SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: June 11, 1999
(Date of Earliest Event Reported: June 10, 1999)
EL PASO ENERGY CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 1-14365 76-0568816
(State or other (Commission File (I.R.S. Employer
jurisdiction Number) Identification
of incorporation) Number)
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
(713) 420-2131
(Registrant's telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
On June 10, 1999, El Paso Energy Corporation ("EPEC") issued
the press release filed herewith as Exhibit 99.1 announcing the
approval by stockholders of the proposed merger between EPEC and
Sonat Inc.
Item 7. Financial Statements and Exhibits.
(a) No financial statements are filed with this report.
(b) Exhibits.
99.1 Press release issued by EPEC on June 10, 1999.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
By: /s/ Jeffrey I. Beason
-----------------------
Jeffrey I. Beason
Vice President and Controller
(Chief Accounting Officer)
Dated: June 11, 1999
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description
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99.1 Press Release issued by EPEC on June 10, 1999.
EXHIBIT 99.1
[Letterhead of El Paso Energy Corporation]
EL PASO ENERGY CORPORATION STOCKHOLDERS
OVERWHELMINGLY APPROVE MERGER WITH SONAT INC.
HOUSTON, TEXAS, June 10, 1999-El Paso Energy Corporation (NYSE:EPG)
announced today that the company's stockholders have overwhelmingly
approved the proposed El Paso Energy merger with Sonat Inc.
(NYSE:SNT). In a special stockholders' meeting held today, El Paso
Energy stockholders authorized the company to issue up to 750
million shares of common stock and 50 million shares of preferred
stock. El Paso will issue approximately 110 million common shares
to complete the $6 billion pooling of interests transaction with
Sonat. Each Sonat common share will be converted into one share of
El Paso Energy common stock when the merger is completed later this
year. In a separate meeting held today, Sonat Inc. stockholders
also approved the merger.
"Today's votes bring us another step closer to completing the
merger with Sonat," said William A. Wise, chairman, president and
chief executive officer of El Paso Energy. "We are pleased to see
such a strong show of support from our stockholders. This vote of
confidence underscores our stockholders' recognition of the
benefits of this combination and belief in our demonstrated
capability to combine similar businesses."
The approval of the Sonat merger by the El Paso stockholders
will result in a defined change in control of El Paso pursuant to
certain El Paso employee benefit plans. Consequently, in the second
quarter of 1999, El Paso will record a charge currently estimated
at $120 million pretax, or approximately $80 million after tax or
$0.63 per share, for the accelerated amortization and vesting of
benefits under these El Paso plans.
There will be additional costs to be expensed in association
with the merger in future quarters, including Sonat-related change
in control costs and various legal, accounting, and financial
advisory transaction costs. The exact timing and amount of these
future charges will largely depend on when the merger closes, which
is still anticipated to occur either late in the third quarter or
early in the fourth quarter of 1999, concurrent with the completion
of regulatory reviews.
"This merger is consistent with our ongoing strategy of
maintaining growth through significant acquisitions and mergers,"
added Wise. "Since our initial public offering in 1992, we have
aggressively grown El Paso Energy through a series of successful
transactions that have increased the value of our assets from $1
billion to over $10 billion. The Sonat merger will add another $4
billion in assets, for a total enterprise value of $14 billion. We
will continue to execute this growth strategy in the future,
positioning the company to capitalize on new opportunities in the
rapidly converging energy marketplace."
The merger with Sonat complements El Paso Energy's existing
assets and services, and it creates opportunities for nearly all of
El Paso's businesses. As a result of the merger, the company's
40,000 mile interstate natural gas pipeline system will be the
largest in the United States both in pipeline mileage and
throughput, moving nearly 25 percent of all the natural gas
transported in the country every day. The pipelines will access
all major natural gas supply basins and serve dynamic market areas
from coast to coast, including high growth markets in Florida, the
southeast, and the northeast.
A number of independent gas-fired power generation developments
are underway along the eastern corridor, and the El Paso and Sonat
pipelines are strategically positioned to serve these markets. The
need for new electric generation facilities continues to grow
throughout the country, providing the combined company with
enhanced opportunities to leverage its energy marketing and
power generation expertise as well. Both companies have
strong, asset-based marketing organizations that provide utilities
with fuel management and risk management services. In addition
both companies are developing power plants to meet the ever-
increasing demand for efficient, cost-effective electric
generation.
The transaction will also provide new opportunities for El Paso
Field Services Company, which has extensive gathering and
processing facilities as well as the ability to connect to the best
interstate pipeline network in the United States. Sonat
Exploration has a substantial oil and gas exploration and
production base that spans the southern United States from Texas to
Alabama. El Paso Field Services' premier asset portfolio and
market connections will provide Sonat Exploration's natural gas
reserve base with access to burgeoning power markets.
Additionally, through El Paso's ownership in Leviathan, the company
will have the opportunity to offer offshore gathering and platform
services to complement Sonat's exploration and production
developments. At year-end, Sonat held 1.6 trillion cubic feet of
natural gas equivalent reserves. Following the merger, the company
will continue to develop and maintain these reserves, leveraging
the strategic value of these holdings to the benefit of other
business units.
With over $10 billion in assets, El Paso Energy Corporation
provides energy solutions through five business units: Tennessee
Gas Pipeline Company, El Paso Natural Gas Company, El Paso Field
Services Company, El Paso Energy Marketing Company, and El Paso
Energy International Company. The company owns the nation's only
integrated coast-to-coast natural gas pipeline system and has
operations in natural gas transmission, gas gathering and
processing, energy marketing, power generation and international
energy infrastructure development. Visit El Paso Energy's web site
at www.epenergy.com.
- -more-
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 release. While the company makes these statements and
projections in good faith, neither the company nor its management
can guarantee that the anticipated future results will be achieved.
Reference should be made to the company's (and its affiliates')
Securities and Exchange Commission filings for additional important
factors that may affect actual results.
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Contacts:
Media Relations: Paula Delaney (713) 420-6885
Mel Scott (713) 420-3039
Investor Relations: Bridget McEvoy (713) 420-5597
