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  • 1. a meaningful company doing meaningful work delivering meaningful results Mark Leland Executive Vice President and Chief Financial Officer Credit Suisse Leveraged Finance Conference March 27, 2008
  • 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 1995. 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, changes in unaudited and/or unreviewed financial information; our ability to implement and achieve our objectives in the 2008 plan, including earnings and cash flow targets; the effects of any changes in accounting rules and guidance; our ability to meet production volume targets in our E&P segment; uncertainties and potential consequences associated with the outcome of governmental investigations, including, without limitation, those related to the reserve revisions; outcome of litigation; 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; regulatory uncertainties associated with pipeline rate cases; actions by the credit rating agencies; the successful close of our financing transactions; 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 and basis differentials for oil, natural gas, and power and relevant basis spreads; 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. Certain of the production information in this presentation include the production attributable to El Paso’s 49 percent interest in Four Star Oil & Gas Company (“Four Star”). El Paso’s Supplemental Oil and Gas disclosures, which are included in its Annual Report on Form 10-K, reflect its proportionate share of the proved reserves of Four Star separate from its consolidated proved reserves. In addition, the proved reserves attributable to its proportionate share of Four Star represent estimates prepared by El Paso and not those of Four Star. Cautionary Note to U.S. Investors—The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only proved reserves that a company has demonstrated by actual production or conclusive formation tests to be economically and legally producible under existing economic and operating conditions. We use certain terms in this presentation that the SEC's guidelines strictly prohibit us from including in filings with the SEC. U.S. Investors are urged to consider closely the disclosures regarding proved reserves in this presentation and the disclosures contained in our Form 10-K for the year ended December 31, 2007, File No. 001-14365, available by writing; Investor Relations, El Paso Corporation, 1001 Louisiana St., Houston, TX 77002. You can also obtain this form from the SEC by calling 1-800-SEC-0330. Non-GAAP Financial Measures This presentation includes certain Non-GAAP financial measures as defined in the SEC’s Regulation G. More information on these Non-GAAP financial measures, including EBIT, EBITDA, and the required reconciliations under Regulation G, are set forth in this presentation or in the appendix hereto. El Paso defines Resource Potential as subsurface volumes of oil and natural gas the company believes may be present and eventually recoverable. The company utilizes a net, geologic risk mean to represent this estimated ultimate recoverable amount. 2
  • 3. Leading Positions in Two Core Businesses Interstate Pipelines Exploration & Production 3
  • 4. Seizing Opportunities Pipelines Favorable Macro Outlook • Assets well positioned • Increasing demand for natural gas – Rockies expansions: CIG, WIC, Ruby • Strong commodity prices – LNG related: Elba Express, Cypress • Infrastructure opportunities with shifting supply source E&P Environmental • Improved portfolio • Carbon emissions • Increased profitability • Power generation turning to natural gas • Drilling success 4
  • 5. Sustainable Long-Term Growth Pipelines E&P 6%–8% EBIT Growth 2007–2012 8%–12% production growth 2007–2010 • 3.1 Tcfe proved reserves* • Unprecedented infrastructure opportunities • Multi-year drilling inventory • Committed project inventory nearly $4 billion *Includes proportionate share of Four Star equity volumes 5
  • 6. El Paso Pipeline Group North America’s Leading Natural Gas Pipeline Company Tennessee Wyoming Gas Pipeline Colorado Interstate Interstate Gas Cheyenne Mojave Plains Pipeline Pipeline Southern Natural Gas Elba Island El Paso LNG Natural Gas Mexico Florida Gas Ventures Gulf LNG Transmission (50%) (50%) • 19% of total U.S. interstate pipeline mileage • 24 Bcf/d capacity (16% of total U.S.) • 17 Bcf/d throughput (28% of gas delivered to U.S. consumers) Source: El Paso Corporation based on 2007 data 6 Note: Includes El Paso Corporation and El Paso Pipeline Partners, L.P.
  • 7. Well Positioned Assets Major Flow Changes 2007–2016 Canada (Bcf/d) Declining exports -2.0 to U.S. -0.7 0.6 -0.8 -1.1 -1.3 -1.0 Eastern Demand Growth Especially Southeast 2.2 2.7 1.5 1.1 0.6 3.8 Rockies Increasing supplies 4.9 leaving region 1.2 0.6 2.1 5.6 LNG 0.6 Expanding current facilities, Gulf Coast additions 0.4 7 Source: El Paso Pipeline Group December 2007 Macro
  • 8. Committed Growth Backlog Approaching $4 Billion WIC Medicine Bow TGP Concord Expansion $21 MM $32 MM Nov 2009 July 2008 CIG High Plains Pipeline 30 MMcf/d 330 MMcf/d $196 MM (100%) November 2008 WIC Piceance 900 MMcf/d Lateral CP Coral Expansion Elba Expansion III & $62 MM SNG SESH –Phase I $23 MM Elba Express 4Q 2009 $137 MM CIG Totem Storage July 2008 $1.1 Billion 219 MMcf/d Jun 2008 $120 MM (100%) 70 MMcf/d 2010–2013 140 MMcf/d July 2009 1.2 Bcf/d 200 MMcf/d SNG Cypress Phase II & III $20 MM/$82 MM May 2008/ Jan 2011 TGP Carthage 114 MMcf/d/ 161 MMcf/d Expansion $39 MM May 2009 100 MMcf/d SNG South System III/ SESH Phase II Gulf LNG $286 MM/ $33 MM $1.1 Billion (100%) 2010–2012 Oct 2011 375 MMcf/d/ 360MMcfd El Paso Pipeline Partners 1.3 Bcf/d El Paso FGT Phase VIII Expansion $2+ Billion (100%) 2011 0.8 Bcf/d 8 Note: El Paso Pipeline Partners owns 10% of SNG and CIG
  • 9. FGT Phase VIII Added to Committed Expansions Proposed Pipeline Expansion GA AL FGT $2+ billion (100%) • • 50% EP, 50% SUG • 500 miles • 0.8 Bcf/d capacity FL • PA with FPL for 0.4 Bcf/d for 25-year term • 2011 in-service 9
  • 10. Leveraging LNG Experience Elba Island LNG Gulf LNG Savannah, GA Pascagoula , MS • $1.1 billion terminal expansion and • $1.1 Billion (100%); 50% EP Elba Express Pipeline • $870 MM non-recourse financing • 8.4 Bcf incremental storage capacity completed • 0.9 Bcf/d incremental send-out capacity • 1.3 Bcf/d base sendout • Fully contracted with Shell and BG • Fully contracted with Angola LNG and ENI • Current expansion will double facility • EPC with Aker Kvaerner by 2012 • 2011 In-service Investing more than $2 billion on LNG and related projects 10
  • 11. Managing Capital Costs Major Greenfield Pipeline Project Costs 30%–35% 35%–40% 25%–35% • Pipe • Contractor-related • Right-of-way • Engineering studies • Other Primary Party $ Billion At-Risk for Capex $1.7 Contractor 0.8 Customer 1.3 El Paso $3.8 11
  • 12. El Paso Pipeline Partners • Primary focus is natural gas transmission and storage assets • Three FERC regulated interstate pipelines: – 100% of WIC: 800 miles, 2.7 Bcf/d – 10% of CIG: 4,000 miles, 3.0 Bcf/d – 10% of SNG: 7,600 miles, 3.7 Bcf/d • Demand-based revenues from high-quality customers with strong credit profiles • Several organic expansions underway WIC SNG CIG Diverse, Growing Supply Regions High Connectivity to Growing Markets 12
  • 13. Pipeline Summary • High-quality, committed growth backlog – Approaching $4 billion • Focus on project execution • Manage capital costs • Long-term EBIT growth expectation 6%–8% – Higher with continued success 13
  • 14. El Paso E&P: Top 10 Independent Total Company Nile • Well situated in key U.S. Delta Sinai basins Onshore Gulf Egypt • Focused on resource & of Egypt • 51% of 2007 production unconventional programs Suez • Primarily coal seam and • ~80% natural gas tight-gas programs Egypt • Low risk repeatable plays • Onshore conventional exploration Brazil • 1MM acres • First drilling 2H 2008 Texas Gulf Coast Rio de Janeiro • 25% of 2007 production Brazil • Low-to-medium risk GOM/SLA tight–gas programs • 2 discoveries is 2007 • 22% of 2007 production • 15,000–20,000 BOE/D • Medium to high-risk beginning 2H 2009 exploration • 20 undrilled prospects • Large acreage position • 2% of 2007 production Note: 2007 production percentages include equity in Four Star 14
  • 15. 2007 YE Proved Reserves—3.1 Tcfe Solid Growth Onshore & TGC 18% Reserve Growth (Tcfe) 3.1 TGC 550 Bcfe 2.6 18% Int’l 247 Bcfe 8% GOM Onshore 269 Bcfe 2,043 Bcfe 9% 65% 2006 2007 72% of reserves proved developed 15 Note: Includes proportionate share of Four Star
  • 16. 97% Drilling Success Rate 2007 Gross Wells Actual Completed Success Rate High PC < 40% 6 50% High Impact Exploration Risk PC 40%–80% Med 29 76% Medium Risk Development and Exploration PC > 80% 568 99% Low Low Risk Domestic Development 603 97% Success Rate by Division Onshore 99% Texas Gulf Coast 92% Gulf of Mexico 46% International 100% 16
  • 17. Significant Undrilled Inventory • 6.1 Tcfe unrisked non-proved resources 3,400 • 2.8 Tcfe risked non-proved resources • Risked resources grew 12% in 2007 Resource Potential (Bcfe) • Excludes domestic divestiture properties Non-Proved Risked Unrisked 2,130 1,460 869 835 495 530 PUD* Unconventional Conventional Conventional Low-Risk Higher-Risk Raton, Arkoma, Black Warrior, Arklatex, Rockies, GOM, TGC, New Albany TGC, Brazil Int’l Exploration, Brazil, Egypt *As of 12/31/07 and Includes proportionate share of Four Star 17
  • 18. E&P Production Solid Growth Trajectory Through 2010 MMcfe/d R CAG %–12% 8 870–930 862 798 20082 2007 2007 2009 2010 Pro Forma1 Note: Includes proportionate share of Four Star 1 Excludes volumes from domestic assets being sold; assumes full year of Peoples 18 2 Assumes 25 MMcfe/d annualized contributed by the divestiture assets prior to closing
  • 19. E&P Profitability Has Grown Faster Than Peers EBITDA*/Mcfe, Including Hedging $5.75– $6.04 $6.00 $5.84 $5.59 $5.57 $4.82 2006 2007 2008E Peer Average El Paso Peer group: APA, APC, CHK, DVN, EOG, FST, NBL, NFX, PXD, XEC, XTO Actual results from Peer company reports for 2006 and 2007; analyst models 2008E 19 *EBITDA excludes exploration and dry hole expense for successful efforts companies
  • 20. E&P Summary • Growing reserves and production • Continued improvement in cost structure • High grading portfolio improves overall performance – Divestitures on-track • Solid inventory provides visible long term growth E&P moving towards top-tier performance 20
  • 21. 2008 Natural Gas and Oil Hedge Positions Positions as of February 22, 2008 (Contract months January 2008 – Forward) 188 TBtu Average cap $10.21/MMBtu Ceiling 155 TBtu 33 TBtu 2008 Gas $10.75 ceiling/ $7.65 $8.00 Floor fixed price Floors 188 TBtu Balance at Average floor $7.94/MMBtu Market Price 3.7 MMBbls Ceiling Average cap $81.44/Bbl 2.8 MMBbls 0.9 MMBbls 2008 Oil $89.58 $57.03 ceiling/ fixed price $55.00 floor Floors 3.7 MMBbls Average floor $80.94/Bbl 21 Note: See full Production-Related Derivative Schedule in Appendix
  • 22. Substantial Leverage to Higher Commodity Prices $ Earnings Per Share $1.62– $1.72 $1.70 $1.44– $1.54 $1.50 $1.25– Base Case $1.35 $1.30 $1.00– $1.10 $1.10 $0.90 $0.70 $0.50 Assumes Assumes Assumes Assumes $7.50 Gas $9.00 Gas $10.00 Gas $11.00 Gas 22 Note: All data includes $70.00 WTI assumption
  • 23. Improved Financial Strength Proforma Total Debt • Four consecutive years $22,282 of debt reduction $19,196 $18,234 • Debt down 17% vs. 2006 $15,430 • Interest expense down $12,814 approximately $300 million vs. 2006 • Minimal debt maturities in 2008 2007 2006 2003 2005 2004 Note: debt and interest expense include discontinued operations and assets held for sale 23
  • 24. Visible Long-Term Growth • Focus on growth opportunities • Pipelines working to expand committed inventory • E&P more profitable, more focused, increased opportunities post high grading • Committed to grow El Paso Pipeline Partners • Visible multi-year growth for both businesses – Pipelines 6%–8% EBIT growth – E&P 8%–12% production growth 24
  • 25. a meaningful company doing meaningful work delivering meaningful results Mark Leland Executive Vice President and Chief Financial Officer Credit Suisse Leveraged Finance Conference March 27, 2008
  • 26. Appendix 26
  • 27. 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. 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. EBITDA is defined as EBIT plus depreciation, depletion, and amortization. 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 and EBITDA, which include 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. El Paso defines Resource Potential as subsurface volumes of oil and natural gas the company believes may be present and eventually recoverable. The company utilizes a net, geologic risk mean to represent this estimated ultimate recoverable amount. 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. 27
  • 28. 28
  • 29. Reconciliation of EBIT/EBITDA $ Millions Twelve Months Ended Twelve Months Ended December 31, 2006 December 31, 2007 EBITDA $ 2,797 $2,828 Less: DD&A 1,047 1,176 EBIT 1,750 1,652 Interest and debt expense (1,228) (994) Income before income taxes 522 658 Income taxes (benefit) (9) 222 Income from continuing operations 531 436 Discontinued operations, net of taxes (56) 674 Net Income 475 1,110 Preferred stock dividends 37 37 Net income available to common stockholders $ 438 $1,073 29
  • 30. Reconciliation of Exploration & Production EBITDA/Mcfe $ Millions, Except $/Unit Twelve Months Ended Twelve Months Ended December 31, 2006 December 31, 2007 EBIT $ 640 $ 909 Add: DD&A 645 780 EBITDA $ 1,285 $ 1,689 MMcfe 266,518 289,242 EBITDA/Mcfe $ 4.82 $ 5.84 30
  • 31. Production-Related Derivative Schedule 2008 2009 2010 2011–2012 Notional Avg. Hedge Notional Avg. Hedge Notional Avg. Hedge Notional Avg. Hedge Natural Gas Volume Price Volume Price Volume Price Volume Price (TBtu) ($/MMBtu) (TBtu) ($/MMBtu) (TBtu) ($/MMBtu) (TBtu) ($/MMBtu) Designated—EPEP Fixed price—Legacy 4.6 $ 3.42 4.6 $ 3.56 4.6 $3.70 6.8 $3.88 Fixed price 21.0 $ 8.37 Ceiling 121.1 $ 10.84 Floor 121.1 $ 8.00 Economic—EPEP Fixed price 7.3 $ 8.24 Ceiling 33.8 $ 10.43 Floor 33.8 $ 8.00 Economic—EPM Ceiling 16.8 $ 8.75 Floor 16.8 $ 6.00 Avg. ceiling 187.8 $ 10.21 21.4 $ 7.63 4.6 $3.70 6.8 $3.88 Avg. floor 187.8 $ 7.94 21.4 $ 5.48 4.6 $3.70 6.8 $3.88 2008 Notional Avg. Hedge Crude Oil Volume Price (MMBbls) ($/Bbl) Designated—EPEP Fixed price 2.79 $ 89.58 Economic—EPM Ceiling 0.93 $ 57.03 Floor 0.93 $ 55.00 Avg. ceiling 3.70 $ 81.44 Avg. floor 3.70 $ 80.94 31 Note: Positions are as of February 22, 2008 (contract months: January 2008–forward)
  • 32. Debt and Interest Reconciliation $ Millions 2006 2003 2004 2005 $ 21,732 $ 19,196 $ 17,266 $ 14,689 Debt—as presented in most recent Form 10-K Debt—discontinued operations & assets held for sale 743 741 ANR 174 225 Power 376 Petroleum Markets Proforma debt $ 22,282 $ 19,196 $ 18,234 $ 15,430 2006 2007 $ 1,228 $ 994 Interest expense—as reported Interest expense—discontinued operations 65 10 ANR 14 Power $ 1,307 $ 1,004 Proforma interest expense 32