El Paso’s Long-range Plan for 2005-2006

El Paso Corporation has made significant progress against the goals outlined in the original long-range plan it announced in late 2003. In March 2005, El Paso’s management team provided goals for 2006. El Paso will update its progress against these goals on a quarterly basis, so you can track the company’s development.

El Paso’s Goals for 2006

• Be a strong North American natural gas company in both our core businesses: pipelines and exploration and production.
• Generate core net income of $425 million to $750 million, or earnings per share between $0.58 and $1.03.
• Generate earnings before interest, taxes, depreciation, and amortization (EBITDA) of $3 billion to $3.5 billion.
• Sell an incremental $1.2 billion to $1.6 billion of non-core assets, mostly in 2005.
• Decrease debt, net of cash, to $15 billion by year-end 2005.
• Budget for annual growth and maintenance capital spending of $1.6 billion to $1.7 billion.

Regulated Business
El Paso’s Pipeline Group is the premier North American natural gas pipeline franchise, transporting about one-third of the total natural gas consumed in the United States. The group’s extensive pipeline network and presence in the most prolific producing basins position El Paso’s pipelines to meet North America’s growing natural gas infrastructure needs in a safe and efficient manner. Industry fundamentals for the pipelines remain strong with new growth projects driven both by the push to deliver natural gas supplies from rapidly developing production areas such as the Rockies and strong demand in growing market areas, primarily driven by increased use of natural gas-fired electricity generation. Another area of growth potential is the liquefied natural gas (LNG) arena. LNG imports are expected to increase from about 1 billion cubic feet per day (Bcf/d) to about 15 Bcf/d by 2015. The scope of the Pipeline Group’s operations make it ideally suited to benefit from this growth. El Paso’s Elba Island LNG regasification terminal, located off the coast of Georgia, is one of only four active facilities in the nation, and the Pipeline Group is expanding Elba’s capacity to handle additional LNG imports. The company has more takeaway capacity than any other natural gas pipeline in the Gulf of Mexico, where numerous LNG-related projects are planned.

The group’s strategic business plan emphasizes continued stability in our core pipeline franchise as well as growth through strategic expansions. Throughout 2005 and 2006, the group will work to:

• Continue its success in recontracting capacity, shifting short-term positions to longer terms.
• Work toward successful completion of rate cases. The group expects to complete four major rate cases through the end of 2006. Two of the four are already in advanced negotiations with customers.
• Focus on cost control and continue to manage capital expenditures for the most efficient use of the group’s $850-million-per-year budget.
• Attach to new supply sources across its operations.
• Seek opportunities to strengthen its position in major market areas.

Production and Non-regulated Businesses
El Paso’s Non-regulated operations gathered momentum in the second half of 2004 and will build on that momentum as the group works to continue to strengthen its exploration and production operations, exit international power operations except Brazil, and further reduce the size of the legacy trade book. Throughout 2005 and 2006, the group will work to:

• Build on theexploration & production company’s progress from 2004. This business showed marked improvement in three of its four producing regions in the second half of 2004 by delivering solid returns on invested capital, reducing the risk profile of its drilling programs, and lengthening the life of its reserves.
• Produce at least 800 million cubic feet equivalent per day (MMcfe/d) in 2005 and at least 825 MMcfe/d in 2006.
• Continue to focus on cost controls to achieve production costs between $0.69 and $0.78 per thousand cubic feet equivalent (Mcfe) in 2005 and $0.60 to $0.70/Mcfe in 2006.
• Manage equity natural gas and oil in the Marketing and Trading group to generate the highest price for the Exploration & Production company, rolling legacy trade positions off of its books, and looking for opportunities to reduce legacy transportation and other long-term transactions.
• Continue simplifying non-regulated operations by divesting non-core assets, including its Asian and Central American power portfolios, certain midstream facilities, and other miscellaneous holdings.

El Paso Corporation’s updated long-range plan provides a clear direction for the company as it moves forward and achievable goals for 2005 and 2006 for its two core businesses. As active stewards of its shareholders’ investments, El Paso employees are working together to continue the company’s turnaround and restore the company to its place as an industry leader.