1. El Paso Corporation
Brent Smolik
President, El Paso Exploration & Production
IPAA OGIS 2008 Conference
October 7, 2008
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. Defining Our Purpose
El Paso Corporation provides
natural gas and related energy
products in a safe, efficient, and
dependable manner
3
4. Our Vision & Values
the place to work
the neighbor to have
the company to own
4
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. 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. El Paso Exploration and Production
Company Profile
Low-risk domestic drilling program
Low-cost producer
Significant non-proved inventory
Emerging international program
7
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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. El Paso Corporation
Brent Smolik
President, El Paso Exploration & Production
IPAA OGIS 2008 Conference
October 7, 2008
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 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,
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. 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
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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