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  1. 1. El Paso Corporation Brent Smolik President, El Paso Exploration & Production IPAA OGIS 2008 Conference October 7, 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, cash costs, and net capital, 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. 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 6
  7. 7. El Paso Exploration and Production Company Profile Low-risk domestic drilling program Low-cost producer Significant non-proved inventory Emerging international program 7
  8. 8. Portfolio Provides Excellent Mix of Long-Life and High-Return Programs $6 60% $5 50% Rate of Return % $4 40% F&D/Mcfe (ROR) $3 30% $2 20% $1 10% $0 0% Coal Seam Tight Gas Texas Gulf Offshore Arklatex Coast F&D Costs Rate of Return Note: Returns and F&D exclude leasing, seismic, workover, equipment, and admin capital; assumes Plan pricing of $7.50/MMBtu and $70/Bbl 8
  9. 9. Recent High Grading Boosts Inventory, Lowers Unit Costs Bought Sold Peoples Energy Miscellaneous assets (~300 Bcfe) (~300 Bcfe) Arklatex & Texas Gulf Coast > 50% Gulf of Mexico Low-cost High-cost Add net ± 450 locations Low inventory 10,000 net Haynesville acres 9
  10. 10. 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 10
  11. 11. Significant Resource Inventory* Infill drilling (CBM, Altamont, Arklatex) Emerging shale gas plays Upside (Niobrara and Haynesville) Potential International exploration leads 2.8 Tcfe 6.1 Tcfe unrisked non-proved resources Unproved 2.0 Tcfe risked unconventional and low risk Inventory 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 11
  12. 12. Arklatex AK Production (MMcfe/d) Vacherie Dome/ 200 Bear Creek 150 TX Minden/SE 100 Brachfield LA 50 0 Holly/Bethany Longstreet/Logansport 2006 2007 2008 2009 2010 Program Statistics: 2008 Plan: • 1,047 operating wells 125 - 130 gross wells • 80% avg. WI ~ $350 MM net capital • 426 PUD locations • 222 Bcfe PUD reserves Value Upside: • 404 non-proved locations Cotton Valley horizontals • 540 Bcfe unrisked resource potential Haynesville Shale • 504 Bcfe risked resource potential Infill potential • 11 R/P 12
  13. 13. Haynesville Shale Play Outline: North Louisiana & East Texas Marion Upshur Claiborne Webster Caddo Bossier Harrison Travis Lynch #4H Gregg Completing Bienville Panola Red River Desoto Miller 10H #1 Rusk Completed Gamble 24H Drilling Approximately 42,500 net acres Shelby Natchitoches of Haynesville leases Current prospective area El Paso operated wells Horizontal wells drilled by others 13
  14. 14. CO Niobrara Shale VPR E-17A Typical CBM 1.0 MMcf/d NM well VPR D-95A VPR A-6A 1.8 MMcf/d 0.4 MMcf/d Niobrara Shale Test well locations 1,000' Raton Coal Vermejo Coal 2,000' Trinidad Coal 3,000' Pierre Shale 3,900' 4,000' Niobrara A Shale 5,000' Niobrara B Shale 3,000' Perforations Niobrara C Shale 14
  15. 15. Down Spacing Opportunities Raton Altamont-Bluebell WY CO UT NM 20 miles 20 miles CBM Increased Density Drilling Increased Density Drilling – Pursuing 160-acre spacing – Pursuing 80-acre spacing – Hearing in September – Hearing held in July with state of New Mexico 175–200 gross locations and >30 MMBOE risked resource – Would add 500 gross potential locations; 250 Bcfe risked resource potential 15
  16. 16. Brazil Developments Camarupim Project Pinaúna Project Gas Pinaúna Discovery well BM-ES-5 Block 1-BAS-64 1-BAS-74 Petrobras: 65% Operator 1-BAS-73 El Paso: 35% 4-ESS-177 Camarupim Açai 1-ELPS-160 6-ESS-168 1-ELPS-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 First production late 2009 4 development wells 16
  17. 17. 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 WESTERN Other Opportunities: • Evaluating options to expand DESERT existing position 20 KMS PLAY 17
  18. 18. Summary Domestic program provides predictable, profitable growth Haynesville, Niobrara and infill drilling provide new depth of opportunities Brazil development adds significant volumes beginning 2009 Future exploration upside from Brazil and Egypt 18
  19. 19. El Paso Corporation Brent Smolik President, El Paso Exploration & Production IPAA OGIS 2008 Conference October 7, 2008
  20. 20. Appendix
  21. 21. 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 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; 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 and cost of products and services divided by total production. Net capital is the company’s proportionate share of estimated capital requirements and is useful to indicate the amount of capital the company may spend. 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. 21
  22. 22. Reserves Pro Forma Reconciliation Onshore Central Western TGC GOM Int’l Total Reserves (Bcfe)1 Ending reserves 1/1/08 1,328 715 550 269 247 3,109 Adjustments2 (58) (40) (93) (118) – (309) Pro forma ending reserves 1/1/08 1,270 675 457 151 247 2,800 1 Reserves data includes proportionate share of Four Star 2 Adjustments reflect elimination of divestiture properties and addition of Peoples for full-year 2007 22
  23. 23. 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 23