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The moves are designed to help the company improve its credit profile, raise funds to expand its natural gas pipeline business and take advantage of unconventional natural gas drilling opportunities, including prospects in the Haynesville and Eagle Ford shale formations, El Paso said in a statement.
The $150 million in cuts will include some job eliminations, but most savings will not come from reducing head count, El Paso spokesman Bruce Connery said. He could not provide specific numbers.
The company also would not say which assets may be on the block next year.
El Paso Chairman and CEO Doug Foshee said in a statement that the company has been moving aggressively since the summer to improve liquidity.
"At the same time, we've continued to fund sustainable growth opportunities in both core businesses," he said, referring to the natural gas pipeline business and exploration and production unit. "Our actions to make significant reductions in our on- going cost structure, streamline our organization and reduce the dividend are designed to improve the long-term returns to our shareholders."
The dividend cut is expected to conserve about $112 million in cash per year.
El Paso also reported earnings Tuesday, with net income of $67 million, 8 cents per share, down sharply from $445 million, 58 cents per share, in the same quarter last year. Analysts had expected El Paso to report earnings of 21.8 cents per share, according to Bloomberg.
El Paso's E&P business was particularly hard hit by lower natural gas prices, with earnings before income and taxes down 84 percent. Earnings in the pipeline group rose 17 percent, however, as new transportation and storage projects came online.
El Paso also announced that its first Eagle Ford shale well in La Salle County recently was drilled with current flow rate about 6.1 million cubic feet per day. El Paso has almost doubled its lease position in the Eagle Ford in the last three months from 60,000 acres to 112,000 acres.
Tuesday's announcements came after the market closed, with El Paso shares up 12 cents to $9.80.
tom.fowler@chron.com
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