HOUSTON, TEXAS, June 18, 2004—El Paso Corporation (NYSE:EP) announced today that it has closed the sale of 100 percent of its equity interests in Utility Contract Funding (UCF) to Bear Stearns' Houston Energy Group, via a wholly owned subsidiary of The Bear Stearns Companies Inc., for approximately $21 million. UCF assets include a power contract that was restructured as part of the company's previous power restructuring activities. El Paso will take a pre-tax charge of approximately $100 million on this sale based on the company's investment in the equity of this entity. The transaction will eliminate approximately $815 million of non-recourse debt associated with UCF that El Paso currently consolidates.

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.