El Paso Corporation (NYSE: EP) announced today the following forecasts
for its exploration & production business unit:
-
Proved oil and natural gas reserves of approximately 4.0 trillion
cubic feet equivalent (Tcfe) at December 31, 2011 -- an increase
of approximately 18 percent from the 3.4 Tcfe reported as of December
31, 2010
-
Year-end risked future drilling inventory of approximately 9.7 Tcfe,
up from 8.0 Tcfe at December 31, 2010, with the majority of the
increase coming from oil shale programs in the Eagle Ford and
Wolfcamp. The 9.7 Tcfe risked future drilling inventory estimate
includes approximately 2.0 Tcfe of proved undeveloped reserves and 7.7
Tcfe of risked unproved resources. Approximately 60 percent the 9.7
Tcfe of risked future drilling inventory is from oil and liquids,
measured on a 6:1 equivalent basis
-
Full-year 2011 production of 830 to 840 million cubic feet
equivalent per day (MMcfe/d), consistent with existing guidance. At
the midpoint, this represents an approximate 7 percent increase from
782 MMcfe/d in 2010. The increase is after asset sales that were
expected to contribute an additional 15 MMcfe/d to full-year 2011
volumes
-
Year-end 2011 exit rate of more than 900 MMcfe/d, which
includes 23,000 to 24,000 barrels per day of oil production
-
2011 capital expected to come in as planned at approximately $1.6
billion
Note: The production, reserves and resource estimates above include El
Paso's 48.8 percent interest in Four Star Oil & Gas Company (Four Star).
El Paso is disclosing these forecasts as it engages with potential
buyers for its exploration & production assets. On October 16, 2011,
Kinder Morgan, Inc. (NYSE: KMI) announced that it had entered into an
agreement to acquire El Paso, and that in connection with the purchase,
it planned to sell El Paso's exploration & production assets.
"Our E&P business is completing a terrific year, and our results reflect
the significant evolution of our asset base," said Brent Smolik,
president of El Paso Exploration & Production Company. "We now have more
than 20 years of future drilling inventory that is low-risk, oily and
offers significant production and reserve growth potential. Our business
has excellent momentum as we enter 2012."
El Paso Corporation provides natural gas and related energy products in
a safe, efficient, and dependable manner. The company owns North
America's largest interstate natural gas pipeline system, one of North
America's largest independent exploration & production companies and an
emerging midstream business. El Paso owns a 42 percent limited partner
interest, and the 2 percent general partner interest in El Paso Pipeline
Partners, L.P. On October 16, 2011, El Paso Corporation announced that
it has entered into a definitive agreement whereby Kinder Morgan, Inc.
will acquire all of the outstanding shares of El Paso Corporation. For
more information, visit www.elpaso.com.
IMPORTANT ADDITIONAL INFORMATION WILL BE FILED WITH THE SEC
Kinder Morgan, Inc. ("KMI") has filed with the SEC a Registration
Statement on Form S-4 in connection with the proposed transaction
including a preliminary Information Statement/Prospectus of KMI and a
preliminary Proxy Statement of El Paso Corporation ("EP"). The
Registration Statement has not yet become effective. Following the
Registration Statement having been declared effective by the SEC, KMI
and EP plan to file with the SEC and mail to their respective
stockholders a definitive Information Statement/Proxy
Statement/Prospectus in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT AND THE PRELIMINARY INFORMATION STATEMENT/PROXY
STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE
FILED BY KMI OR EP, INCLUDING THE DEFINITIVE INFORMATION STATEMENT/PROXY
STATEMENT/PROSPECTUS, BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT
INFORMATION. Investors and security holders are able to obtain free
copies of the Registration Statement and the preliminary Information
Statement/Proxy Statement/Prospectus and other documents filed with the
SEC by KMI and EP through the web site maintained by the SEC at www.sec.gov
or by phone, e-mail or written request by contacting the investor
relations department of KMI or EP at the following:
Kinder Morgan, Inc. Address:
500 Dallas Street, Suite 1000 Houston, Texas 77002
Attention: Investor Relations Phone: (713) 369-9490 E-mail: kmp_ir@kindermorgan.com
El Paso Corporation Address:
1001 Louisiana Street Houston, Texas 77002 Attention: Investor Relations
Phone: (713) 420-5855 E-mail: investorrelations@elpaso.com
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be any
sale of securities in any jurisdiction in which such offer, solicitation
or sale would be unlawful prior to the registration or qualification
under the securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as amended.
PARTICIPANTS IN THE SOLICITATION
KMI and EP, and their respective directors and executive officers, may
be deemed to be participants in the solicitation of proxies in respect
of the proposed transactions contemplated by the merger agreement.
Information regarding KMI's directors and executive officers is
contained in KMI's Form 10-K for the year ended December 31, 2010, which
has been filed with the SEC. Information regarding EP's directors and
executive officers is contained in EP's Form 10-K for the year ended
December 31, 2010 and its proxy statement dated March 29, 2011, which
are filed with the SEC. A more complete description will be available in
the Registration Statement and the Information Statement/Proxy
Statement/Prospectus.
SAFE HARBOR FOR FORWARD LOOKING STATEMENTS
Statements in this document regarding the proposed transaction between
KMI and EP, the expected timetable for completing the proposed
transaction, future financial and operating results, benefits and
synergies of the proposed transaction, future opportunities for the
combined company, the sale of EP's exploration and production assets,
the possible drop-down of assets and any other statements about KMI or
EP managements' future expectations, beliefs, goals, plans or prospects
constitute forward looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Any statements that are not
statements of historical fact (including statements containing the words
"believes," "plans," "anticipates," "expects," estimates and similar
expressions) should also be considered to be forward looking statements.
There are a number of important factors that could cause actual results
or events to differ materially from those indicated by such forward
looking statements, including: the ability to consummate the proposed
transaction; the ability to obtain the requisite regulatory, shareholder
approvals and the satisfaction of other conditions to consummation of
the transaction; the possibility that financing might not be available
on the terms committed; the ability to consummate contemplated asset
sales; the ability of KMI to successfully integrate EP's operations and
employees; the ability to realize anticipated synergies and cost
savings; the potential impact of announcement of the transaction or
consummation of the transaction on relationships, including with
employees, suppliers, customers and competitors; the ability to achieve
revenue growth; national, international, regional and local economic,
competitive and regulatory conditions and developments; technological
developments; capital and credit markets conditions; inflation rates;
interest rates; the political and economic stability of oil producing
nations; energy markets, including changes in the price of certain
commodities; weather conditions; environmental conditions; business and
regulatory or legal decisions; the pace of deregulation of retail
natural gas and electricity and certain agricultural products; the
timing and success of business development efforts; terrorism; and the
other factors described in KMI's and EP's Annual Reports on Form 10 K
for the year ended December 31, 2010 and their most recent quarterly
reports filed with the SEC. KMI and EP disclaim any intention or
obligation to update any forward looking statements as a result of
developments occurring after the date of this document.
Cautionary Note to U.S. Investors
In this press release, we have disclosed our proved reserves using the
SEC's definition of proved reserves under rules effective December 31,
2009. Proved reserves are estimated quantities of hydrocarbons that
geological and engineering data demonstrate with reasonable certainty to
be recoverable in the future from known reservoirs under the assumed
economic conditions. Although the SEC now allows companies to report
probable and possible reserves, we have elected not to report on such
basis in our filings with the SEC. In this press release, we have
provided estimates of our "risked" unproved resources, which are
different than probable and possible reserves as defined by the SEC.
Note that we are not permitted to include or refer to our unproved
resources on such a basis in any SEC filings, and these estimates of
risked unproved resources should not be construed as comparable to our
disclosures of our proved reserves. Risked unproved resources are
estimates of potential reserves that are made using accepted geological
and engineering analytical techniques. Investors are urged to closely
consider the disclosures and risk factors in our Forms 10-K and 10-Q,
available from our offices or from our website at http://www.elpaso.com,
including the inherent uncertainties in estimating quantities of proved
reserves.
Cautionary Statement
The information contained in this release is based on estimates. While
the company has made every reasonable effort to ensure that the
information and assumptions contained in this release are current,
reasonable, and complete, a variety of factors could cause actual
results to differ materially from the estimates contained in this
release, including, without limitation, the uncertainty of estimating
proved reserves and unproved resources, the future level of service and
capital costs, the availability and cost of financing to fund our future
exploration and production operations; the success of our drilling
programs with regard to proved undeveloped reserves and unproved
resources, the effects of any changes in accounting rules and guidance;
our ability to meet production estimates in our Exploration and
Production segment; changes in commodity prices and basis differentials
for oil and natural gas, general economic and weather conditions in
geographic regions or markets served by the company and its affiliates,
or where operations of the company and its affiliates are located,
including the risk of a global recession and negative impact on natural
gas demand; changes in government regulation, political and currency
risks associated with international operations of the company and its
affiliates; competition; and other factors described in the company's
(and its affiliates') Securities and Exchange Commission.