SOURCE: El Paso Corporation

El Paso Corporation

February 02, 2010 08:30 ET

El Paso Corporation Reports 44 Percent Increase in Risked Unproved Resources

HOUSTON, TX--(Marketwire - February 2, 2010) - El Paso Corporation (NYSE: EP) reported today that as of December 31, 2009, it had 5.1 trillion cubic feet equivalent (Tcfe) of estimated total risked unproved resources , or 8.9 Tcfe unrisked, in addition to its 2.75 Tcfe of proved natural gas and oil reserves. The company's risked total unproved resources rose approximately 1.6 Tcfe, or 44 percent, from year-end 2008 levels. The majority of the increase was due to the addition of extensive drilling opportunities in the Haynesville Shale and Eagle Ford Shale programs. Unproved resources and proved reserves include the company's proportionate share of Four Star Oil & Gas Company and represent the company's net interest.

The corporation's future drilling inventory, which includes proved undeveloped reserves, is approximately 6.0 Tcfe of risked resource potential, or almost 6,000 drilling locations. At current activity levels, this represents more than 10 years of drilling inventory.

"One of our key goals for 2009 was to expand our unproved resource base, which, in turn, provides opportunities for future proved reserves and production growth. Not only were we successful, but we added significant new resources in some of the most economically advantaged natural gas plays in North America," said Brent Smolik, president of El Paso Exploration & Production Company.

A breakout of net unproved resources (risked/unrisked) is as follows:

Unconventional - 2,475/3,620 Bcfe -- Unconventional resources primarily consist of the company's Haynesville and Eagle Ford shale plays and coal bed methane operations in the Raton, Black Warrior and Arkoma Basins.

Conventional, low-risk - 2,045/2,645 Bcfe -- This consists of conventional resources in the Altamont Field, other Rockies programs, south Texas, and Brazil development programs. It also includes tight-sand drilling in the ArkLaTex area.

Conventional, higher-risk - 600/2,635 Bcfe -- This includes higher-risk exploration in the Gulf of Mexico, Texas Gulf Coast, and undrilled international exploration prospects in Brazil and Egypt.

El Paso has updated program inventory charts that were included in its December 10, 2009 Investor & Analyst Meeting. Those charts can be obtained by clicking the link provided below.

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 and one of North America's largest independent natural gas producers. For more information, visit

Cautionary Note to U.S. Investors

In this press release, we have disclosed our proved reserves using the Securities and Exchange Commission's (SEC's) definition of proved reserves under rules effective December 31, 2009. Proved reserves, including proved undeveloped reserves are estimated quantities that geological and engineering data demonstrate with reasonable certainty to be recoverable in the future from known reservoirs under assumed economic conditions. Although the SEC now allows companies to report unproved reserves in the form of probable and possible reserves in their SEC filings, we have elected not to report on such basis. In this press release, we have provided estimates of our "risked" and "unrisked" 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 and unrisked unproved resources should not be construed as comparable to our disclosures of our proved reserves. Risked and unrisked unproved resources are estimates of potential reserves that are made using accepted geological and engineering analytical techniques. Unrisked resources are less certain than risked resources as they do not contemplate the likelihood of a successful outcome. 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, 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 and unproved reserves, the future level of service costs, the availability and cost of financing to fund our future exploration and production operations; 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; 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') SEC filings. While the company makes these estimates in good faith, neither the company nor its management can guarantee that such estimates will be achieved. Reference must be made to El Paso's filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any of the estimates made herein whether as a result of new information, future events, or otherwise.

The proved reserves and unproved resources information in this press release includes the proved reserves and unproved resources attributable to El Paso's 49 percent interest in Four Star . The proved reserves and unproved resources attributable to its proportionate share of Four Star represent estimates prepared by El Paso and not those of Four Star.

Contact Information

  • Contacts:

    Investor & Media Relations
    Bruce Connery
    Vice President
    Office:(713) 420-5855

    Bill Baerg
    Office:(713) 420-2906