"The sale of ANR Pipeline, our Michigan storage assets and our interest in Great Lakes is a transformational event for El Paso," said Doug Foshee, president and chief executive officer of El Paso. "Coupled with the restructuring efforts over the last three years, this transaction immediately elevates our credit statistics to a level that is at or very near an investment grade level, one of our primary long-term objectives. We also preserve our earnings outlook and our position as North America's largest interstate natural gas pipeline franchise with approximately 43,000 miles of pipelines." In addition, the transaction will result in the following:
* A neutral to slightly positive impact on earnings per share
Over the past three years, El Paso has successfully sold non-core assets and narrowed its focus to its two core businesses -- interstate natural gas pipelines and exploration & production. The opportunities for natural gas infrastructure development remain excellent. The pipeline group has more than $2 billion of committed projects in various stages of development and is pursuing others. El Paso's pipelines will become more competitive as this transaction will reduce their cost of capital. The E&P business will continue with a balanced drilling program in its Onshore, Texas Gulf Coast, Gulf of Mexico and International regions. Both core businesses will benefit from El Paso's improved financial flexibility as the company will be much better equipped to respond to new opportunities. El Paso will provide more details on its 2007 plan at its annual analyst meeting on February 21, 2007.
Goldman Sachs & Co. acted as the financial advisor to El Paso on this transaction. Andrews Kurth LLP acted as legal counsel.
El Paso Corporation provides natural gas and related energy products in a safe, efficient, dependable manner. The company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers.
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