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-- The company has identified specific actions that will generate $150
million of annual operating and administrative cash savings. These
actions include, among others, reducing internal costs and improving
cost efficiencies from leveraging a consolidated supply chain
organization. El Paso will realize a portion of the projected savings
in 2009.
-- El Paso intends to sell an additional $300 million to $500 million
of assets during 2010.
-- The company's Board of Directors has approved a reduction in the
company's quarterly dividend from $.05 to $.01 per share. The dividend
reduction will result in approximately $112 million of annual cash
savings.
These measures are expected to generate the following benefits:
-- Provide incremental funding for:
-- The Company's industry-leading pipeline backlog of growth
opportunities.
-- The Company's growing, low-cost, high return, repeatable
unconventional natural gas drilling inventory.
-- Improve El Paso's overall cost structure.
-- Protect El Paso's credit profile.
-- Enhance overall shareholder returns
"Since last summer, we've acted aggressively to deal with the challenges in capital and commodity markets, building liquidity significantly," said Doug Foshee, chairman, president, and chief executive officer of El Paso Corporation. "At the same time, we've continued to fund sustainable growth opportunities in both core businesses. Our actions to make significant reductions in our ongoing cost structure, streamline our organization and reduce the dividend are designed to improve the long term returns to our shareholders."
El Paso will provide detailed earnings and operational guidance for 2010 during its December 10, 2009 analyst meeting.
The $0.01 per share dividend will be payable January 4, 2010 to shareholders of record as of the close of business on December 4, 2009. Outstanding shares of common stock entitled to receive dividends as of September 30, 2009 were 701,264,788.
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 achieve the targeted costs savings from the announced reorganization; complete planned asset sales; change management risk associated with the reorganization; our ability to pay the dividends declared; changes in unaudited and/or unreviewed financial information; volatility in, and access to, the capital markets; our ability to implement and achieve our objectives in our 2009 plan and updated guidance, including achieving our earnings and cash flow targets; the effects of any changes in accounting rules and guidance; our ability to meet production volume targets in our Exploration and Production segment; our ability to successfully identify and finance new Midstream opportunities; 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; 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; 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.
Contacts Investor and Public Relations Bruce Connery Vice President Office: (713) 420-5855 Media Relations Richard Wheatley Manager Office: (713) 420-6828
SOURCE: El Paso Corporation
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