HOUSTON, TEXAS, December 21, 2001

El Paso Corporation (NYSE:EPG) announced today that it completed a key element of its balance sheet enhancement plan with the agreement to sell $750 million of common stock at a net price of $42.50 per share through an underwritten public offering with J.P. Morgan Securities Inc. The sale price represents an approximate 5.6-percent discount to El Paso's $45.00 closing stock price on December 20, 2001. The underwriter retained a customary 15-percent over-allotment option.

"This placement demonstrates El Paso's ability to execute the balance sheet enhancement program successfully and quickly," said William A. Wise, president, chairman and chief executive officer of El Paso Corporation. "Timely implementation of this plan will allow us to gain market share during this time of industry uncertainty. We are now well on our way to achieving our goal of a 50-percent debt to total capital ratio."

On December 12, 2001, El Paso announced a four-step program to strengthen its capital structure, including the sale of assets, a reduction in capital spending, an increase in equity, and the renegotiation of certain debt covenants.

This plan ensures that El Paso will remain one of the strongest and most stable companies in the industry.

This announcement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of this common stock in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. A copy of the prospectus relating to the referenced offering may be obtained by contacting the underwriter.

El Paso Corporation is committed to meeting energy needs throughout the United States and the world, with operations that span the energy value chain from wellhead to electron. El Paso Corporation is involved in every segment of the natural gas industry, including production, gathering and processing, and transmission. The company also provides merchant energy services, international project development, energy financing, and power generation. El Paso is focused on speeding the development of new energy sources to address critical energy shortages across the globe. For more information, please visit www.elpaso.com.