El Paso Corporation




           Fourth Quarter 2008
Financial & Operational Update
                February 26, 2009
Cautionary Statement
Regarding Forward-looking Statements
This presentation includes certain forward-looking statements an...
Our Purpose



       El Paso Corporation provides
       natural gas and related energy
      products in a safe, efficie...
Our Vision & Values




      the place to work
 the neighbor to have
  the company to own




                          4
2008 Accomplishments
Pipelines              Project execution                        Placed 7 projects in-service
        ...
Managing to the Current Realities

   Plenty of challenges—capital markets, low
   commodity prices, uncertain economy
   ...
Key Priorities

                 Pipelines                                    Exploration & Production
   Construct backlo...
Financial Results
Fourth Quarter & Annual
2008 Financial Results
                                 Annual                                 Fou...
Items Impacting 4Q 2008 Results
                                                                                          ...
Business Unit Contribution
                                                                                               ...
Marketing Financial Results
                                                                          $ Millions

        ...
Operating Cash Flow and Capital Investment
                                                                               ...
Recent Significant Financing Activities

   El Paso Corp. 5-year, $500 MM 12% Notes (15.25% yield)
      Ended high-yield ...
Substantial Increase in Liquidity
                                                       $ Billions

                     ...
Increased Liquidity Has Reduced
EP Borrowing Costs
                15
                14
                13
              ...
Excellent 2009 Hedge Positions
                                                                                     Full-Y...
2010 Natural Gas Hedge Positions
                                                                      Positions as of Feb...
2009 Guidance Assumptions

   $5.00/MMBtu (NYMEX); $40.00/Bbl (WTI)

   $2.7 billion–$3.1 billion capital
        Pipeline...
2009 Financial Targets
                                                               $ Billions, Except EPS and Sensitivi...
Liquidity Outlook
                                                                                                   $ Bil...
Summary


 Significant progress on building liquidity
    As reflected by EP bond spreads
 2009 capital program reflects b...
Pipeline Group
2008 Highlights

   Favorable 4Q and YTD EBIT
      4% increase from 4Q 2007
   Throughput increase
   Progress on growth
...
Pipeline Group Financial Results
                                                 Quarters Ended                 Twelve Mo...
Throughput Growth Varied by Region
                                                                    Full-year % Increas...
~$700 MM Projects Placed in Service in 2008

                                         WIC Kanda Lateral
                  ...
Committed Growth Backlog:
Large, Profitable
              ~$8 billion capex; construct at 7x run rate EBITDA

            ...
Construction Risk Management

                        El Paso Capital
                          ($ Billions)    Steel     ...
Pipeline Summary


   Stability from demand-based revenues

   Visible multi-year growth profile

   Highly focused on exe...
Exploration & Production
2008 Highlights


            $2.3 billion adjusted EBITDA
            817 MMcfe/d production1 (pro forma)
            195...
E&P Results
                                                             Quarters Ended                     Twelve Months ...
Total Cash Costs
                                                                                  $/Mcfe
                ...
FY 2008 Production
                                                                                                       ...
YE 2008 Reserves
                                                                                                         ...
Domestic Reserve Metrics
       Reserve Replacement Costs                                      Reserve Replacement Ratio
 ...
27% Unproven Inventory Growth
                                        Net Risked Resource Inventory (Bcfe)

              ...
2009 Capital Program
  $0.9 billion–$1.3 billion
                                 Capital Spending ($ MM)
  capital progra...
Declining Domestic Drilling Activity
                                             Operated Drilling Rig Count
            ...
Arklatex Programs Progressing
       Haynesville Shale
     (currently producing 27 MMcfe/d
         as of February 21, 20...
Arklatex Programs Progressing
             Cotton Valley Horizontal
                 (currently producing 10 MMcfe/d
     ...
Egypt Update
                   Fields
                        Gas
                        Oil




                       ...
Brazil Update


 Camarupim                                                      BM-ES-5
                                  ...
E&P Summary


  2009 capital program focused on
  low-risk, value-adding programs

  Maintain capital discipline while see...
Summary


  Solid results in volatile market

  Balancing growth with financial stability

  Managing business for future ...
El Paso Corporation




           Fourth Quarter 2008
Financial & Operational Update
                February 26, 2009
Appendix




           48
Disclosure of Non-GAAP
Financial Measures
The SEC’s Regulation G applies to any public disclosure or release of material i...
50
51
Financial Results

                                                 Quarters Ended         Twelve Months Ended
           ...
2008 Analysis of
Working Capital and Other Changes
                                                                  $ Mil...
Items Impacting YTD 2008 Results
       ($ Millions, Except EPS)                                                    Pre-ta...
Items Impacting 4Q 2007 Results

                                                                                         ...
Items Impacting YTD 2007 Results

                                                                                        ...
Business Unit Contribution
                                                                                            Twe...
Business Unit Contribution

                                                                        Twelve Months Ended
  ...
Business Unit Contribution

                                                                            Quarter Ended
    ...
Reconciliation of EBIT/EBITDA

                                            Quarters Ended      Twelve Months Ended
       ...
Reconciliation of
Adjusted Pipeline EBITDA
                                                      Quarters Ended           ...
Committed Projects In-Service Timeline

     $ Billions                            2009                         2010      ...
Reconciliation of
Adjusted E&P EBITDA
                                                              Quarters Ended        ...
PJM Basis MTM Impact & Cash Settlements

  $75
  $50
  $25
   $0
  ($25)

  ($50)
  ($75)
                                ...
E&P Cash Costs

                                                   4Q 2007            4Q 2008              FY 2007        ...
Production-Related Derivatives Schedule
                                                2009                              ...
Production-Related Derivatives Schedule
                                               2009                               ...
4Q 2008 Production Update
                                                                                                ...
Reconciliation of
Pro Forma Production Volumes—4Q
                                                                        ...
Reconciliation of
Pro Forma Production Volumes—YTD
                                                                       ...
Reserves Update

 (Bcfe)                              Int’l   Subtotal   Four Star   Total E&P
                        Dom...
Non-GAAP Reconciliation
2009 EBIT & EBITDA
                                                              $ Billions, Excep...
Upcoming SlideShare
Loading in …5
×

el paso D7A9D355-197F-480A-8FF4-86834B0DD876_EP_4Q_2008_Earnings_FINAL(ColorPrint)

271 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
271
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

el paso D7A9D355-197F-480A-8FF4-86834B0DD876_EP_4Q_2008_Earnings_FINAL(ColorPrint)

  1. 1. El Paso Corporation Fourth Quarter 2008 Financial & Operational Update February 26, 2009
  2. 2. Cautionary Statement Regarding Forward-looking Statements This presentation includes certain forward-looking statements and projections. 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 release, including, without limitation, changes in unaudited and/or unreviewed financial information; our ability to meet our 2009 debt maturities; volatility in, and access to, the capital markets; our ability to implement and achieve our objectives in our 2009 plan, including achieving our earnings and cash flow targets; the effects of any changes in accounting rules and guidance; our ability to meet production volume targets in our Exploration and Production segment; our ability to comply with the covenants in our various financing documents; our ability to obtain necessary governmental approvals for proposed pipeline and E&P 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 close asset sales, as well as transactions with partners on one or more of our expansion projects that are included in the plan on a timely basis; credit and performance risk of our lenders, trading counterparties, customers, vendors and suppliers ;changes in commodity prices and basis differentials for oil, natural gas, and power; our ability to obtain targeted cost savings in our businesses; inability to realize anticipated synergies and cost savings on a timely basis or at all; 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, including the risk of a global recession and negative impact on natural gas demand; 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, adjusted EBITDA, adjusted EPS, cash costs, and the required reconciliations under Regulation G, are set forth in this presentation or in the appendix hereto. El Paso defines Resource Potential or Resource Inventory 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. 3. Our Purpose El Paso Corporation provides natural gas and related energy products in a safe, efficient, and dependable manner 3
  4. 4. Our Vision & Values the place to work the neighbor to have the company to own 4
  5. 5. 2008 Accomplishments Pipelines Project execution Placed 7 projects in-service New expansions Committed backlog increased to $8 billion $1.2 B future EBITDA1 E&P Inventory growth Haynesville, Altamont, Raton CBM 595 Bcfe proven reserve additions2 Reserve metrics 195% domestic reserve replacement ratio3 $3.25/Mcfe RRC3 total; $2.87/Mcfe domestic3 Brazil Camarupim nearing production Exploration discoveries at Copaiba and Tot Hedges Improved 2009 position 176 TBtu with $9 floor Natural gas hedges valued at $730 MM at 12/31/08 New 2010 positions $6.79 floor on 47 TBtu Financial Cash flow Cash from operations up 31% Improved liquidity position Opportunistically accessed capital markets Progressed on non-core asset sales $2.2 B liquidity at 12/31/08; $3.3 B now 1EBITDA run rate on proportional basis 2Excludes revisions; does not include Four Star 3Excludes price-related revisions; does not include Four Star 5
  6. 6. Managing to the Current Realities Plenty of challenges—capital markets, low commodity prices, uncertain economy Acted swiftly to address 2009 liquidity needs Cut capital thoughtfully Pipelines—execute pipeline backlog E&P—preserve future inventory; focused on returns Board and management reviewing capital spending and financing options on continuous basis 6
  7. 7. Key Priorities Pipelines Exploration & Production Construct backlog on-time/budget Create value; prioritize investments $1.2 billion incremental EBITDA* Preserve inventory of opportunities Be selective on new opportunities Live within means Complete pipeline integrity program Continue to high-grade portfolio Financial Maximize liquidity Maintain pipeline investment-grade rating Use full suite of funding tools Continually improve return on total capital Improve credit metrics *Proportional future run-rate 7
  8. 8. Financial Results
  9. 9. Fourth Quarter & Annual 2008 Financial Results Annual Fourth Quarter ($ Millions, Except EPS) ($ Millions, Except EPS) Adjusted Adjusted Diluted EPS Adjusted EBITDA* Diluted EPS $1.31 $4,097 $0.27 $1.00 $0.21 $3,073 2008 2007 2008 2007 2008 2007 Operating Cash Flow Adjusted EBITDA* $2,370 $1,000 $1,805 $872 2008 2007 2008 2007 Significant improvement in full-year adjusted earnings and operating cash flow Note: Appendix and slides 10 and 11 include details on non-GAAP terms *Reflects El Paso’s proportionate interest in Citrus and Four Star 9
  10. 10. Items Impacting 4Q 2008 Results Diluted ($ Millions, Except EPS) Pre-tax After-tax EPS Net income (loss) available to common stockholders $(1,687) $(2.43) Adjustments1 Ceiling test charges and Four Star impairment $2,785 2,015 2.90 Change in fair value of power contracts (37) (24) (0.03) Change in fair value of legacy indemnification (16) (10) (0.01) Legal restructuring benefit – (40) (0.06) Change in fair value of production-related derivatives in Marketing (9) (6) (0.01) (0.15) (164) (105) MTM impact of E&P derivatives2 $ 0.21 Adjusted EPS—continuing operations3 1Alladjustments assume a 36% tax rate, except for the International portion of the ceiling test charges, and 694 MM diluted shares 2Includes $201 MM of MTM gains on derivatives adjusted for $37 MM of realized gains from cash settlements 3Reflects fully diluted shares of 754 MM and includes income impact from dilutive securities 10
  11. 11. Business Unit Contribution Quarter Ended December 31, 2008 Adjusted ($ Millions) EBIT DD&A EBITDA EBITDA* Core Businesses $ 319 $ 100 $ 419 $ 450 Pipelines 259 199 458 474 E&P before ceiling test charges & Four Star impairment 578 299 877 924 Core businesses subtotal (2,785) – (2,785) – Ceiling test charges & Four Star impairment $(2,207) $ 299 $(1,908) $ 924 Core businesses total Other Businesses 27 – 27 27 Marketing (3) 1 (2) (2) Power 49 2 51 51 Corporate & Other $(2,134) $ 302 $(1,832) $ 1,000 Total *Adjusted Pipeline EBITDA for 50% interest in Citrus and adjusted E&P EBITDA for 49% interest in Four Star, ceiling test charges and Four Star impairment. Appendix includes details on non-GAAP terms 11
  12. 12. Marketing Financial Results $ Millions Quarters Ended Twelve Months Ended December 31, December 31, 2008 2007 2008 2007 EBIT Strategic Change in fair value of production-related derivatives $ 9 $ (26) $ (50) $ (89) Other Change in fair value of natural gas derivative contracts (11) (5) 7 (31) Change in fair value of power contracts 37 (34) (46) (77) Settlements, demand charges & other (4) 6 6 (22) Operating expenses & other income (4) (5) (21) 17 Other total 18 (38) (54) (113) EBIT $ 27 $ (64) $(104) $(202) 12
  13. 13. Operating Cash Flow and Capital Investment $ Millions Twelve Months Ended December 31, 2008 2007 $ (823) $ 436 Income (loss) from continuing operations 3,900 1,712 Non-cash adjustments 3,077 2,148 Subtotal (707) (310) Working capital changes and other* 2,370 1,838 Cash flow from continuing operations – (33) Discontinued operations $2,370 $1,805 Cash flow from operations $2,757 $2,495 Capital expenditures $ 362 $1,197 Acquisitions $ 682 $ 106 Proceeds from divestitures $ 157 $ 149 Dividends paid 31% increase in operating cash flow *Includes change in margin collateral of $24 MM in 2008 and $90 MM in 2007 13
  14. 14. Recent Significant Financing Activities El Paso Corp. 5-year, $500 MM 12% Notes (15.25% yield) Ended high-yield offering drought El Paso Exploration & Production $300 MM Revolver Secured borrowing base facility (LIBOR + 350 bps) TGP 7-year, $250 MM 8% Notes (9% yield) Investment-grade unsecured notes El Paso Corp. 7-year, $500 MM 8.25% Notes Significant reduction in yield—9.125% After financings, weighted average cost of debt at 7.1% 14
  15. 15. Substantial Increase in Liquidity $ Billions $3.3 $2.5 $2.2 $1.9 $1.9 $1.2 $1.0 $1.2 $1.4 $1.3 $1.2 $0.7 Sep. 30, Dec. 31, Jan. 31, Feb. 28, 2008 2008 2009 2009E Bank Lines Cash 15
  16. 16. Increased Liquidity Has Reduced EP Borrowing Costs 15 14 13 BB Index Yield (%) 12 11 10 BBB Index 9 8 El Paso 7%, Due 2017 7 Dec. 01, Dec. 14, Dec. 27, Jan. 09, Jan. 22, Feb. 04, 2008 2008 2008 2009 2009 2009 Source: Citigroup/Bloomberg 16
  17. 17. Excellent 2009 Hedge Positions Full-Year 2009 151 TBtu Ceiling Average cap $14.97/MMBtu 143 TBtu 168 TBtu 8 TBtu 2009 Gas $15.41 $9.10 $7.33 ceiling floor fixed price 176 TBtu Floor Balance at Average floor $9.02/MMBtu Market Price 1.5 MMBbls 2009 Oil1 $45.00 fixed price ~75% of domestic natural gas2; gas hedges valued at $730 MM as of 12/31/08 $110/Bbl oil swaps monetized for $186 MM Note: See full Production-related Derivative Schedule in Appendix 1Reflects positions after monetization of oil swaps 2Includes proportionate share of Four Star equity volumes 17
  18. 18. 2010 Natural Gas Hedge Positions Positions as of February 23, 2009 22 TBtu 25 TBtu Balance at 2010 Gas $7.00 $6.61 Market Price floor fixed price 47 TBtu Floor Average floor $6.79/MMBtu Note: See full Production-related Derivative Schedule in Appendix 18
  19. 19. 2009 Guidance Assumptions $5.00/MMBtu (NYMEX); $40.00/Bbl (WTI) $2.7 billion–$3.1 billion capital Pipelines: $1.7 billion E&P: $0.9 billion–$1.3 billion (~ $250 MM International) 725–815 MMcfe/d production (including Four Star) E&P plans are highly flexible Emphasis on maximizing returns on capital Reduced pace of capital spend Will adjust based on prices and service costs Leads to wide range of outcomes, but more efficient use of capital 19
  20. 20. 2009 Financial Targets $ Billions, Except EPS and Sensitivity EPS*: $0.85–$1.05 EBIT* total: $2.0–$2.3 Pipelines: $1.4; E&P $0.8–$0.9 EBITDA*: $3.1– $3.3 Pipelines: $1.8; E&P $1.4–$1.6 Cash flow from operations: $1.7–$2.0 Sensitivity Gas Oil -$1 +$1 -$10 +$10 EBITDA ($MM) (40) 40 (40) 40 EPS ($) (0.04) 0.04 (0.04) 0.04 *Excludes MTM changes on hedge derivatives and includes cash proceeds on settlements based on Plan prices 20
  21. 21. Liquidity Outlook $ Billions $0.2 $0.9 $1.9 $0.2 $2.7– $1.1 $3.1 $2.2 $1.2– $1.6 E&P Capex 12/31/08 YTD Net OCF Remaining May Dividends Capex YE Financings Asset Maturity & Minority Liquidity & Asset Sales Interest Sales Ample liquidity for 2009 Note: Forecast assumes most of $500 MM LC facility replaced and EPEP $300 MM facility renewed 21
  22. 22. Summary Significant progress on building liquidity As reflected by EP bond spreads 2009 capital program reflects balance Provide funding for Pipeline expansion backlog Manage E&P for value vs. growth Maximize liquidity Will continue to be opportunistic in capital markets 22
  23. 23. Pipeline Group
  24. 24. 2008 Highlights Favorable 4Q and YTD EBIT 4% increase from 4Q 2007 Throughput increase Progress on growth $0.7 billion of growth projects placed in-service ~$8 billion committed back-log at year-end Adding Ruby, FGT Phase VIII, TGP 300 Line project Best-ever safety performance 24
  25. 25. Pipeline Group Financial Results Quarters Ended Twelve Months Ended December 31, December 31, ($ Millions) 2008 2007 2008 2007 $1,308 $ 1,268 EBIT before minority interest1 $ 330 $ 311 35 3 Less minority interest 11 3 $1,273 $ 1,265 EBIT $ 319 $ 308 $1,668 $ 1,638 EBITDA $ 419 $ 402 $1,798 $ 1,769 Adjusted EBITDA2 $ 450 $ 430 $1,198 $ 1,099 Capital expenditures $ 368 $ 334 $ 303 $ – Acquisition capital3 $– $ – 9% EBITDA growth in 4Q before hurricane impact 1 Included unfavorable impact from Hurricanes Gustav & Ike—$18 MM in 4Q, $31 MM YTD 2AdjustedPipeline EBITDA for 50% interest in Citrus 3Gulf LNG and TGP Blue Water acquisitions Note: Appendix includes details on non-GAAP terms 25
  26. 26. Throughput Growth Varied by Region Full-year % Increase 2008 vs. 2007 Throughput Ups Downs TGP 0% Independence Hub Hurricanes SNG 0% Elba deliveries to Florida Milder summer/ 4Q industrial demand EPNG +5% California – CIG +10% Rockies supply, expansions Milder winter 4% overall increase Note: CIG includes Colorado Interstate Gas, Cheyenne Plains and Wyoming Interstate EPNG includes El Paso Natural Gas and Mojave 26
  27. 27. ~$700 MM Projects Placed in Service in 2008 WIC Kanda Lateral Medicine Bow 2008 Cheyenne Plains—Coral High Plains TGP Blue Water SNG Cypress II SNG SESH I* 7x run rate EBITDA * Operated by Spectra Energy 27
  28. 28. Committed Growth Backlog: Large, Profitable ~$8 billion capex; construct at 7x run rate EBITDA Ruby Pipeline $3 Billion TGP Concord TGP 300 Line Project 2011 $21 MM $750 MM 1.3–1.5 Bcf/d Nov 2009 2011 30 MMcf/d 290 MMcf/d WIC System Expansion $71 MM 2010–2011 Elba Expansion III & Elba 320 MMcf/d Express CIG Totem Storage $1.1 Billion $154 MM (100%) 2010–2014 WIC Piceance Lateral July 2009 8.4 Bcf / 0.9 Bcf/d & 1.2 Bcf/d $62 MM 200 MMcf/d 4Q 2009 220 MMcf/d SNG Cypress Phase III $86 MM 2011 CIG Raton 2010 160 MMcf/d Expansion $146 MM 2Q 2010 SNG South System III/ TGP Carthage 130 MMcf/d SESH Phase II Expansion $352 MM / $69 MM $39 MM 2011–2012 May 2009 Gulf LNG 370 MMcf/d / 350 MMcf/d 100 MMcf/d $1+ Billion (100%) 2011 El Paso Pipeline Partners, LP FGT Phase VIII 6.6 Bcf / 1.3 Bcf/d Expansion $2.4 Billion (100%) El Paso Pipeline 2011 800 MMcf/d Note: As of February 26, 2009; El Paso Pipeline Partners owns 25% of SNG & 40% of CIG 28
  29. 29. Construction Risk Management El Paso Capital ($ Billions) Steel Construction Elba Expansion Fixed-Price EPC Contract $ 1.1 Elba Express Fixed Unit-Priced Gulf LNG (50%) Fixed-Price EPC Contract $ 0.5 Ruby Fixed Incentive-Based $ 3.0 FGT Phase VIII (50%) Fixed Unit-Priced $ 1.2 TGP 300 Line Fixed Negotiating $ 0.8 Backlog has been significantly de-risked 29
  30. 30. Pipeline Summary Stability from demand-based revenues Visible multi-year growth profile Highly focused on execution of project backlog Significant risk mitigation in place 30
  31. 31. Exploration & Production
  32. 32. 2008 Highlights $2.3 billion adjusted EBITDA 817 MMcfe/d production1 (pro forma) 195% domestic reserve replacement ratio2 $2.87/Mcfe domestic RRC2 27% inventory growth Brazil Camarupim development progress Domestic divestitures closed 1Includesinterest in Four Star 2Beforeprice-related revisions; does not include Four Star Note: Appendix includes details on non-GAAP terms 32
  33. 33. E&P Results Quarters Ended Twelve Months Ended December 31, December 31, ($ Millions) 2008 2008 2007 2007 EBIT before ceiling test charges & Four Star impairment1 $ 259 $ 263 $ 1,346 $ 909 Ceiling test charges & Four Star impairment (2,785) – (2,794) – EBIT (2,526) 263 (1,448) 909 EBITDA1 (2,327) 490 (649) 1,689 Adjusted EBITDA2 474 525 2,267 1,803 Capital expenditures 567 341 1,681 1,425 Acquisition capital – 24 61 1,178 Cash costs ($/Mcfe) $ 2.09 $ 1.83 $ 1.97 $ 1.88 1Quarters ended includes MTM gains on derivatives of $201 MM in 2008 and $3 MM in 2007. Received cash related to settlements of these derivatives of $37 MM in 2008 and paid cash of $6 MM in 2007. Year-to-date includes MTM gains on derivatives of $305 MM in 2008 and $7 MM in 2007. Received cash related to settlements of these derivatives of $18 MM in 2008 and paid cash of $31 MM in 2007 2Adjusted E&P EBITDA includes proportionate share of Four Star but excludes non-cash ceiling test charges and Four Star impairment Note: Appendix includes details on non-GAAP terms 33
  34. 34. Total Cash Costs $/Mcfe $2.09 $1.97 $1.88 $1.83 $0.28 $0.44 $0.31 $0.33 $0.06 $0.05 $0.04 $0.04 $0.71 $0.59 $0.57 $0.64 $1.81 $1.53 $1.57 $1.50 $0.90 $1.04 $0.89 $0.88 4Q 2007 4Q 2008 FY 2007 FY 2008 Production Taxes Taxes Other Than Production & Income General & Administrative Direct Lifting Costs 34
  35. 35. FY 2008 Production MMcfe/d As Reported Pro Forma* 862 817 816 798 14 25 792 11 14 without 11 114 191 102 135 hurricanes 215 225 213 196 154 154 147 148 305 310 312 297 FY 2007 FY 2008 FY 2007 FY 2008 Central Western TGC GOM/SLA Intl Hurricane Volumes Note: Includes proportionate share of Four Star equity volumes Appendix includes details on non-GAAP terms *Excludes volumes from domestic assets sold in 2008, adjusts volumes for the effects of the hurricanes in 2008, and 35 assumes full year of Peoples volumes in 2007
  36. 36. YE 2008 Reserves Bcfe 582 Approx. 3.0 Tcfe at $7/$70 299 2851 5602 3,109 2,547 YE 2007 Extensions & Production Purchases & Revisions YE 2008 Discoveries Sales Commodity Prices Henry Hub WTI YE07 $6.80/MMbtu $95.98/Bbl YE08 $5.71/MMbtu $44.60/Bbl Note: Includes proportionate share of Four Star equity volumes 1Includes (303) Bcfe of sales and 18 Bcfe of acquisitions 36 2Includes (490) Bcfe of price-related revisions and (70) Bcfe of performance-related revisions
  37. 37. Domestic Reserve Metrics Reserve Replacement Costs Reserve Replacement Ratio (RRC, $/Mcfe) (RRR) 255% $3.26 $3.92 195% $3.22 $2.87 129% 109% 2006 2007 2008 2006 2007 2008 Reflects acquisitions Note: 2008 RRC and RRR do not include price revisions. Prior years RRC and RRR include proved reserves additions, acquisitions, price, and performance revisions. Results do not include Four Star 37
  38. 38. 27% Unproven Inventory Growth Net Risked Resource Inventory (Bcfe) 3,550 700 2,790 2,550 835 985 1,770 1,460 1,180 1,080 495 385 2006 YE 2007 YE 2008 YE Unconventional Conventional Low Risk Conventional Higher Risk 2009 budget preserves future inventory 38
  39. 39. 2009 Capital Program $0.9 billion–$1.3 billion Capital Spending ($ MM) capital program Flexible capital program $1,742 focusing on value creation $1,300 Increased focus on low-risk programs with significant inventory and repeatability Haynesville Cotton Valley Horizontal Altamont Oil 2008 2009 Black Warrior CBM International focused on Central Western TGC Brazil’s Camarupim, ES-5 GOM Intl Acq. block and Egypt exploration 39
  40. 40. Declining Domestic Drilling Activity Operated Drilling Rig Count End of Period 28 27 25 24 21 20 19 19 8 6 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2007 2007 2007 2007 2008 2008 2008 2008 2009E 2009E 40
  41. 41. Arklatex Programs Progressing Haynesville Shale (currently producing 27 MMcfe/d as of February 21, 2009) 120 4,000 4 Wells Producing IP (MMcfe/d) 3,500 Spud to First Sales (Days) 100 Miller Land Co 10H #1 4.5 3,000 80 Travis Lynch GU #4-H 8.0 $/Lateral Ft. 2,500 RF Gamble 24H #1 14.6 60 2,000 Blake 10H #1 20.3 1,500 40 1,000 20 2009 Activity 500 Spud in March: Hamilton 12H #1 and 0 0 Miller Travis R.F. Blake Annette Green 22H #1 Land Co. Lynch Gamble 10H #1 10H #1 GU #4-H 24H #1 J R Gamble will TD in March with first sales in April Drilling Completion $/Lateral Ft. 2–4 rigs running during 2009 41
  42. 42. Arklatex Programs Progressing Cotton Valley Horizontal (currently producing 10 MMcfe/d as of February 21, 2009) 6 Wells Producing IP (MMcfe/d) Lindy Britton #2H 7.0 Sample H #5 3.2 Weyerhauser 15H #1 9.6 Lindy Britton #4H 4.2 Means Family Trust #26H 6.4 Malone H #1* 3.0 2009 Activity 1Q wells: Shadowens 4H#1 and KMI Continental Royalty H#1 1–2 rigs running during 2009 *Well is still cleaning up from hydraulic fracturing 42
  43. 43. Egypt Update Fields Gas Oil South Mariut Tanta EP 60%, RWE 40% RWE 60%, EP 40% South Mariut Swapped 40% of our WI for an equal interest in RWE’s Tanta block located east of South Mariut Plan to drill 3 to 4 exploratory wells in 2009; first well spud January 31, 2009 Tanta Exploration Same plays as South Mariut First well late 2009 / early 2010 43
  44. 44. Brazil Update Camarupim BM-ES-5 TOT 1 KM First gas in second quarter of 2009 1 MILE Commercial agreements executed Unitization agreement and development plan approval expected March 2009 CAMARUPIM Currently drilling second and third horizontal gas development wells Tot Drilled and currently testing 44
  45. 45. E&P Summary 2009 capital program focused on low-risk, value-adding programs Maintain capital discipline while seeking to capture lower service costs Maintain flexibility while preserving inventory and advancing key programs 45
  46. 46. Summary Solid results in volatile market Balancing growth with financial stability Managing business for future success Deliver pipeline backlog Preserve E&P opportunities 46
  47. 47. El Paso Corporation Fourth Quarter 2008 Financial & Operational Update February 26, 2009
  48. 48. Appendix 48
  49. 49. 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 attached. Additional detail regarding non-GAAP financial measures can be reviewed in El Paso’s full operating statistics, which will be posted at www.elpaso.com 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 and discontinued operations; (ii) income taxes; and (iii) interest and debt expense. The company excludes interest and debt expense so that investors may evaluate the company’s operating results without regard to its financing methods or capital structure. EBITDA is defined as EBIT excluding depreciation, depletion and amortization. El Paso’s business operations consist of both consolidated businesses as well as 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. Adjusted EBITDA is defined as EBITDA including the proportional share of EBITDA less our recorded equity earnings from our equity investments in Citrus and Four Star. The company believes that adjusted EBITDA is useful to its investors because it allows them to evaluate more effectively the performance of our businesses regardless of the type of ownership structure. Exploration and Production per-unit total cash costs or cash operating costs equal total operating expenses less DD&A, cost of products and services, transportation costs, and ceiling test charges divided by total production. It is a valuable measure of operating efficiency. For 2008, Adjusted EPS is earnings per share from continuing operations excluding the gain or loss related to the change in fair value of an indemnification from the sale of an ammonia plant in 2005, the gain related to an adjustment of the liability for indemnification of medical benefits for retirees of the Case Corporation, the gain related to the disposition of a portion of the company’s investment in its telecommunications business, changes in fair value of power contracts, changes in fair value of the production-related derivatives in Marketing, impact of mark-to-market E&P derivatives, ceiling test charges and Four Star impairment, other legacy litigation adjustments, legal restructuring benefit, and the effect of the change in the number of diluted shares. For 2007, Adjusted EPS is earnings per share from continuing operations excluding changes in fair value of production-related derivatives in Marketing, the loss related to Brazilian power impairments, the gain related to the crude oil trading liability, changes in the fair value of power contracts, the loss related to an adjustment of the liability for indemnification of medical benefits for retirees of the Case Corporation, debt repurchase costs, and the effect of the change in the number of diluted shares. Adjusted EPS is useful in analyzing the company’s on-going earnings potential. 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 operating measurements. 49
  50. 50. 50
  51. 51. 51
  52. 52. Financial Results Quarters Ended Twelve Months Ended December 31, December 31, ($ Millions, Except EPS) 2008 2007 2008 2007 $ 1,652 $ (2,134) $ (154) $ 483 EBIT (994) (239) (914) (252) Interest and debt expense 658 (2,373) (1,068) 231 Income (loss) before income taxes 222 (695) (245) 71 Income taxes 436 (1,678) (823) 160 Income (loss) from continuing operations 674 – – – Discontinued operations, net of income taxes 1,110 (1,678) (823) 160 Net income (loss) Preferred stock dividends 37 9 37 9 Net income (loss) available to common stockholders $ 1,073 $ (1,687) $ (860) $ 151 Diluted EPS from continuing operations $ 0.57 $ (2.43) $ (1.24) $ 0.21 Diluted EPS from discontinued operations 0.96 – – – Total diluted EPS $ 1.53 $ (2.43) $ (1.24) $ 0.21 Diluted shares (millions) 699 694 696 759 52
  53. 53. 2008 Analysis of Working Capital and Other Changes $ Millions Twelve Months Ended December 31, 2008 Margin collateral $ 24 Changes in price risk management activities (189) Settlements of derivative instruments (272) Net changes in trade receivable/payable (16) Settlement of liabilities (85) Other (169) Total working capital changes & other $(707) 53
  54. 54. Items Impacting YTD 2008 Results ($ Millions, Except EPS) Pre-tax After-tax Diluted EPS Net income (loss) available to common stockholders $ (860) $(1.24) Adjustments1 Ceiling test charges and Four Star impairment $ 2,794 2,024 2.90 Change in fair value of power contracts 46 29 0.04 Change in fair value of legacy indemnification 30 19 0.03 Case Corporation indemnification (65) (27) (0.04) Other legacy litigation adjustments (23) (26) (0.03) Gain on sale of portion of telecommunications business (18) (12) (0.01) Legal restructuring benefit – (40) (0.06) Effect of change in number of diluted shares – – (0.06) Change in fair value of production-related derivatives in Marketing 50 32 0.04 MTM impact of E&P derivatives2 (287) (183) (0.26) Adjusted EPS—continuing operations3 $ 1.31 1Alladjustments assume a 36% tax rate, except the International portion of the ceiling test charges, the Case Corporation indemnification and other legacy litigation adjustments, and 696 MM diluted shares 2Includes $305 MM of MTM gains on derivatives adjusted for $18 MM of realized gains from cash settlements 3Reflects fully diluted shares of 766 MM and includes income impact from dilutive securities 54
  55. 55. Items Impacting 4Q 2007 Results Diluted Pre-tax After-tax EPS ($ Millions, Except EPS) Net income available to common stockholders $151 $ 0.21 Adjustments1 Change in fair value of power contracts $ 34 22 0.03 Brazilian power impairments 8 8 0.01 Change in fair value of production-related derivatives in Marketing 26 17 0.02 Adjusted EPS—continuing operations2 $ 0.27 1All adjustments assume a 36% tax rate, except for Brazilian power impairments, and 759 MM diluted shares 2Reflects diluted shares of 759 MM and includes income impact from dilutive securities 55
  56. 56. Items Impacting YTD 2007 Results Diluted Pre-tax After-tax ($ Millions, Except EPS) EPS Net income available to common stockholders $1,073 $ 1.53 Adjustments1 Sale of ANR and related assets $(1,043) (674) (0.96) Crude oil trading liability (77) (49) (0.07) Brazilian power impairments 72 72 0.10 Change in fair value of power contracts 77 49 0.07 Case Corporation indemnification 11 7 0.01 Debt repurchase costs 291 186 0.27 Effect of change in number of diluted shares2 – – (0.03) Change in fair value of production-related derivatives in Marketing 0.08 89 57 Adjusted EPS—continuing operations2 $ 1.00 1Adjustments assume 36% tax rate, except for Brazilian power impairments and sale of ANR and related assets, and 699 MM diluted shares 2Based upon 757 MM diluted shares and includes the income impact from dilutive securities 56
  57. 57. Business Unit Contribution Twelve Months Ended December 31, 2008 Adjusted EBITDA EBITDA* ($ Millions) EBIT DD&A Core Businesses Pipelines $ 1,273 $ 395 $ 1,668 $ 1,798 E&P before ceiling test charges & Four Star impairment 1,346 799 2,145 2,267 Core business subtotal 2,619 1,194 3,813 4,065 Ceiling test charges & Four Star impairment (2,794) – (2,794) – Core businesses total $ (175) $ 1,194 $ 1,019 $ 4,065 Other Businesses (104) – (104) (104) Marketing 1 1 2 2 Power 124 10 134 134 Corporate & Other Total $ (154) $ 1,205 $ 1,051 $ 4,097 *Adjusted Pipeline EBITDA for 50% interest in Citrus and adjusted E&P EBITDA for 49% interest in Four Star, ceiling test 57 charges, and Four Star impairment
  58. 58. Business Unit Contribution Twelve Months Ended December 31, 2007 Adjusted ($ Millions) EBIT DD&A EBITDA EBITDA* Core Businesses Pipelines $1,265 $ 373 $1,638 $1,769 E&P 909 780 1,689 1,803 Core businesses total $2,174 $1,153 $3,327 $3,572 Other Businesses Marketing $ (202) $ 3 $ (199) $ (199) Power (37) 1 (36) (36) Corporate & Other (283) 19 (264) (264) Total $1,652 $1,176 $2,828 $3,073 *Adjusted Pipeline EBITDA for 50% interest in Citrus and adjusted E&P EBITDA for 49% interest in Four Star 58
  59. 59. Business Unit Contribution Quarter Ended December 31, 2007 Adjusted EBIT DD&A EBITDA EBITDA* ($ Millions) Core Businesses $430 $402 $ 94 $ 308 Pipelines 525 490 227 263 E&P $955 $892 $321 $ 571 Core businesses total Other Businesses (63) (63) 1 (64) Marketing (4) (4) – (4) Power (16) (16) 4 (20) Corporate & Other $872 $809 $326 $ 483 Total *Adjusted Pipeline EBITDA for 50% interest in Citrus and adjusted E&P EBITDA for 49% interest in Four Star 59
  60. 60. Reconciliation of EBIT/EBITDA Quarters Ended Twelve Months Ended December 31, December 31, ($ Millions) 2008 2007 2008 2007 EBITDA $(1,832) $ 809 $2,828 $ 1,051 Less: DD&A 302 326 1,176 1,205 EBIT (2,134) 483 1,652 (154) Interest and debt expense (239) (252) (994) (914) Income (loss) before income taxes (2,373) 231 658 (1,068) Income taxes (695) 71 222 (245) Income (loss) from continuing operations (1,678) 160 436 (823) Discontinued operations, net of taxes – – 674 – Net income (loss) (1,678) 160 1,110 (823) Preferred stock dividends 9 9 37 37 Net income (loss) available to common stockholders $(1,687) $ 151 $1,073 $ (860) 60
  61. 61. Reconciliation of Adjusted Pipeline EBITDA Quarters Ended Twelve Months Ended December 31, December 31, 2008 2007 2007 2008 ($ Millions) Citrus equity earnings $ 12 $ 16 $ 64 $ 81 50% Citrus DD&A 14 13 53 50 50% Citrus interest 13 9 41 37 50% Citrus income taxes 5 7 37 46 Other* (1) (1) (1) (2) 50% Citrus EBITDA $ 43 $ 44 $ 194 $ 212 El Paso Pipeline EBITDA $419 $ 402 $1,668 $1,638 Add: 50% Citrus EBITDA 43 44 194 212 Less: Citrus equity earnings 12 16 64 81 Adjusted Pipeline EBITDA $450 $ 430 $1,798 $1,769 Citrus debt at December 31 (50%) $ 689 $ 477 *Other represents the excess purchase price amortization and differences between the estimated and actual equity earnings on our investment 61
  62. 62. Committed Projects In-Service Timeline $ Billions 2009 2010 2011 & Beyond WIC Piceance Elba III Phase A Ruby TGP Carthage Elba Express WIC System Expansion TGP Concord CIG Raton 2010 TGP 300 Line Project CIG Totem (50%) FGT Phase VIII (50%) Gulf LNG (50%) Elba III Phase B SNG South System III SNG SESH Phase II Cypress III Net project cost $0.2 $1.1 $6.5 Note: $ in each column represents total costs for each project, shown in year placed in service (actual spend over multiple years). WIC is owned by El Paso Pipeline Partners 62
  63. 63. Reconciliation of Adjusted E&P EBITDA Quarters Ended Twelve Months Ended December 31, December 31, ($ Millions) 2008 2007 2008 2007 $ (93) $ 12 $ (129) $8 Four Star equity earnings 23 22 6 6 Proportionate share of Four Star DD&A – – – – Proportionate share of Four Star interest 46 39 (3) 13 Proportionate share of Four Star income taxes 178 53 138 Other* 16 $ 154 $ 126 $ 12 $ 43 Proportionate share of Four Star EBITDA $ (649) $1,689 $ (2,327) $ 490 El Paso E&P EBITDA 2,669 – 2,660 – Add: Ceiling test charges 154 126 12 43 Add: Proportionate share of Four Star EBITDA (93) 12 (129) 8 Less: Four Star equity earnings $ 2,267 $1,803 $ 474 $ 525 Adjusted E&P EBITDA *Represents impairment charge of $125 MM in 2008 and the excess purchase price amortization Note: In the third quarter of 2007, E&P increased its interest in Four Star from 43% to 49% 63
  64. 64. PJM Basis MTM Impact & Cash Settlements $75 $50 $25 $0 ($25) ($50) ($75) MTM impact ($100) Cash settlements ($125) ($150) Q205 Q305 Q405 Q106 Q206 Q306 Q406 Q107 Q207 Q307 Q407 Q108 Q208 Q308 Q408 64
  65. 65. E&P Cash Costs 4Q 2007 4Q 2008 FY 2007 FY 2008 Total Per Unit Total Per Unit Total Per Unit Total Per Unit ($ MM) ($/Mcfe) ($ MM) ($/Mcfe) ($ MM) ($/Mcfe) ($ MM) ($/Mcfe) Total operating expense $ 393 $ 5.04 $ 3,016 $48.25 $ 1,414 $ 4.89 $ 4,120 $15.16 Depreciation, depletion and amortization (227) (2.91) (199) (3.19) (780) (2.70) (799) (2.94) Transportation costs (19) (0.24) (16) (0.26) (72) (0.24) (79) (0.29) Costs of products (5) (0.06) (10) (0.16) (20) (0.07) (38) (0.14) Ceiling test charges – – (2,660) (42.55) – – (2,669) (9.82) Per unit cash costs* $ 1.83 $ 2.09 $ 1.88 $ 1.97 77,914 62,513 289,242 271,673 Total equivalent volumes (MMcfe)* *Excludes volumes and costs associated with equity investment in Four Star 65
  66. 66. Production-Related Derivatives Schedule 2009 2010 2011–2012 Notional Avg. Hedge Notional Avg. Hedge Notional Avg. Hedge Volume Price Volume Price Volume Price Natural Gas (TBtu) ($/MMBtu) (TBtu) ($/MMBtu) (TBtu) ($/MMBtu) Economic—EPEP Fixed price—Legacy 4.6 $ 3.56 4.6 $3.70 6.8 $3.88 Fixed price 3.6 $12.06 20.1 $7.28 Ceiling 142.9 $15.41 Floor 167.7 $ 9.10 21.9 $7.00 Avg. ceiling 151.1 $14.97 24.7 $6.61 6.8 $3.88 Avg. floor 175.9 $ 9.02 46.6 $6.79 6.8 $3.88 2009 Notional Avg. Hedge Volume Price Crude Oil (MMBbls) ($/Bbl) Economic—EPEP Fixed price 1.50 $45.00 66 Note: Positions are as of February 23, 2009 (Contract months: Jan 2009–Forward)
  67. 67. Production-Related Derivatives Schedule 2009 2010 2011–2012 Notional Avg. Hedge Notional Avg. Hedge Notional Avg. Hedge Volume Price Volume Price Volume Price Natural Gas (TBtu) ($/MMBtu) (TBtu) ($/MMBtu) (TBtu) ($/MMBtu) Economic—EPEP Fixed price—Legacy 4.6 $ 3.56 4.6 $3.70 6.8 $3.88 Fixed price 3.6 $ 12.06 20.1 $7.28 Ceiling 142.9 $ 15.41 Floor 167.7 $ 9.10 Avg. ceiling 151.1 $ 14.97 24.7 $6.61 6.8 $3.88 Avg. floor 175.9 $ 9.02 24.7 $6.61 6.8 $3.88 2009 Notional Avg. Hedge Volume Price Crude Oil (MMBbls) ($/Bbl) Economic—EPEP Fixed price 3.43 $109.93 67 Note: Positions are as of December 31, 2008 (Contract months: Jan 2009–Forward)
  68. 68. 4Q 2008 Production Update MMcfe/d As Reported Pro Forma* 924 13 814 805 752 53 175 13 752 9 9 123 without 57 57 hurricanes 254 220 220 212 153 148 157 157 329 318 309 309 4Q 2007 4Q 2008 4Q 2007 4Q 2008 Central Western TGC GOM/SLA Intl Hurricane Volumes Note: Includes proportionate share of Four Star equity volumes Appendix includes details on non-GAAP terms. *Excludes volumes from domestic assets sold in 2008, adjusts volumes for the effects of the hurricanes in 2008, and 68 assumes full year of Peoples volumes in 2007
  69. 69. Reconciliation of Pro Forma Production Volumes—4Q Equivalents (MMcfe/d) 4Q 2007 4Q 2008 Add: Add: Less: Domestic Add: Less: Domestic Hurricane Reported Peoples Assets Sold Pro Forma* Reported Peoples Assets Sold Impact Pro Forma* Central 252 – 11 241 236 – – – 236 Western 153 – 5 148 157 – – – 157 TGC 254 – 42 212 220 – – – 220 GOM/SLA 175 – 52 123 57 – – 53 110 International 13 – – 13 9 – – – 9 Total Consolidated 847 – 110 737 679 – – 53 732 – – – Proportionate share of Four Star 77 – – 77 73 – – – 73 – – – Total with Four Star 924 – 110 814 752 – – 53 805 *Excludes volumes from domestic assets sold in 2008 and adjusts volumes for the effects of the hurricanes in 2008 and assumes full year of Peoples volumes in 2007 69
  70. 70. Reconciliation of Pro Forma Production Volumes—YTD Equivalents (MMcfe/d) 2007 2008 Add: Add: Less: Domestic Add: Less: Domestic Hurricane Reported Peoples Assets Sold Pro Forma* Reported Peoples Assets Sold Impact Pro Forma* Central 227 22 14 235 238 – 2 0 236 Western 147 6 5 148 154 – – – 154 TGC 213 23 40 196 225 – 10 2 217 GOM/SLA 191 1 57 135 114 – 12 23 125 International 14 – – 14 11 – – – 11 Total Consolidated 792 52 116 728 742 – 24 25 743 Proportionate share of Four Star 70 – – 70 74 – – – 74 Total with Four Star 862 52 116 798 816 – 24 25 817 *Excludes volumes from domestic assets sold in 2008 and adjusts volumes for the effects of the hurricanes in 2008 and assumes full year of Peoples volumes in 2007 70
  71. 71. Reserves Update (Bcfe) Int’l Subtotal Four Star Total E&P Domestic 1/1/08 2,606 247 2,853 256 3,109 Production (268) (4) (272) (27) (299) Extensions & Discoveries 577 – 577 5 582 Purchases 18 – 18 – 18 Sales (303) – (303) – (303) Price Revisions (299) (177) (476) (14) (490) Perform. Revisions (72) – (72) 2 (70) 12/31/08 2,259 66 2,325 222 2,547 71
  72. 72. Non-GAAP Reconciliation 2009 EBIT & EBITDA $ Billions, Except EPS EBITDA 3.1–3.3 Less: DD&A 1.0-1.1 EBIT 2.0–2.3 Less: Interest 1.0 Less: Taxes 0.4 – 0.5 Net Income 0.6–0.8 EPS $0.85–$1.05 Note: Numbers may not foot due to rounding 72

×