El Paso Sees Jump in Production of Oil, Natural Gas

By Tom Fowler, Houston Chronicle

Jan. 19–El Paso Corp. expects oil and gas production to rise in 2006 between 8 and 11 percent and reserves to grow by 5 to 10 percent during what the company said will be “a breakout year.”

CEO Doug Foshee told analysts in New York on Wednesday the three-year restructuring the company just finished focused on expanding the pipeline and production businesses while selling off the tradingand less profitable side-businesses.

The pipeline group is expecting 4 to 6 percent growth in earnings before interest, taxes, depreciation and amortization in 2006 and beyond, Foshee said.

The company’s projections of up to $1.05 in earnings per share is better than the 96 cents average estimate from analysts surveyed by Thomson Financial.

Its fourth-quarter earnings report is scheduled for March 2, with 11 analysts surveyed expecting a 21 cents per share profit for the quarter.

In a call with media after the analyst meeting, Foshee said El Paso’s planned pipeline project to move natural gas from the Rocky Mountains to the East and Southeast has received bids for more than 3 billion cubic feet per day in capacity. So far the bids are nonbinding. The company expects to hold a binding open season this year.

Plans by Kinder Morgan and Sempra Energy to build a pipeline out of the Rockies adds “a competitive dynamic” to El Paso’s project, Foshee said. “But we don’t view the two projects as mutually exclusive.”

Foshee also said the company is in negotiations with a supplier of liquefied natural gas for a regasification project in Mexico’s Sea of Cortez. The facility would feed markets in both Mexico and the Southwest U.S.

El Paso’s stock was off 3 cents a share to $13.26 in trading Wednesday.

—–

To see more of the Houston Chronicle, or to subscribe to the newspaper, go to http://www.HoustonChronicle.com

Copyright (c) 2006, Houston Chronicle

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

EP,