Houston, Texas, March 24, 1999-El Paso Field Services Company, a business unit of El Paso Energy Corporation (NYSE:EPG), announced today that it has acquired EnCap Investments L.C. (EnCap) for $52 million in cash and stock. EnCap is one of the industry's premier institutional funds management firms specializing in financing independent oil and gas producers. EnCap manages three separate institutional oil and gas investment funds in the United States, as well as Energy Capital Investment Company PLC, a publicly traded investment company in the United Kingdom. Commitments to these funds are currently in excess of $600 million and are provided by fifty United States and European institutional investors.

EnCap, with offices in Houston and Dallas, Texas, was formed in 1988 to provide non-traditional capital from institutional funding sources to the oil and gas industry. Since inception, the company has created nine funds with aggregate capital commitments exceeding $1 billion. EnCap has also closed in excess of $4 billion in oil and gas financing or advisory transactions, making it one of the leaders in this specialized field. EnCap principals David Miller, Gary Petersen, Marty Phillips and Bob Zorich will continue to manage EnCap and its institutional funds and will join the senior management team of El Paso Field Services.

According to Robert G. Phillips, president of El Paso Field Services, "As one of the largest gatherers and processors of natural gas in the industry, we are committed to assisting oil and gas producers in every facet of their businesses to develop and market new energy supplies. The EnCap acquisition will allow us to expand the portfolio of services we currently offer to the production community and play a significant role in the future capitalization of the independent exploration and production segment. Furthermore, we plan to leverage this financing expertise to support other non-traditional financing requirements in the energy sector, both domestically and internationally, benefiting El Paso Energy's fastest-growing businesses."

With over $10 billion in assets, El Paso Energy Corporation provides energy solutions through five business units: Tennessee Gas Pipeline Company, El PasoNatural Gas Company, El Paso Field Services Company, El Paso Energy Marketing Company, and El Paso Energy International Company. The company owns the nation's only integrated coast-to-coast natural gas pipeline system and has operations in interstate natural gas transmission, gas gathering and processing, energy marketing, and international 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 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.