HOUSTON, TEXAS, July 26, 2001—El Paso Corporation (NYSE:EPG) announced that on July 23, 2001, its wholly owned subsidiary, El Paso Oil & Gas Canada Acquisition, Inc., received final regulatory approval under the Investment Canada Act to acquire all issued and outstanding common shares of Velvet Exploration Ltd. (TSE:VLV).

The Honourable Brian Tobin, Minister of Industry and Minister responsible for Investment Canada, approved the transaction on the basis El Paso's investment is likely to benefit the Canadian economy.

El Paso's C$8.15 per share cash offer for all outstanding common shares of Velvet is scheduled to expire at 5:00 p.m. Mountain Daylight Time on July 31, 2001. Holders of Velvet shares are urged to read the offer documents containing important information about El Paso and Velvet in the proposed transaction.

El Paso Corporation is committed to meeting energy needs throughout North America and the world with operations that span the energy value chain from wellhead to electron. The company is focused on speeding the development of new energy sources to address critical energy shortages across the globe. Visit El Paso at 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. 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.