El Paso to take $1-bil charge for reserve revision

Houston (Platts)--17Feb2004



Houston-based El Paso Tuesday announced that it expects to take a
fourth-quarter pre-tax ceiling test charge of some $1-bil as a result of
downward revisions to its estimated reserve base. The company released the
results of a review conducted by reserves analyst company Ryder Scott, which
indicated downward revisions totaling more than 3.64 Tcf equivalent for the
corporation and two consolidated subsidiaries, leaving it with 2.635 Tcfe in
proved reserves as of Dec 31, 2003. The company posted a downward revision of
1.824 Tcfe for El Paso Corp; 865 Bcfe for El Paso Production Holding Co;
and 951 Bcfe for El Paso CGP, respectively.

The independent review, which covered roughly 90% of the company's reserve
base, closely matched internal company reserve estimates, El Paso said. "In
its audit letter, Ryder Scott cited a difference of less than 2% with the
company's internal reserve analysis, which it deemed as "insignificant." The
company also said it expects to incur additional ceiling test charges if gas
prices fall below $6/MMBtu Henry Hub natural gas price that was used for the
calculation. A change in this would affect the overall valuation of the
company.

This story was first published in Platts real-time news and market reporting
service Platts Natural Gas Alert (http://www.platts.com/Natural Gas/Real-Time
Information/Natural Gas Alert/).