El Paso Corporation Announces 2009 Capital Plan
November 05 2008 - 5:00PM
Marketwired
El Paso Corporation (NYSE: EP) today announced a capital plan for
2009 that is designed to provide the company with adequate
liquidity to meet its debt maturities and other on-going
obligations while enabling El Paso to fulfill its pipeline growth
program and preserve its inventory of exploration and production
opportunities.
"El Paso is well-positioned to meet the current credit market
challenges while continuing to execute on the core elements of our
business plan," said Doug Foshee, president and chief executive
officer of El Paso Corporation. "We have strong cash flow from our
Pipeline Group that is essentially unaffected by changes in natural
gas prices. At our Exploration and Production business, we have
excellent 2009 hedge positions with a $9 per MMBtu floor price on
approximately 70 percent of our expected 2009 domestic natural gas
production and approximately 60 percent of expected 2009 domestic
oil production hedged at $110 per barrel. In addition, we have
substantial flexibility in our E&P program, which allows us to
reduce near-term capital spending and retain sufficient liquidity
while not impacting long-term growth potential."
As of September 30, 2008, El Paso's liquidity was $1.9 billion,
which was composed of $1.2 billion of cash and approximately $0.7
billion available from committed bank facilities.
Capital plan highlights include:
-- 2008 capital expenditures will be reduced to $3.5 billion from
$3.8 billion.
-- 2009 capital expenditures will be reduced to approximately $3
billion.
- The Pipeline Group has $1.7 billion of planned capital for 2009.
- E&P spending is expected to be $1.3 billion. The 2009 program
will focus on repeatable, low-risk, short cycle projects.
-- E&P production in 2009 is estimated to be approximately flat with
2008 volumes.
-- Based on our current and projected liquidity following our May 2009
maturities, our plan does not contemplate having to access the capital
markets until the second half of 2009. However, we will be
opportunistic in accessing the capital markets prior to that time.
-- The plan also includes the sale of $150 million of several non-core
assets by mid-2009 that are subject to either preliminary or binding
sales agreements, as well as obtaining potential partners on one or
more pipeline expansion projects
-- The company has numerous additional alternatives to address potential
liquidity challenges if access to the capital markets remain
restricted, any of the asset sales or partnering opportunities
outlined above are delayed or not completed or there is a further
decline in commodity prices, including:
- Additional cuts in discretionary capital spending
- Secured financings
- Additional non-core asset sales
- Partnering in growth projects
El Paso will discuss its spending plans during its November 6,
2008 third quarter earnings conference call.
El Paso Corporation provides natural gas and related energy
products in a safe, efficient, and dependable manner. El Paso owns
North America's largest interstate natural gas pipeline system and
one of North America's largest independent natural gas producers.
For more information, visit www.elpaso.com.
Cautionary Statement Regarding Forward-Looking Statements
This release includes certain forward-looking statements and
projections. 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, including, without
limitation, our ability to meet our 2009 debt maturities and the
goals of our 2009 capital program; volatility in, and access to,
the capital markets; our ability to meet production volume targets
in our Exploration and Production segment; our ability to comply
with the covenants in our various financing documents; our ability
to obtain necessary governmental approvals for proposed pipeline
and E&P projects and our ability to successfully construct and
operate such projects; the risks associated with recontracting of
transportation commitments by our pipelines; regulatory
uncertainties associated with pipeline rate cases; actions by the
credit rating agencies; the successful close of our financing
transactions; our ability to close asset sales, as well as
transactions with partners on one or more of our expansion projects
that are included in the plan on a timely basis; credit and
performance risk of our lenders, trading counterparties, customers,
vendors and suppliers; changes in commodity prices and basis
differentials for oil, natural gas, and power; our ability to
obtain targeted cost savings in our businesses; 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; the
uncertainties associated with governmental 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 filings. While the company makes these
statements and projections in good faith, neither the company nor
its management can guarantee that anticipated future results will
be achieved. Reference must be made to those filings for additional
important factors that may affect actual results. The company
assumes no obligation to publicly update or revise any
forward-looking statements made herein or any other forward-looking
statements made by the company, whether as a result of new
information, future events, or otherwise.
Certain of the production information in this press release
include the production attributable to El Paso's 49 percent
interest in Four Star Oil & Gas Company ("Four Star"). El
Paso's Supplemental Oil and Gas disclosures, which are included in
its Annual Report on Form 10-K, reflect its proportionate share of
the proved reserves of Four Star separate from its consolidated
proved reserves. In addition, the proved reserves attributable to
its proportionate share of Four Star represent estimates prepared
by El Paso and not those of Four Star.
Contacts Investor and Public Relations Bruce L. Connery Vice
President Office: (713) 420-5855 Media Relations Bill Baerg Manager
Office: (713) 420-2906
El Paso (NYSE:EP)
Historical Stock Chart
From Jun 2024 to Jul 2024
El Paso (NYSE:EP)
Historical Stock Chart
From Jul 2023 to Jul 2024