El Paso Corp. (ticker: EP, exchange: New York Stock Exchange (.N))
News Release -
El Paso Corporation Announces Highlights of February 5 Analyst Meeting, Including Telecommunications Strategy
HOUSTON, TEXAS, February 5, 2001ŚEláPaso Corporation (NYSE:EPG), the largest and most broadly based natural gas company in the world, began its
annual analyst meeting in Houston today at 3:00 p.m. Central Standard Time
(CST). Copies of the slides being presented as well as a live audio Web
cast are available on the company's Web site at www.epenergy.com/investor.
At today's meeting, William A. Wise, EláPaso's chairman, president and
chief executive officer, and members of the company's management team are
reviewing many of the company's strategies and initiatives to achieve
20-percent plus earnings growth in 2001. EláPaso's Merchant Energy
segment, which now includes EláPaso's North American natural gas and power
merchant operations, the company's international assets, and the petroleum
assets and trading obtained through the Coastal merger, is expected to
deliver $1.2 billion in earnings before interest and taxes (EBIT) in 2001.
The company expects long-term growth for the segment to exceed 25 percent.
The North American operations are expected to generate $700 million of
2001 EBIT, up almost 40 percent from EláPaso's standalone 2000 EBIT. El
Paso Merchant Energy is aggressively extending its merchant model to new
markets in worldwide petroleum, global liquefied natural gas, Europe, and
EláPaso also is introducing its telecommunications strategy at this
meeting. EláPaso Global Networks is pursuing a strategy that will leverage
EláPaso's knowledge of commodity and capital markets with
telecommunications market skills in order to identify and capture value in
the emerging telecommunications industry. EláPaso Global Networks'
strategy of end-to-end liquidity includes three major components-access to
fiber deep within metro markets to aggregate supply in major U.S. cities;
utilizing fiber rings and key points of interconnection of major carriers
and service providers to allow for liquidity to develop in major markets;
and a high-capacity, fiber-efficient national long-haul backbone. EláPaso
Global Networks will overlay against this asset base a merchant-based
operating support system and valuation models that will allow the company
to apply the merchant skills developed in EláPaso's core energy businesses
to this rapidly changing market. EláPaso Global Networks expects to invest
approximately $2 billion in capital over the next four years to develop
EláPaso Global Networks is building and acquiring fiber assets
throughout the United States. The company is finalizing the deployment of
an extensive fiber optic network in the major Texas markets that will be
the first step in its national deployment of EláPaso Global Networks'
end-to-end liquidity strategy. To date, EláPaso Global Networks has been
one of the most active market makers in the emerging bandwidth trading
market, having completed more than 260 transactions covering approximately
two billion DS-0 miles since the beginning of 2000, including the
industry's first bandwidth option.
"The opportunity to extend our merchant platform to the
telecommunications industry offers significant value creation potential
for our shareholders," said Wise. "EláPaso Global Networks
brings a unique vision to the telecommunications industry, and has made
significant progress to duplicate the success that EláPaso Merchant Energy
has achieved in the natural gas and power markets. We expect this business
to generate positive operating cash flow by the end of 2003, but more
importantly, we firmly believe that EláPaso Global Networks has created $7
billion to $10 billion of current value based upon opportunities that have
already been identified."
EláPaso Production Company, one of North America's largest natural gas
producers, expects to achieve an average daily production rate of 1.85
billion cubic feet of natural gas equivalent per day. Approximately 75
percent of its expected 2001 production is hedged at an average NYMEX
price of $3.70 per thousand cubic feet (Mcf). The company expects to
generate $1.3 billion of EBIT for 2001 assuming a March through December
2001 average NYMEX spot price of $5.50 per Mcf.
EláPaso expects to generate $1.7 billion in net income-or $3.25 per
share-in 2001, a 21-percent increase over 2000. Non-regulated businesses
are expected to continue to grow rapidly and generate 67 percent of total
The analyst meeting will resume at 8:00 a.m. CST on February 6.
Presentation slides and a live Web cast will again be available on the
company's Web site.
EláPaso Corporation is the largest and most broadly based natural gas
company in the world with global operations that span the energy value
chain. With an enterprise value in excess of $50 billion, the company owns
and operates a significant portion of the North American natural gas
delivery grid, holds a substantial power portfolio, and is the nation's
third largest natural gas producer. EláPaso, a leader in real options
valuation and risk management techniques, is focused on maximizing
shareholder value, transforming existing markets, and speeding the
development of new markets. Visit EláPaso at www.epenergy.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