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  1. 1. El Paso Corporation Doug Foshee President & Chief Executive Officer Lehman Brothers CEO Energy/Power Conference September 3, 2008
  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 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; outcome of litigation; our ability to obtain necessary governmental approvals for proposed pipeline projects and our ability to successfully construct and operate such projects; changes in commodity prices and basis differentials for oil, natural gas, LNG and power and relevant basis spreads; 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 and 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 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. Defining 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. El Paso Corporation Pipelines E&P 42,000 miles of interstate pipeline 2.8 Tcfe proven reserves* Best positioned—markets & supply Top 10 domestic independent Value Drivers 10%+ EBIT growth 2008–2013 8%–12% production growth 2007–2010 $8 billion committed project backlog International developments Additional opportunities Inventory expansion *As of 12/31/07 excluding reserves related to properties divested in 2008; also includes reserves from 5 proportionate share of Four Star
  6. 6. Delivering Superior Performance $1.00–$1.10 $1.40–$1.50 Share Dividend EPS Guidance EPS Guidance Corporate buy-back increase Original Current $3B backlog $8B backlog FGT Ruby TGP Pipelines 6%–8% long-term 10%+ long-term Phase VIII Pipeline Line 300 EBIT growth EBIT growth Pursuing CBM 8%–12% E&P High grading Niobrara Haynesville Accelerate & Altamont volume growth complete shale tests shale test Bia down spacing 3 years Jan Sep 2008 6
  7. 7. El Paso Pipeline Group North America’s Leading Natural Gas Pipeline Franchise Tennessee Colorado Wyoming Gas Pipeline Interstate Gas Interstate Cheyenne Mojave Plains Pipeline Pipeline Southern Natural Gas Elba Island El Paso LNG Natural Gas Mexico Gulf LNG Ventures (50%) Florida Gas Transmission (50%) 19% of total U.S. interstate pipeline mileage 24 Bcf/d capacity (16% of total U.S.) 18 Bcf/d throughput 28% of gas delivered to U.S. consumers Source: El Paso Corporation based on 2007 data Note: Includes El Paso Corporation and El Paso Pipeline Partners, L.P. 7
  8. 8. El Paso Backlog: Large and Profitable Total committed backlog $8 billion WIC Medicine Bow Expansion $39 MM Ruby Pipeline Sep 2008 $3 Billion TGP Concord 330 MMcf/d 2011 $21 MM TGP Line 300 Expansion 1.3–1.5 Bcf/d Nov 2009 $750 MM (Phase I & II) 30 MMcf/d 2010-2011 290 MMcf/d WIC Expansion - Kanda CIG High Plains Pipeline Lateral & Wamsutter $216 MM (100%) $55 MM Elba Expansion III & Elba December 2008 2010–2011 Express 900 MMcf/d 240 MMcf/d $1.1 Billion SNG SESH –Phase I 2010–2013 CIG Totem Storage $172 MM 8.4 Bcf / 0.9 Bcf/d & 1.2 Bcf/d WIC Piceance $154 MM (100%) Sep 2008 Lateral July 2009 140 MMcf/d $62 MM SNG Cypress Phase III 200 MMcf/d 4Q 2009 $86 MM 220 MMcf/d Jan 2011 CIG Raton 2010 160 MMcf/d Expansion TGP Carthage TGP Bluewater / 800 Ln Exp $146 MM Expansion $25 MM 2Q 2010 $39 MM SNG South System III/ Nov 2008 130 MMcf/d May 2009 SESH Phase II 340 MMcf/d 100 MMcf/d $352 MM / $69 MM 2011–2012 Gulf LNG 370 MMcf/d / 350 MMcf/d $1+ Billion (100%) Oct 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 August 6, 2008; El Paso Pipeline Partners owns 10% of SNG & CIG 8
  9. 9. Ruby Pipeline Update 670 miles of 42quot; pipeline Market commitments of 1.1 Bcf/d $3 billion capex 100% of pipe ordered 1.3–1.5 Bcf/d capacity Incentive-based construction contracts 2011 in-service On the ground since mid-2007 Malin OR ID WY Tuscarora Opal Hub PG&E WIC Ruby Pipeline Cheyenne Paiute Cheyenne CA Plains Uinta Kern River Basin NV CO Piceance Basin CIG UT 9
  10. 10. Ruby—Substantial “On the Ground” Planning Aerial studies in 2007 Completed subsurface route studies Detailed centerline survey essentially complete Biological & archeological studies 95% complete 10
  11. 11. FGT Phase VIII AL Proposed Pipeline Expansion GA FGT $2.4 billion (100%) 50% EP, 50% SUG FL 500 miles 800 MMcf/d capacity Over 700 MMcf/d firm long-term commitments 2011 in-service 11
  12. 12. TGP Line 300 Expansion NH VT Marcellus Interconnects MA NY CT MI RI NJ REX-TGP PA Interconnect OH 125 miles of 30quot; looping 15-year contract for 300 MDth/d EQT with Equitable Energy LLC Production WV $750 MM capex 2010–2011 in-service Locked in pipe cost VA KY 12
  13. 13. LNG Assets Provide Committed Growth Elba Island LNG Gulf LNG Savannah, GA Pascagoula, MS $1.1 Billion expansion (terminal & pipeline) $1.1 Billion (100%); 50% EP 8.4 Bcf incremental storage capacity $870 MM non-recourse financing 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 EPC with CBI EPC with Aker Kvaerner 13
  14. 14. Top 10 Domestic Independent Nile Delta Sinai Brazil Gulf Egypt of Egypt Suez Rio de Janeiro Brazil Egypt 247 Bcfe of proved reserves Onshore conventional exploration 2 significant development Domestic projects 1.2 MM acres Primarily coal seam and tight-gas More exploration potential First drilling 4Q 2008 programs with 24 prospects/leads Low to medium-risk repeatable plays 97% drilling success rate Growing unconventional inventory Note: Based on 2007 data 14
  15. 15. Significant Resource Inventory* Infill drilling (CBM, Altamont, Arklatex) Emerging shale gas plays Upside (Niobrara and Haynesville) Potential International exploration leads 6.1 Tcfe unrisked non-proved resources 2.8 Tcfe 2.0 Tcfe risked unconventional and low risk Unproved Inventory 95%+ success rate Heavily weighted to U.S. Onshore (86%) 2.8 Tcfe Proved 869 Bcfe Proved Undeveloped Reserves Reserves R/P of 9.6 *As of 12/31/2007 adjusted for 2008 domestic divestitures 15
  16. 16. New Shale Opportunities Haynesville Niobrara CO NM Current prospective area April 2008 prospective area Niobrara Shale Wells drilled, drilling & permitted Test well locations Approximately 42,500 net acres 3 wells drilled and completed 2 horizontal and 1 vertical 1 well drilled Initial flow rates of 0.4–1.8 MMcfe/d Second well drilling $2 MM–$3 MM completed well costs Significant resource potential > 300,000 prospective net acres 16
  17. 17. Down Spacing Opportunities Raton Altamont-Bluebell WY CO UT NM Increased Density Drilling CBM Increased Density Drilling Pursuing 160-acre spacing Pursuing 80-acre spacing Hearing in September Hearing held in July with state of 175–200 gross locations and New Mexico >30 MMBOE risked resource Would add 500 gross locations and potential 250 Bcfe risked resource potential 17
  18. 18. Brazil Developments Gas Pinaúna Discovery well BM-ES-5 Block 1-BAS-64 BAS- 1-BAS-74 BAS- Petrobras: 65% Operator 1-BAS-73 BAS- El Paso: 35% 4-ESS-177 Camarupim Açai 1-ELPS- ELPS- 6-ESS-168 1-ELPS- ELPS- 160 170A Cacau 4-ESS-164 Açai East 2.5 km 0 1.5 2.5 BES-100 Camarupim DOC Area Resource Outlook Petrobras: 100% Oil Gas 24% EP working interest 100% working interest 35–50 MMcfe/d net peak production 15–20 MBOE/d peak production 100–120 Bcfe net resources 59–90 MMBOE total resource potential First gas in 1Q 2009 4 development wells 18
  19. 19. Egypt Position Nile Delta Sinai Gas Field Asset Overview: Gulf Egypt Oil Field of 1.18MM Acres Egypt Suez Significant recent discoveries 10 prospective areas 174 Bcfe net risked resource South Mariut—100% WI potential 1.18 MM acres (4,785 km2) Area: 757 Bcfe net unrisked resource Status: Signed April 2007 Phase 1, 3 year term potential Work Program: 3D seismic survey 5 wells NILE Asset Update: Seismic completed in Q2 DELTA Alexandria Location of first well selected 10 prospective areas PLAY Rig in country First well to spud Q4 2008 * Phase 1 exploration estimate WESTERN **@ $70/bbl) Other Opportunities: Evaluating options to expand DESERT existing position 20 KMS PLAY 19
  20. 20. Tangible Results from High Grading $/Mcfe $2.01 $1.92 $1.92 $0.33 $0.54 $0.42 $0.06 $0.04 $0.05 $0.68 $0.64 $0.63 $1.59 $1.50 $1.47 $0.85 $0.82 $0.79 2Q 2007 1Q 2008 2Q 2008 Direct Lifting Costs General & Administrative Taxes Other Than Production & Income Production Taxes Controllable unit costs down 7% yr/yr 20
  21. 21. 2009 Natural Gas and Oil Hedge Positions Positions as of July 15, 2008 Cap: 151 TBtu @ Average $14.97/MMBtu Gas Floor: 176 TBtu @ Average $9.02/MMBtu Balance at Market Price 3.43 MMBbls Oil $109.93 fixed price >50% of oil and domestic natural gas hedged 2009 hedge program enhances revenues by approximately $270 MM Note: See full Production-Related Derivative Schedule in Appendix 21
  22. 22. Summary Solid financial results YTD Adjusted EPS up 57% Cash flow from operations up 52% Pipelines $8 billion backlog EBIT growth 10%+ (2008–2013) E&P Inventory continues to grow 8%-12% production growth (2007–2010) Excellent outlook for both businesses 22
  23. 23. El Paso Corporation Doug Foshee President & Chief Executive Officer Lehman CEO Energy/Power Conference September 3, 2008
  24. 24. Appendix
  25. 25. 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. 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. 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. 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. 25
  26. 26. E&P Cash Costs 2Q 2007 1Q 2008 2Q 2008 Total Per Unit Total Per Unit Total Per Unit ($ MM) ($/Mcfe) ($ MM) ($/Mcfe) ($ MM) ($/Mcfe) $ 346 $ 4.84 $ 377 $ 5.11 $ 374 $ 5.40 Total operating expense (189) (2.64) (212) (2.87) (197) (2.84) Depreciation, depletion and amortization (15) (0.22) (19) (0.26) (21) Transportation costs (0.31) (4) (0.06) (5) (0.06) (10) Costs of products (0.15) – – – – (7) Other (0.09) $ 1.92 $ 1.92 $ 2.01 Per unit cash costs* 71,493 73,762 69,366 Total equivalent volumes (MMcfe)* *Excludes volumes and costs associated with equity investment in Four Star 26
  27. 27. Reserves Pro Forma Reconciliation Onshore Central Western TGC GOM Int’l Total Reserves (Bcfe) Ending reserves 1/1/08 1,328 715 550 269 247 3,109 Adjustments* (58) (40) (93) (118) – (309) Pro forma ending reserves 1/1/08 1,270 675 457 151 247 2,800 *Adjustments reflect elimination of divestiture properties and addition of Peoples for full-year 2007 27
  28. 28. Exploration and Production in Brazil Potiguar Basin Pescada-Arabaiana Production Camamu Basin Pinaúna Development 2 exploration wells 3 prospects, 11 leads Brazil Stats 361,000 net acres 12 MMcfe/d Espirito Santo Basin Rio de Janeiro Camarupim (Bia) development 247 Bcfe reserves 2 exploration wells 695 Bcfe risked non-proved 3 prospects, 7 leads resource potential 47 R/P 28
  29. 29. 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 2.3 $ 3.49 4.6 $ 3.56 4.6 $3.70 6.8 $3.88 Fixed price 10.6 $ 8.37 Ceiling 62.9 $ 10.84 101.0 $ 14.58 Floor 62.9 $ 8.00 125.8 $ 8.93 Economic—EPEP Fixed price 3.7 $ 8.24 3.7 $ 12.06 Ceiling 18.4 $ 10.45 41.9 $ 17.40 Floor 18.4 $ 8.00 41.9 $ 9.61 Avg. ceiling 97.9 $ 10.23 151.1 $ 14.97 4.6 $3.70 6.8 $3.88 Avg. floor 97.9 $ 7.94 175.9 $ 9.02 4.6 $3.70 6.8 $3.88 2008 2009 Notional Avg. Hedge Notional Avg. Hedge Crude Oil Price Volume Volume Price ($/Bbl) (MMBbls) (MMBbls) ($/Bbl) Designated—EPEP Fixed price 1.26 $ 87.80 1.93 $109.32 Economic—EPEP Fixed price 1.50 $110.71 Economic—EPM Ceiling 0.45 $ 56.40 Floor 0.45 $ 55.00 Avg. ceiling 1.71 $ 79.54 3.43 $109.93 Avg. floor 1.71 $ 79.17 3.43 $109.93 29 Note: Positions are as of July 15, 2008 (Contract months: July 2008–Forward)