El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Corporation Announces Two Exploration and Production Acquisitions
HOUSTON, TEXAS, January 31, 2005ŚEl Paso Corporation (NYSE:EP) announced today two exploration and production acquisitions in east Texas and south Texas totaling $211 million. With these acquisitions, EláPaso is adding properties with approximately 124 billion cubic feet equivalent of proved reserves and 29 million cubic feet equivalent per day (MMcfe/d) of average net production. Both acquisitions offer significant future drilling opportunities and fit well with EláPaso's existing operations. Approximately 59 percent of the reserves are proved undeveloped. Both acquisitions are being made within EláPaso Production Holding Company.
In east Texas, EláPaso signed an agreement to purchase a privately held exploration and production company with operations in Rusk and Shelby counties for approximately $179 million. When this transaction closes, EláPaso will acquire 52 wells and associated gathering infrastructure with 20 MMcfe/d of production from the Cotton Valley and Travis Peak formations. EláPaso will also acquire six additional wells that are currently being drilled or completed, 77 proved undeveloped locations, and significant additional potential development and exploration opportunities. The transaction is subject to the approval of the seller's shareholders.
In south Texas, EláPaso purchased assets in the Samano (Vicksburg) Field located in Starr and Hidalgo counties for approximately $32 million. The acquisition includes 26 wells that are producing approximately 9 MMcfe/d and the associated gathering system. El Paso is the largest producer in the Samano Field and operates producing properties directly adjacent to these properties.
"I am excited to announce acquisitions that strengthen our positions in south and east Texas," said Lisa Stewart, president of EláPaso's non-regulated operations. "We are adding a significant number of low-risk development locations to our inventory as well as properties that offer additional exploration upside. We also expect to achieve operating synergies as we integrate these properties into our operations."
In light of these acquisitions, EláPaso now expects its 2005 Production capital budget to be approximately $900 million. The company will provide updated 2005 production volume guidance when it holds its annual analyst meeting on March 17, 2005.
El Paso Corporation provides natural gas and related energy products in a safe, efficient, dependable manner. The company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. For more information, visit www.elpaso.com.
This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 release, including, without limitation, the ability to implement and achieve our objectives in the long-range plan, including achieving our debt-reduction targets; our ability to successfully execute, manage and integrate acquisitions; the uncertainties associated with governmental regulation; 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.