El Paso Completes Acquisition of Velvet Exploration

El Paso Corporation has completed its acquisition of Velvet Exploration. Approximately 41.9 million common shares, which equates to 96.7 percent of Velvet shares currently outstanding, were tendered pursuant to El Paso's June 25, 2001 offer that expired on July 31, 2001. These shares have been taken up by El Paso and payment of C$8.15 for each common share is being made this week. El Paso is immediately acquiring the remaining shares of Velvet pursuant to the compulsory acquisition provisions of the Alberta Business Corporations Act.

The majority of Velvet's properties are located in the highly prospective Foothills and Deep Basin areas of western Alberta, an area in which El Paso is already actively exploring. "The completion of this acquisition positions El Paso for strong growth in Canadian natural gas production to serve markets throughout North America," said Rod Erskine, president of El Paso Production Company.