El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Energy Corporation Increases Interest in Argentina Energy Company, Announces New Company
Houston, Texas, February 2, 1998-EláPaso Energy International Company,
a business unit of EláPaso Energy Corporation
(NYSE:EPG), announced today it has increased its ownership interest from 33 percent to 45
percent in CAPSA, a privately-held, integrated energy company in Argentina. EláPaso
Energy invested $65 million to acquire the additional 12 percent ownership in the
transaction which closed on January 30, 1998. EláPaso Energy originally purchased a
29 percent interest in the company in March 1997, and exercised an option for an
additional 4 percent in August 1997.
CAPSA was incorporated in 1977 for the purpose of exploring for, producing, and selling
liquid hydrocarbons. The company's assets include 100 percent ownership of the
Diadema Oil Field and 55 percent ownership of CAPEX, a publicly traded company that owns,
and recently began an expansion of its 382-megawatt Agua del Cajon gas-fired power plant
to 670 megawatts. This plant, which has been fully operational since 1995, buys gas from
the Agua del Cajon gas field, owned by CAPSA. In the past year, CAPSA has also increased
its reserve holdings by 51 percent, and began construction on a new Liquid Propane Gas
(LPG) processing plant in September 1997 which will be operated by El Paso Field Services
Company, a business unit of EláPaso Energy Corporation.
"We're pleased to increase our ownership in CAPSA and proud to be a partner
in such a solid and well-managed company," said William A. Wise, chairman, president,
and chief executive officer of EláPaso Energy Corporation. "Partnering with
CAPSA creates additional opportunities to expand our investments throughout the Mercosur
EláPaso Energy International, CAPEX, and InterEnergy have also formed a new
development company called Triunion Energy Company to seek out additional business
opportunities related to new energy projects in Latin America. CAPEX will provide the
day-to-day administrative and management services for most of the projects within the
joint venture. Triunion Energy also will house EláPaso's Energy's asset
interest in an exploration and production project in Charagua, Bolivia (adjacent to the
Bolivia-to-Brazil pipeline project which is under construction), as well as its interest
in the Gasoducto del Pacifico pipeline project. This $400 million natural gas pipeline
will stretch 331 miles across the Andes mountains and connect Argentina's NeuquÚn
basin to customers in Concepciˇn, Chile. Construction on the pipeline is scheduled to be
underway early this year with an expected in service day of late 1999.
"The opportunity to extend our development efforts into Southern Latin America
through Triunion Energy fits perfectly into our strategic international growth plan,"
said John Hushon, president of EláPaso Energy International.
With over $9 billion in assets, EláPaso Energy Corporation provides energy
solutions through five business units: Tennessee Gas Pipeline Company, EláPaso
Natural Gas Company, EláPaso Energy International Company, EláPaso Field
Services Company and EláPaso Energy Marketing Company. The company owns the
nation's only integrated coast-to-coast natural gas pipeline system and has
operations in interstate natural gas transmission, international infrastructure
development, gas gathering and processing, and energy marketing.
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 companies have 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 companies make these statements and projections in good faith,
neither the companies nor their managements can guarantee that the anticipated future
results will be achieved. Reference should be made to the companies' (and their
affiliates') Securities and Exchange Commission filings for additional important
factors that may affect actual results.