM MMcf/d Cheyenne Plains $416 MM MMcf/d CIG Raton Basin Expansion $91 MM MMcf/d Completed Projects FERC Certificated TGP/ANR Supply Attachment Projects $113 MM ANR Wisconsin 2006 Expansion $46 MM MMcf/d ANR Northleg $13 MM MMcf/d ANR Eastleg $17 MM MMcf/d SNG North and South System $445 MM MMcf/d TGP/ANR Eugene Island 371 $14 MM April MMcf/d TGP LA Deepwater Link $28 MM April MMcf/d Signed PA s Future Projects TGP Northeast ConneXion NY/NJ $24 MM MMcf/d TGP Northeast ConneXion New England $102 MM MMcf/d SNG Cypress Expansion $240 MM MMcf/d FGT Phase VII $63 MM May MMcf/d Seafarer Pipeline $354 MM MMcf/d TGP Distrigas $35 MM MMcf/d SNG Elba Island Expansion $157 MM 1Q Bcf 11

12 Continental Connector Project Connectivity Strength Leverages existing coast-to-coast footprint May be economically scaled from 1-2 Bcf/d Producers gain access to growing northeastern and southeastern markets Markets gain superior supply diversity Strong record of ontime, on-budget major project development 12

13 Enogex Agreement Accelerates Project Greensburg Custer Bennington Leased Capacity Path Continental Connector KS OK TX Perryville LA MO AR MS ANR Pipeline Cheyenne Plains OGE/Enogex Pipeline Key Benefits Uses Enogex s extensive system in Oklahoma Eliminates 180 miles of new pipeline Connectivity with Mid-Continent producers Scalable Accelerates in-service date to winter 13

14 Production Company Overview

15 El Paso Production Well Positioned in Key U.S. Natural Gas Basins 15

16 Dramatic Shift Towards Onshore Production GOM 41% International 6% Onshore GOM 25% 23% Onshore 48% TX Gulf TX Gulf Coast Coast 34% 23% 1Q 2004 September 2005 Key takeaways Onshore production almost doubles as percentage of total Business more predictable R/P goes from 6.2 to 7.4 How was this accomplished? Shifted capital towards Onshore mid-2004 Successful drilling program Medicine Bow accelerates process 80% proved reserves in core Onshore areas *Includes proportionate share of Four Star Production of 72 MMcfe/d which is reported as an equity investment; also includes hurricane impact of 86 MMcfe/d 16

17 Production Region Report Card Region Onshore GOM Texas Gulf Coast International Comments Solid growth; deep inventory Excellent turnaround; success in deep shelf and Catapult Turnaround complete: building inventory of lowrisk prospects Solid exploration and development opportunities Business creating solid returns at plan gas price ($4.75) 17

18 Production Volume Trend * September volumes avg. 855 MMcfe/d, adjusted for hurricanes* MMcfe/d Q Q Q Q 2005 Texas Gulf Coast Onshore Offshore Hurricane deferral International *Includes proportionate share of Four Star production which is reported as an equity investment 18

19 Production Company Summary Program creating value at plan pricing Robust PVR at current pricing Business becoming more predictable More onshore production Longer R/P Strong outlook for

20 Outlook for 2006

21 Substantial Leverage to Natural Gas & Oil Prices Assumed Gas Price $/MMBtu $5 $6 $7 $8 $9 $10 Potential 2006 Impact $ MM Cash Impact $1,803 $1,953 $2,105 $2,377 $2,649 $2,891 $10 gas price implies $670 MM incremental cash vs. $5 Cash Loss from Legacy Hedges ($90) ($173) ($257) ($341) ($424) ($508) Current Strip Assumptions: 330 Bcfe*; 10% basis differential and oil priced at 6x gas *For illustrative purposes: Will provide 2006 guidance in January; assumes high end of 2005 exit rate; includes equity volumes 21

22 Summary E&P turnaround complete Pipeline growth story continues Asset sales program continues to deliver/delever On balance high gas prices positive Growing leverage to price as legacy hedges expire Interim working capital stresses addressed Stage set for strong

23 Appendix

24 Disclosure of Non-GAAP Financial Measures The SEC s Regulation G applies to any public disclosure or release of material information that includes a non-gaap financial measure. In the event of such a disclosure or release, Regulation G requires (i) the presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and (ii) a reconciliation of the differences between the non-gaap financial measure presented and the most directly comparable financial measure calculated and presented in accordance with GAAP. The required presentations and reconciliations are provided herein. Additional detail regarding non-gaap financial measures can be reviewed in our full operating statistics posted at in the Investors section. El Paso uses the non-gaap financial measure earnings before interest expense and income taxes or EBIT to assess the operating results and effectiveness of the company and its business segments. The company defines EBIT as net income (loss) adjusted for (i) items that do not impact its income (loss) from continuing operations, such as extraordinary items, discontinued operations, and the impact of accounting changes; (ii) income taxes; (iii) interest and debt expense; and (iv) distributions on preferred interests of consolidated subsidiaries. The company excludes interest and debt expense and distributions on preferred interests of consolidated subsidiaries so that investors may evaluate the company s operating results without regard to its financing methods or capital structure. El Paso s business operations consist of both consolidated businesses as well as substantial investments in unconsolidated affiliates. As a result, the company believes that EBIT, which includes the results of both these consolidated and unconsolidated operations, is useful to its investors because it allows them to evaluate more effectively the performance of all of El Paso s businesses and investments. Net Debt is defined as El Paso's total Financing Obligations as disclosed on the company's consolidated balance sheet net of cash and cash equivalents. Net Debt is an important measure of the company's total leverage. Investor s should be aware that some of El Paso s cash is restricted and not available for debt repayment. Total Liquidity is defined as cash that is easily available for general corporate purposes and available capacity under El Paso's $3 billion credit agreement. Total Liquidity demonstrates the company s ability to meet current obligations and commitments. Per-unit total cash expenses equal total operating expenses less DD&A and other non-cash charges divided by total production. It is a valuable measure of operating efficiency. El Paso believes that the non-gaap financial measures described above are also useful to investors because these measurements are used by many companies in the industry as a measurement of operating and financial performance and are commonly employed by financial analysts and others to evaluate the operating and financial performance of the company and its business segments and to compare the operating and financial performance of the company and its business segments with the performance of other companies within the industry. These non-gaap financial measures may not be comparable to similarly titled measurements used by other companies and should not be used as a substitute for net income, earnings per share or other GAAP measurements. 24

25 Forward-looking Non-GAAP Statement Certain Non-GAAP financial measures included herein are presented on a forward-looking basis. Regulation G requires that forward-looking Non-GAAP financial measures be reconciled to the appropriate forward-looking GAAP financial measure. In El Paso s budgeting process, the company does not forecast certain financial statement line items such as segment net income, which are required to properly reconcile our forward-looking Non-GAAP financial measures. As a result, El Paso has not included in this presentation any reconciliations of the company s forward-looking Non-GAAP financial measures. Please note that the unavailable reconciling items could significantly impact the company s future net income and cash flows. 25

26 Production Related Derivative Schedule Natural Gas Notional Volume (Bcf) Average Average Hedge Price Cash Price ($/MMBtu) ($/MMBtu) Notional Volume (Bcf) Average Average Hedge Price Cash Price ($/MMBtu) ($/MMBtu) Notional Volume (Bcf) Average Hedge Price ($/MMBtu) Notional Volume (Bcf) Average Hedge Price ($/MMBtu) Notional Volume (Bcf) Average Hedge Price ($/MMBtu) Designated Fixed Price - Legacy $6.89 $ $6.36 $ $ $ $3.74 Fixed Price 0.3 $5.78 $ $5.28 $ $5.23 Economic Fixed Price 4.1 $8.07 $ $8.11 $8.11 Ceiling 60.0 $9.50 $ $ $ $8.75 Floor 12.0 $6.00 $ $7.00 $ $ $ $ $6.00 Crude Oil Notional Volume (MMBbl) Average Average Hedge Price Cash Price ($/Bbl) ($/Bbl) Notional Volume (MMBbl) Average Average Hedge Price Cash Price ($/Bbl) ($/Bbl) Notional Volume (MMBbl) Average Hedge Price ($/Bbl) Notional Volume (MMBbl) Average Hedge Price ($/Bbl) Designated Fixed Price 0.1 $35.15 $ $35.15 $ $35.15 Economic Fixed Price 0.2 $59.20 $ $58.81 $58.81 Ceiling 1.0 $ $57.03 Floor 1.0 $ $55.00 See El Paso s Form 10-Q filed 11/7/05 and Form 10-K/A filed 6/15/05 for additional information on the company s derivative activity 1 Hedge price and cash price are identical for Note: As of September 30,

27 Current Collateral and Recovery* Current Postings Return of Collateral 2,053 $ Millions 1,445 $1,075 to be recovered by the end of Gas Power Total Gas Power Total Gas Power Total Gas Power Total Gas Power Total Sep. 30, Q E 2007E 2008E & Beyond Letter of credit Cash *Assuming no change in price curve at September 30,

28 Creating More Value in Shallower Objectives TGC Frio Well cost: $1.3 MM Reserves: 1.1 Bcfe F&D costs: $1.18 Mcfe Upper Vicksburg Well cost: $1.7 MM Reserves: 2.0 Bcfe F&D costs: $0.85 Mcfe 8,500 Historical focus was lower Vicksburg Multi-pay environment offers attractive, shallower options Lower Vicksburg Well cost: $7.6 MM Reserves: 5.3 Bcfe F&D costs: $1.43 Mcfe Note: Estimates based on per well data for a South Texas well Sand Resistivity (HC Indicator) 12,000 19,000 PVR increases from 1.2 to

29 Cost Reductions Continue Greenway lease s approximately $50 MM annual costs ending in 2007 Political risk insurance cost which peaked at more than $25 MM per year essentially eliminated with sale of foreign assets D&O insurance annual expense of $29 MM reduced by nearly one-half after 2005 Outside legal costs of approximately $55 MM per year expected to come down over time Accounting and audit annual costs of $45 MM to be trimmed by one-third after 2005 Trading costs reduce as book continues to shrink 29

30 Bruce Connery Vice President, Investor & Public Relations Bank of America Energy Conference November 15, 2005 the place to work the neighbor to have the company to own