Houston, Texas, October 23, 1997-El Paso Energy Corporation (NYSE:EPG) reported third quarter earnings per share of $0.77, up ten percent compared to $0.70 per share for the same period a year ago. Third quarter net income for 1997 was $44 million with 57.4 million average common shares outstanding, compared to 1996 third quarter net income of $25 million with average common shares outstanding of35.3 million.

Operating income increased 82 percent to $120 million during the third quarter of 1997, versus $66 million in the year ago period. The increase in operating income was primarily attributable to the Tenneco Energy acquisition completed in December 1996. Earnings before interest expense and income taxes (EBIT) for the third quarter totaled $140 million, compared to $65 million for the third quarter 1996, reflecting both the Tenneco Energy acquisition and an increased contribution from the El Paso Natural Gas Company transmission operations.

Natural Gas Transmission Segment

The Natural Gas Transmission segment reported third quarter operating income of $131 million compared to $57 million a year ago. The third quarter 1997 results include a $64 million contribution from El Paso Natural Gas Company and a $67 million contribution from Tennessee Gas Pipeline Company. Total throughput for the third quarter averaged 8,481 billion Btu per day (BBtu/d), consisting of 3,800 BBtu/d on the El Paso system and 4,681 BBtu/d on the Tennessee system. Transmission segment EBIT totaled $141 million in the 1997 quarter versus $57 million for the same period last year.

Corporate and Other Segment

Corporate and Other segment operating expenses for the third quarter totaled $24 million, primarily consisting of $6 million of development expenses for the company's international activities, $6 million of discontinued operations expense assumed as part of the Tenneco Energy acquisition, $6 million of severance and relocation charges, and $4 million for amortization of employee equity incentive plans. Earnings from equity investments in international projects, net of development expenses, totaled $2 million in the quarter.

"Each of our business units made a significant contribution toward El Paso Energy's double digit earnings growth in the third quarter of 1997, and we are particularly pleased with the progress made by our marketing unit," said William A. Wise, chairman, president and chief executive officer. "We also demonstrated continued success in investing for future growth through such announced projects as the Gulf States Pipeline acquisition, the Berkshire merchant power plant in Massachusetts, four power plants in Brazil, and the development of our Eastern Express 2000 and Express 500 expansions on the Tennessee Gas Pipeline system."

El Paso Energy Corporation provides total energy solutions through five business units: El Paso Natural Gas Company, Tennessee Gas Pipeline Company, El Paso Field Services Company, El Paso Energy Marketing Company and El Paso Energy International Company. With offices worldwide, the company has operations in interstate natural gas transmission, gas gathering and processing, energy marketing, and international energy infrastructure development.

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. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that the anticipated future results will be achieved. Reference should be made to the company's (and its affiliates') Securities and Exchange Commission filings for additional important factors that may affect actual results.