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el paso AGAFinancialForum_FINAL(Web)
- 1. a meaningful company doing meaningful work delivering meaningful results Mark Leland Executive Vice President and Chief Financial Officer AGA Financial Forum April 30, 2007
- 2. Cautionary Statement Regarding Forward-looking Statements 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, such as net risked resource, that the SEC. U.S. Investors are urged to consider closely the disclosures regarding proved reserves in this presentation and the disclosures that will be contained in our Form 10-K for the year ended December 31, 2006, File No. 001-14365, available from 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. 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. Forward-looking statements include statements regarding our plans for 2007 and our expected financial and operating results for 2007, as well as other statements regarding matters other than historical fact. The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, our ability to implement and achieve our objectives in the 2007 plan; 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; our ability to successfully create, market and operate a master limited partnership and complete related financing transactions; changes in commodity prices for oil, natural gas, and LNG; 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; competition; and other factors described in the company’s (and its affiliates’) Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward- looking statements made by the company, whether as a result of new information, future events, or otherwise. 2
- 3. Defining Our Purpose El Paso Corporation provides natural gas and related energy products in a safe, efficient, and dependable manner 3
- 4. Creating a New Culture the place to work the neighbor to have the company to own 4
- 5. El Paso Pipeline Group—Leading Franchise • Unparalleled market presence • Excellent expansion inventory • Visible 4%–6% EBITDA* growth • Clear valuation upside *Non-GAAP term 5
- 6. El Paso Pipeline System Tennessee Wyoming Gas Pipeline Interstate Colorado Interstate Gas Cheyenne Plains Pipeline Mojave Pipeline Southern Natural Gas Elba Island El Paso LNG Natural Gas Mexico Florida Gas Ventures Transmission (50%) • 19% of total U.S. interstate pipeline mileage • 23 Bcf/d capacity (16% of total U.S.) • 16 Bcf/d throughput (28% of gas delivered to U.S. consumers) 6
- 7. Pipeline Group—What Sets Us Apart • Best market presence – Market centers – Connectivity • Best access to supply – Gulf of Mexico – LNG – Rockies • Disciplined growth • Excellent project execution 7
- 8. Pipelines Well Aligned With Demand & Supply Growth 2005–2015 Growth in Bcf/d Canadian LNG +0.9 Rockies Supply Northeast +3.8 Demand +2.1 Southwest Demand +1.5 Elba Southeast LNG Demand +1.4 +4.9 Mexico LNG Gulf of +2.5 Mexico LNG Mexico +6.8 Demand +2.6 8 Source: El Paso Corporation
- 9. Significant Connectivity VT ID SD NH WY NE Boston MA NY RI CT Denver UT New York NJ CO PA • 63 supply meters in the Rockies • 110 delivery meters along the Front Range • 97 delivery meters into 26 LDCs UT NV SC Atlanta Birmingham CA AZ NM Phoenix GA AL FL • 344 delivery meters in Arizona • 155 delivery meters into Alagasco and AGL 9
- 10. Organic Growth Opportunity: Superior Supply Connectivity Big Horn Wind River Powder River Green River Denver-Julesburg Uinta Piceance San Juan Raton Anadarko Permian WIC CIG EPNG Mojave Cheyenne Plains 10
- 11. LNG Opportunities Elba Island LNG $1.2 billion of LNG-related projects El Paso has 28% of Gulf of Mexico takeaway capacity Existing Terminal Certificated Terminal 11
- 12. Value Added Projects More than $2 billion of committed growth TGP Essex- Middlesex TGP NE ConneXion $47 MM New England WIC Kanda Lateral November 2007 $103 MM $141 MM 82 MMcf/d November 2007 WIC Medicine Bow 2008 136 MMcf/d Expansion—2008 January 2008 $18 MM Up to 410 MMcf/d July 2008 205 MMcf/d CIG High Plains Pipeline $145 MM (50%) CP Shell Expansion December 2008/July 2009 $21 MM 965 MMcf/d April 2008 70 MMcf/d SNG Elba Expansion III CIG Raton Expansion & Elba Express SESH Interest $12 MM $930 MM $170 MM December 2007 2010–2012 June 2008/October 2010 29 MMcf/d 8.4 Bcf / 900 MMcfd 137 MMcf/d/ 490 MMcf/d EPNG Mexico Lateral Loop TGP Carthage $36 MM Expansion SNG Cypress Phase I / II November 2008 $35 MM $255 MM/$19 MM 127 MMcf/d May 2009 May 2007/May 2008 100 MMcf/d 220 MMcf/d/116 MMcf/d Mexico JV—LPG TGP Reynosa SNG South System III Eugene Island 371 $53 MM (50%) $133 MM–$286 MM $33 MM July 2007 Oct 2010–Apr 2012 September 2007 30,000 Bbl/d 245 MMcf/d–367 MMcf/d 200 MMcf/d FGT Phase VII TGP $63 MM LA Deepwater Link May 2007 $55 MM 60 MMcf/d July 2007 FERC Certificated/ Under Construction 850 MMcf/d Signed PA’s Expected PA’s Strong Positions 12
- 13. Pipeline Valuations • Valuations are increasing • Most M&A in 10x – 12x EBITDA range – Including ANR • MLP creates additional opportunities – Lower cost of capital – Valuation 13
- 14. El Paso MLP Strategy • Targeting fourth quarter 2007 for pipeline MLP • $500 MM asset value • El Paso pipelines are ideal MLP assets – Stable cash flow – Visible organic growth • Tax treatment will dictate ultimate potential 14
- 15. Appendix 15
- 16. Revenue Stability $2,500 $2,250 $2,000 2006 Revenue $1,750 ($ Millions) $1,500 $1,250 $1,000 82% $750 $500 91% 62% $250 91% 94% 94% $0 Total TGP SNG EPNG CIG FGT Demand Revenue (% of total Revenue) Demand as a % of total revenue increases over time 16
- 17. Contractual Certainty As of January 1, 2007 (Thousands of Dth/d) 47% 13,000 10,026 12,000 11,000 10,000 9,000 8,000 7,000 6,000 14% 5,000 14% 3,545 10% 3,524 4,000 8% 2,698 7% 3,000 2,186 1,773 2,000 1,000 0 2007 2008 2009 2010 2011 Beyond Average remaining contract term: 5.4 years 17
- 18. a meaningful company doing meaningful work delivering meaningful results Mark Leland Executive Vice President and Chief Financial Officer AGA Financial Forum April 30, 2007