Houston, Texas, January 18, 2000—El Paso Energy Corporation (NYSE:EPG) and The Coastal Corporation (NYSE:CGP) announced today the execution of definitive agreements for the merger of El Paso Energy and Coastal. The total value of the transaction is approximately $16 billion, including $6 billion of assumed debt and preferred equity. Each share of Coastal common stock and Class A common stock will be converted on a tax-free basis into 1.23 shares of El Paso Energy common stock. The outstanding convertible preferred stock of Coastal will be exchanged for El Paso Energy common stock on the same basis as if the preferred stock had been converted into Coastal common stock immediately prior to the merger. It is expected that the merger will be completed during the fourth quarter of 2000 and be accounted for as a pooling of interests. The total enterprise value of the combined company will exceed $32 billion, with an equity value of approximately $19 billion.

Ronald L. Kuehn, Jr., chairman of El Paso Energy Corporation, said, "This exciting combination of two strong companies will create a world-scale, integrated gas and power company which will clearly benefit from the convergence of these two industries."

"The merger is expected to be accretive to El Paso's earnings per share immediately and add more than five percent to EPS in both 2001 and 2002," said William A. Wise, president and chief executive officer of El Paso Energy. "With this merger, El Paso Energy will become the only company that is one of the top five companies in every sector of the wholesale natural gas and power arena, including natural gas transmission, production, gathering and processing, marketing, and power generation. As power generation becomes the largest consumer of natural gas, we believe integration along the full value chain will enhance profitability in each segment of our business."

"Coastal's growth strategies are in place to deliver double-digit earnings growth for the next several years," said David A. Arledge, chairman, president, and chief executive officer of The Coastal Corporation. "This transaction will provide the foundation of assets, personnel and financial strength to accelerate this growth and create a truly unique company which is a major player in all aspects of the converging North American natural gas and power markets."

Mr. Wise added, "Our two companies complement each other in strategically compelling ways. El Paso Energy's coast-to-coast pipeline system reaches from the west coast to the southeastern United States and then moves upward along the eastern seaboard to key markets in the Northeast; Coastal's ANR pipeline system covers strategic areas across the Midwest and Great Lakes regions, and its Colorado Interstate Gas system traverses the Rockies. The combined interstate transmission system of the new company will consist of over 58,000 miles of pipeline reaching all the major growth areas in the country, accessing every key supply source in North America, and moving more gas than any other energy company in the world. The combined company will be the second largest gatherer of natural gas in the United States and the third largest U.S. producer of natural gas—after BP Amoco and ExxonMobil—with over 5 trillion cubic feet of proved gas equivalent reserves. Together the companies control over 12,000 net megawatts of power generation worldwide. This breakout move assures greater growth opportunities for each of our business units.

"This merger is consistent with the strategy we have had in place for the past five years. We have acquired strategic assets, combined them efficiently, enhanced their presence in the marketplace, effectively managed commodity volatility, and utilized our expanded platform to develop new growth opportunities," Mr. Wise said. "Our track record of successfully combining and operating large energy organizations is second to none. After today's announcement, we will begin immediately assembling transition teams with key personnel from both organizations. This process has proven effective in our previous mergers, ensuring that we capture the best ideas, practices, and personnel from each organization and achieve a smooth transition to a single organization immediately upon closing. We expect to realize at least $200 million in cost savings annually when the two companies are merged into one.

"We believe the increased size, scope, and scale of the combined company will enhance our ability to continue delivering double-digit earnings growth and provide additional opportunities in the telecommunications and power transmission arenas. The 58,000 mile pipeline system will access over 70 percent of the U.S. population and provide secure, readily available pathways for data, voice, and power transmission," Mr. Wise continued.

The combined company will be headquartered in Houston, Texas. Ronald L. Kuehn, Jr. will remain chairman of the board of El Paso Energy Corporation until December 31, 2000. At that time, William A. Wise—the current president and chief executive officer of El Paso Energy—will assume the position of chairman in addition to continuing as president and chief executive officer of the new combined company. David A. Arledge, who is currently the chairman, president, and chief executive officer of The Coastal Corporation, will become the vice chairman and will oversee the non-regulated operations of the combined company. The Board of Directors for the combined company will consist of twelve directors—seven designated by El Paso Energy and five designated by Coastal.

The merger is subject to customary conditions, including approval by the stockholders of both companies and receipt of certain required governmental approvals. The merger agreement includes customary and reciprocal provisions regarding stock options, non-solicitation, termination fees, and expense reimbursements.

Donaldson, Lufkin & Jenrette Securities Corporation is acting as El Paso Energy's financial advisor for the transaction, while Merrill Lynch & Co. is advisor to The Coastal Corporation. The law firm of Fried, Frank, Harris, Shriver & Jacobson is El Paso Energy's legal advisor, and Coastal is represented by the law firm of Skadden, Arps, Slate, Meagher & Flom, LLP.

With over $16 billion in assets, El Paso Energy Corporation provides comprehensive energy solutions through its strategic business units: El Paso Natural Gas Company, Tennessee Gas Pipeline Company, Southern Natural Gas Company, El Paso Field Services Company, El Paso Merchant Energy Company, El Paso Production Company, and El Paso Energy International Company. The company owns North America's largest natural gas pipeline system, both in terms of throughput and miles of pipeline, and has operations in natural gas transmission, gas gathering and processing, gas and oil production, power generation, merchant energy services, and international project development. Visit El Paso Energy's web site at www.epenergy.com.

The Coastal Corporation is a Houston-based energy holding company with consolidated assets of more than $14 billion and subsidiary operations in natural gas transmission, storage, gathering/processing and marketing; oil and gas exploration and production; petroleum refining, marketing and distribution; chemicals; power production; and coal. Coastal's World Wide Web site at www.coastalcorp.com provides additional information on the company.

The Coastal Corporation Media Relations Contact
Greg Clock
Director
Office: 713-877-3993
Fax: 713-877-3299

The Coastal Corporation Investor Relations Contact
Stirling D. Pack
Vice President
Office: 713-877-6924
Fax: 713-877-1102

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, including, without limitation, oil and gas prices; general economic and weather conditions in geographic regions or markets served by El Paso Energy and The Coastal Corporation and their affiliates, or where operations of the companies and their affiliates are located; inability to realize anticipated synergies and cost savings on a timely basis; difficulty in integration of operations; and competition. While the companies make these statements and projections in good faith, neither company 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 (SEC) filings for additional important factors that may affect actual results.

INVESTOR NOTICE
Investors are urged to read the proxy statement/prospectus which will be included in the Registration Statement on Form S-4 to be filed with the SEC in connection with the proposed merger because it will contain important information. After it is cleared with the SEC, the proxy statement/prospectus will be available free of charge on the SEC's web site (www.sec.gov), from El Paso Energy Corporation's office of Investor Relations, and from Coastal's Corporate Secretary. In addition, the identity of the people who, under SEC rules, may be considered "participants in the solicitation" of El Paso Energy shareholders in connection with the proposed merger, and a description of their interests, is available in an SEC filing under Schedule 14A made by El Paso Energy Corporation on January 18, 2000.