Lisa StewartPresident, El Paso Production andNon-Regulated Operations

Gulf of Mexico UpdateMay 10, 2005

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Cautionary Statement Regarding Forward-looking Statements

This release includes forward-looking statements and projections, made in reliance on the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The company has made every reasonable effort to ensure that the information and assumptions on which these statements and projections are based are current, reasonable, and complete. However, a variety of factors could cause actual results to differ materially from the projections, anticipated results or other expectations expressed in this presentation, including, without limitation, our ability to implement and achieve our objectives in the long-range plan, including achieving our debt-reduction targets; uncertainties associated with production activities; our ability to meet production volume targets in our Production segment; the uncertainties associated with governmental regulation and other factors described in the company's (and its affiliates') Securities and Exchange Commission filings. While the company makes these statements and projections in good faith, neither the company nor its management can guarantee that anticipated future results will be achieved. Reference must be made to those filings for additional important factors that may affect actual results. The company assumes no obligation to publicly update or revise any forward-looking statements made herein or any other forward-looking statements made by the company, whether as a result of new information, future events, or otherwise

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Overview

► Substantial progress in past 12 months

► 100% success rate since mid-2004

► Production stabilized with shift to lower-risk program

► Large acreage position provides opportunities forlow-risk to ultra-deep prospects

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Acreage Position:Gulf of Mexico (GOM)

El Paso HBP BlocksEl Paso Lease BlocksEl Paso High Bid Lease Sale Blocks

GOM Position

Total El PasoHBP El Paso OpHBP Other Op

Leases234

7866

Blocks222

7666

El Paso Operated Structures: 101

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GOM Shelf Industry Comparison*154

115103 99 92 89 88 84 81 78

69 67 62 62 6253 49 46 43

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*Designated as operator of shelf offshore block

Operated Blocks

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3D Seismic: GOM

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GOM Drilling Inventory

► Currently 52 ready to drill prospects– Depths range from 6,000'–23,000' TVD

► 22 prospects: 0'–12,000'► 19 prospects: 12,000'–18,000'► 11 prospects: 18,000'–23,000'

– Net risked mean reserve exposure: 452.2 Bcfe

► Fully evaluated from a technical, risk, andeconomic prospective

► Key to successful portfolio management is the CMS planning and tracking system

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Capital Management System (CMS)

Managing Our Drilling Program

► Value creation through the drill bit

► Strive for balanced program

► Disciplined pre-drill evaluation (risk, reserves, cost)

► Monthly post-drill analysis (actual results)

► Continuously comparing post-drill evaluation topre-drill assumptions

► Adjust program based on monthly results

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GOM/Southern Louisiana2004 Drilling Schedule

► 1st half: 7 dry wildcats in deep shelf with an average TD 19,712'; 2 discoveries

– $60.5 MM dry hole costs

► Mid-year refocus in program– Exploration & Production

departments merged– ROSE risking and

evaluation stressed– Emphasis on moderate risk

profile

► 2nd half: 7 successful wells with average TD 11,185'

– Results from wells booked in 2nd half, 1.0 PVR; with all costs

► $50.7 MM drilling cost for9 total successful wells

TotalDry Hole

Cost$60.5 MM

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GOM 2005/2006 Drilling ScheduleMD

► Three wells drilled and completed► Five wells currently drilling► Five wells yet to spud► Moderate risk portfolio► Average TVD 13,592'

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2005: Balanced Drilling Program

0–12,000' 12–16,000' 16,000'+

Total: $54 MM

4 Wells► HI48 Cris R► WC95 2 Marg A► WC62 Marg A► VK385 A-4

6 Wells► WC504 B-3 ST (Drilled)► WC504 B-9 (Drilling)► WC95 1 Cris A► GA151 B-2 (OBOC)► MC151 (OBOC)► VK823 (OBOC)

3 Wells► WC75 Discovery► WC62 ► HI 115 ST

Development$15,502

28% $21,74740%

$17,27932%

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El Paso Shelf Technology

► 3D seismic– Extensive database (60,000 mi2)– In-house data processing—Prestack time and depth migration– Multi-attribute analyses including: Inversion, coherency, and fluid factor

analysis– Pore pressure modeling and prediction

► Drilling– Bi-center bits– Expandable casing/liners– Drilling with casing

► Completions– 4 ½" monobore for deep shelf wells– Reduced time through single/half trip completions– Rigless thru-tubing frac packs for recompletions

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“Deep Shelf”Upper/Middle Miocene Activity

► EP ST204 initiated the play► Upper–middle Miocene at 18,000'–21,000'► Large 4-way closures► AVO has been successfully applied in the play as a DHI► High-rate reservoirs with significant liquids

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Industry “Deep Shelf”Sub Glide Plane Activity (Eocene Play)

► Deep frontier exploration below the regional glide plane► Large 4-way closures with Eocene, Paleocene and Cretaceous objectives► Drill depths between 22,000'–38,000'► Leverages existing infrastructure and MMS royalty relief

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El Paso “Deep Shelf”Sub Glide Plane Potential (Eocene Play)

Eocene► Key well WC 53 “Black Diamond” Prospect► Shell HI10 “Joseph Prospect” PTD 30,000‘

(currently drilling)► Extension of onshore Wilcox play onto the Shelf► Delta fed slope apron depositional setting► EP has current prospect inventory

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El Paso WC 53 Eocene Prospect

► Drilled just short of targets in 2003

► Gas shows in Yegua (Eocene) Section

► Target is Wilcox sands

► Large 4-way closure

► Channel and fan morphology

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GOM/SLA Production Profile

0

50

100

150

200

250

300

Jul2004

Oct2004

Jan2005

Apr2005

Jul2005

Oct2005

Jan2006

Apr2006

Jul2006

Oct2006

Volumes stable at 200 MMcfe/d on $150 MM capital per year

Base04 CAP05 DRLG05 REC06 CAP

Hurricane Ivan

Net MMcfe/d

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Production EnhancementsAdd Stability

125

175

225

275

325

375

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

NE

T M

Mcf

e/d

2004 GOM BASE VOLUMES WORKOVER VOLUMES RECOM VOLUMES DRILLING VOLUMES

WORKOVERS:30 MMcfe/d

2004/2005 increase

RECOMPLETIONS:38 MMcfe/d

2004/2005 increase

DRILLING:16 MMcfe/d

2004/2005 increase

HurricaneIvan

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El Paso Future Focus

► Emphasize medium risk prospect portfolio

► Further development of producing assets

► Deeper wildcat opportunities based on 3D seismic technology and regional studies

► Leverage higher risk opportunities through strategic alliances

► Acquisitions that enhance overall prospect portfolio and production

Lisa StewartPresident, El Paso Production andNon-Regulated Operations

Gulf of Mexico UpdateMay 10, 2005