El Paso Earmarks $1.1B for 2010 E&P Budget
El Paso has announced its financial and operational outlook for 2010.
- $0.75 - $0.95 adjusted earnings per diluted share (EPS)
- $2.9 billion - $3.1 billion adjusted earnings before interest, taxes and depreciation, depletion and amortization (EBITDA)
- $2.0 billion - $2.2 billion adjusted earnings before interest and taxes (EBIT)
- $1.6 billion to $1.8 billion cash flow from operations
- $4.1 billion capital program
- $2.9 billion - Pipeline Group (includes 100 percent of the Ruby Pipeline Project)
- $1.1 billion - Exploration and Production (E&P)
- $0.1 billion - Corporate
Note: Adjusted EPS, EBIT and EBITDA exclude mark-to-market impacts from derivatives and include cash proceeds on settlements of E&P hedges based on guidance assumption prices.
2010 Guidance Assumptions
The 2010 financial highlights above assume commodity prices of $5.50 per MMBtu for natural gas (NYMEX) and $60.00 per barrel for oil (WTI).
"El Paso is finishing one of its best years ever operationally," said Doug Foshee, chairman, president and chief executive officer of El Paso Corporation. "Our pipelines continue to execute extremely well on the construction of our committed backlog, while developing new opportunities for future growth, such as the Marcellus Shale. Our E&P business has had an excellent year, as domestic operations have exceeded expectations with the advancement of our Haynesville, Eagle Ford and Altamont programs. We enter 2010 with excellent momentum, and during our investor and analyst meeting today, we will touch on the robust outlook we have for the next several years."
Business Plan Highlights
El Paso's Pipeline Group is targeting 2010 adjusted EBITDA of approximately $2.0 billion to $2.1 billion, with a $2.9 billion capital budget. Approximately $0.5 billion of the budget is maintenance capital and $2.4 billion is allocated to growth projects, including $1.7 billion for 100 percent of Ruby. The Pipeline Group has an industry-leading backlog of committed pipeline and LNG projects, most of which will be placed into service by the end of 2011. A significant amount of the construction and materials price risk of these projects has been mitigated. El Paso expects to deliver its construction backlog on time and on budget.
Exploration and Production
El Paso Exploration & Production expects to spend approximately $1.1 billion in 2010, with $0.9 billion allocated to domestic programs. Roughly half of domestic capital will be allocated to the Haynesville Shale, Eagle Ford Shale and Altamont oil programs. During today's investor and analyst meeting, the company will show that its risked unproved resources have grown sharply, and now total almost 5 trillion cubic feet equivalent.
The company expects to produce between 720 and 760 million cubic feet equivalent per day (MMcfe/d) in 2010, including its proportionate interest in Four Star Oil & Gas Company. Per-unit cash costs and DD&A rates are expected to be $1.90 - $2.20 per Mcfe and $1.65 - $1.85 per Mcfe, respectively.
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