United States
Securities and Exchange Commission
Washington, D.C. 20549
____________________
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report - January 20, 2000
(Date of earliest event reported: January 19, 2000)
EL PASO ENERGY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 001-14365 76-0568816
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification Number)
El Paso Energy Building, 1001 Louisiana Street, Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 420-2131
<PAGE>
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. Description
99.1 Analysts' Presentation relating to the proposed merger
of El Paso Merger Company, a wholly-owned subsidiary of
El Paso Energy Corporation, with and into The Coastal
Corporation.
<PAGE>
SIGNATURE
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.
Date: January 20, 2000 El Paso Energy Corporation
By: /s/ Jeffrey I. Beason
-----------------------
Name: Jeffrey I. Beason
Title: Senior Vice President
and Controller
<PAGE>
Exhibit Index
Exhibit No. Description
99.1 Analysts' Presentation relating to the proposed merger
of El Paso Merger Company, a wholly-owned subsidiary of
El Paso Energy Corporation, with and into The Coastal
Corporation
EXHIBIT 99.1
[Logo] El Paso Energy [Logo] The Coastal Corporation
EL PASO ENERGY CORPORATION/
COASTAL CORPORATION MERGER
---------------------------------
January 2000
<PAGE>
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
This presentation includes forward-looking
statements and projections, made in reliance
on the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. The
companies have 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, oil and gas prices; general
economic and weather conditions in geographic
regions or markets served by El Paso Energy and
Coastal and their affiliates, or where
operations of the companies and their
affiliates are located; inability to realize
anticipated synergies and cost savings on a
timely basis; difficulty in integration of
operations; and competition. While the
companies make these statements and
projections in good faith, neither company
nor their managements can guarantee that the
anticipated future results will be achieved.
Reference should be made to the companies'
(and their affiliates') Securities and
Exchange Commission filings for additional
important factors that may affect actual
results.
<PAGE>
INVESTOR NOTICE
Investors are urged to read the proxy
statement/prospectus which will be included
in the Registration Statement on Form S-4 to
be filed with the SEC in connection with the
proposed merger because it will contain
important information. After it is filed
with the SEC, the proxy statement/prospectus
will be available for free on the SEC's web
site (www.sec.gov) and from El Paso Energy
Corporation's office of Investor Relations
and Coastal's office of the Corporate Secretary.
In addition, the identity of the people
who, under SEC rules, may be considered
"participants in the solicitation" of El Paso
Energy shareholders in connection with the
proposed merger, and a description of their
interests, is available in an SEC filing
under Schedule 14A made by El Paso Energy
Corporation on January 18, 2000.
<PAGE>
AGENDA
* Transaction Overview
* Strategic Benefits
* Combined Operations Review
* Financal Review
* Summary
<PAGE>
[Logo] El Paso Energy [Logo] The Coastal Corporation
TRANSACTION OVERVIEW
------------------------------------
<PAGE>
TRANSACTION SUMMARY
* Stock-for-stock exchange
* 1.23 El Paso common shares for each Coastal share
* Pooling of interests accounting
* 12 member combined Board of Directors,
7 from El Paso and 5 from Coastal
* $16 billion transaction value
* $10 billion equity issued
* $6 billion debt and preferred equity assumed
<PAGE>
COMBINED NORTH AMERICAN GAS AND POWER OPERATIONS
[Graphic Map of United States]
- --------------------------------------------
El Paso
- --------------------------------------------
- - Gas Transmission O Production
* Gathering/Processing o Power Plants
- --------------------------------------------
<PAGE>
COMBINED NORTH AMERICAN GAS AND POWER OPERATIONS
[Graphic Map of United States]
- --------------------------------------------
El Paso
- --------------------------------------------
- - Gas Transmission O Production
* Gathering/Processing o Power Plants
- --------------------------------------------
- --------------------------------------------
Coastal
- --------------------------------------------
- - Gas Transmission O Production
* Gathering/Processing o Power Plants
- --------------------------------------------
<PAGE>
RELATIVE SIZE OF COMBINED COMPANY
$ Millions
Equity
1999E Net 1999E Market Enterprise
Income EBITDA Value Value
---------------------------------------------
Gas companies:
El Paso/Coastal $ 920 $ 3,200 $ 18,525 $ 32,325
Coastal 500 1,500 7,700 13,470
El Paso 420 1,700 8,520 16,550
Enron 902 2,965 40,343 49,422
Williams Cos. 179 1,717 15,189 23,623
Utilities:
Duke Energy 1,297 3,982 19,907 30,849
PG&E 723 3,936 8,376 19,588
Southern Co. 1,337 5,110 16,238 34,277
Source: DLJ Research, enterprise value (other than EPG and CGP) based on 3Q99.
<PAGE>
[Logo] El Paso Energy [Logo] The Coastal Corporation
STRATEGIC BENEFITS
_______________________________________
<PAGE>
STRATEGIC BENEFITS
* Creates North American gas and power industry leader
* Well-positioned convergence player
* Integrated from wellhead to electron
* Scale and market reach to lead industry
* Immediately accretive to EPS in 2001 and 2002; balance sheet and credit
enhancing
<PAGE>
STRATEGIC BENEFITS
* Enchances P/E multiple
* Scale to build break out businesses
* Demand for world scale, large cap companies - the "must own" energy company
* Cost of capital advantage
<PAGE>
COMBINED COMPETITIVE POSITION
Pro Forma 2000
Domestic Natural Gas Value Chain
----------
Production BP/Amoco |
Exxon/Mobil |
#3 El Paso Burlington |
|
|
Processing Duke |
#2 El Paso THE ONLY
Williams TOP TIER
PLAYER IN
Transmission #1 El Paso Enron EVERY SEGMENT
Williams Columbia |
Duke CMS |
|
Wholesale Enron |
Marketing #2 El Paso Duke |
Southern Dynegy |
|
|
Merchant Power Southern AES |
Edison El Paso #5 |
Duke PG&E |
|
|
|
___________
<PAGE>
RELATIVE VALUATION DATA
$ Millions
Equity Projected
Market 5-year EPS Dividend 2000 P/E
Value Growth Rate Yield Multiple
- -------------------------------------------------------------------------
El Paso/Coastal Pro Forma $ 18,525 Over 15% 2.2% 15.1x
Super Majors
Exxon Mobil $289,042 10% 2.1% 25.7x
Royal Dutch Shell 218,609 8 2.5 24.9
BP Amoco 183,668 5 2.5 23.6
Majors
Chevron $ 56,931 11% 2.9% 19.5x
Texaco 31,836 7 3.1 17.4
Conoco 15,750 9 3.0 16.1
Power and Gas
Enron $ 40,343 15% 1.3% 38.1x
Duke Energy 19,907 8 4.1 13.4
AES 15,995 20 0.0 24.6
<PAGE>
[Logo] El Paso Energy [Logo] The Coastal Corporation
COMBINED OPERATIONS REVIEW
----------------------------------------------
<PAGE>
HIGHER GROWTH PROSPECTS FOR EVERY BUSINESS SEGMENT
* Scale
* Skills
* Geographic reach
* Opportunity set
<PAGE>
2000E EBIT CONTRIBUTION
$ Millions
El Paso
Stand-alone
-----------
[Pie graph]
58% Natural Gas Transmission
11% Field Services
18% Merchant Energy & Power
14% Production
------
$1,400
------
Coastal
Stand-alone
-----------
[Pie graph]
35% Natural Gas Transmission
6% Field Services
18% Merchant Energy & Power
27% Production
14% Refining & Other
-------
$1,200
-------
Combined
Company
-----------
[Pie graph]
47% Natural Gas Transmission
9% Field Services
18% Merchant Energy & Power
20% Production
6% Refining & Other
--------
$2,600
--------
<PAGE>
OPERATIONS OVERVIEW
* Natural gas transmission
* Field services
<PAGE>
PIPELINES
* Strongest group of assets in the world - best markets and best supply access
* Extremely favorable macro trends
* Growing power generation demand for gas
* Environmentally preferred fuel
* CIG, Southern Natural Gas and Tennessee Gas
Pipelines all essentially fully contracted
* Significant long-term upside on ANR and El Paso Natural Gas
* Growing inventory of expansion projects
* 2-5% growth plus significant free cash flow
<PAGE>
COMBINED PIPELINES
[Map of United States showing El Paso pipelines]
<PAGE>
COMBINED PIPELINES
[Map of United States showing El Paso and Coastal pipelines]
<PAGE>
CURRENTLY PROPOSED PROJECTS
[Map of United States showing El Paso and Coastal pipelines]
Total Generation 165,000 MW
Gas Fired 98%
<PAGE>
NERC REGION COVERAGE
PRESENCE IN ALL NERC REGIONS
[Map of United States showing coverage]
[Regions listed]
WSCC MAPP MAIN
NPCC ECAR MAAC
SPP SERC ERCOT
FRCC
<PAGE>
FIELD SERVICES
* Leading asset position in the fastest growing producing areas:
Rockies, South Texas, Gulf of Mexico and San Juan Basin
* Large combined E&P company will expand opportunity set significantly
* Increased potential to grow El Paso Energy Partners
* Significant integration opportunities
<PAGE>
COMBINED FIELD SERVICES
[Map of United States showing El Paso coverage]
El Paso
- - Gathering --- Offshore
* Processing
<PAGE>
COMBINED FIELD SERVICES
[ Map of United States showing Coastal and El Paso coverage]
- - Gathering --- Offshore
* Processing
<PAGE>
1999E FIELD SERVICES PROFILE
El Paso Coastal Combined
-----------------------------------
Miles of gathering 11,000 4,000 15,000
Gathering throughput (BBTu/d) 4,420 1,000 5,420
Processing and treating plants 11 15 26
Processing throughput (BBTU/d) 1,030 525 1,555
Total throughput (BBTu/d) 5,450 1,525 6,975
NGL production (Bbls/d) 60,000 55,000 115,000
<PAGE>
OPERATING REVIEW
* PRODUCTION
* MERCHANT ENERGY AND POWER
* REFINING
<PAGE>
1999E COMBINED U.S. RESERVE PROFILE
Bcfe
El Paso Coastal Combined % of Total
_______________________________________________
Gulf Coast Onshore 1,130 1,340 2,470 49
Offshore 275 810 1,085 22
Rockies - 1,460 1,460 29
________________________________________________
Total 1,405 3,610 5,015 100%
================================================
2000E production 240 375 615 --
% hedged 90% 20% 48% --
<PAGE>
PROFILE
* Key areas of technical leadership
* Deep drilling
* Completion procedures
* Seismic processing and interpretation
* Strong positions in highest growth areas - South Texas, Rockies, and
coalbed methane
* Huge backlog of development projects
* Several large emerging plays - Gulf of Mexico tight sands, James Lime,
Big Ticket, horizontal Castlegate, Bossier sand
<PAGE>
E&P STRATEGY
* Manage for value creation and return
* Strict criteria
* Earnings focus
* Aggressively hedge price risk
* Build synergies with other El Paso segments
<PAGE>
E&P/FIELD SERVICES SYNERGIES
$ Millions
Annual Revenue
Potential
_______________________________________________________________
Raton Basin Pipeline $ 5-10
James Lime Gathering 6-8
CBM Gathering/Pipeline 5-7
Alabama Intrastate 2-5
______________
$18 - $30
<PAGE>
OUTLOOK
* Sustainable production growth at attractive finding and development costs
* Free cash flow generator
* Limit earnings volatility
* Price hedging
* Maintain large project inventory
<PAGE>
MERCHANT ENERGY AND POWER
* Expanded asset base for Project Electron
* Combines El Paso gas and power marketing with strong, asset-based
crude oil operation
* Significant equity gas position
* Scale of company will enhance growth
* Over $50 MM in identified incremental revenues
<PAGE>
MERCHANT ENERGY REVENUE SYNERGIES
$ Millions
Annual Revenue
Potential
_________________
Power plant restructuring $ 10 - 15
Structured gas transaction 10 - 20
Equity gas marketing/hedging 10 - 25
Long fuel supply transactions 20 - 30
Incremental power marketing 20 - 40
(Tolling, financing, and reverse NUG)
----------------
$ 70 - 130
<PAGE>
INTERNATIONAL
* Highly complementary asset positions
* Fuel terminals provide strong potential synergies
* Southeast Asia
* Latin America
* Advances strategy to build regional businesses
<PAGE>
COMBINED POWER GENERATION PROFILE
El Paso Coastal Combined
___________________________________
Number of plants 50 18 68
Gross power (MW)
Domestic 5,420 2,040 7,460
International 7,710 1,850 9,560
___________________________________
Total 13,130 3,890 17,020
===================================
Net power (MW)
Domestic 3,520 1,130 4,650
International 2,450 890 3,340
-----------------------------------
Total 5,970 2,020 7,990
===================================
<PAGE>
COMBINED OPERATIONS
[Graphic of Map of World with El Paso operations]
El Paso
o E&P Assets
[] Power Plants
+ Pipelines
<PAGE>
[Graphic of Map of World with El Paso and Coastal operations]
El Paso
o E&P Assets
[] Power Plants
+ Pipelines
Coastal
o E&P Assets
^ Terminaling
[] Power Plants
+ Pipelines
<PAGE>
COASTAL REFINING
* Three principal refineries with 540,000 BOPD capacity (2000E)
* 6% of combined company EBIT
* Ability to process heavier crude oils provides cost advantage
* Successful program to enhance profitability and reduce volatility
* Aruba expansion
* Crude supply agreements at Aruba and Eagle Point
* Aggressively hedge price risk
<PAGE>
[Logo] El Paso Energy [Logo] The Coastal Corporation
FINANCIAL REVIEW
----------------------------------------------
COMBINED FINANCIAL STATISTICS
$ Millions
Pro Forma
1999E El Paso Coastal Combined
__________________________________________________________________________
Revenues $10,600 $7,600 $18,200
EBIT 1,100 990 2,090
EBITDA 1,700 1,500 3,200
Net income 420 500 920
Year-end 1999E
__________________________________________________________________________
Total assets $16,800 $14,700 $31,500
Total debt 6,340 5,020 11,360
Preferred & minority int. 1,690 750 2,440
Common equity* 8,520 7,700 18,525
-------------------------------------------------
$16,550 $13,470 $32,325
1999 YE shares outstanding 230 214 499
* Based on 1/14/00 closing prices of $37.125 for EPG and $36 for CGP
<PAGE>
POSITIVE PRO FORMA CREDIT IMPACT
El Paso Combined Company
Stand-alone Pro Forma
_______________________________________________________________________
Total Debt/Total Capital 57.8% 54.9%
Net Debt/ EBITDA 3.8x 3.6x
EBITDA/Interest 3.7x 3.9x
<PAGE>
COST SAVING COMPARISON
Synergies as Percent of Total O&M
$ Millions
[Chart]
El Paso Restructuring
$100 Synergies
$300 Total O&M 33%
Tenneco
$150 Synergies
$600 Total O&M 25%
Sonat
$100 Synergies
$300 Total O&M 33%
Coastal
$200 Syneries
$1,200 Total O&M 17%
<PAGE>
COMMODITY PRICE SENSITIVITY:
EPS SENSITIVITY ANALYSIS
2001E Target (Hedged Basis)
________________________________________
$ % $ %
__________________________________________________________________________
El Paso stand-alone
$0.10/McF natural gas +$0.05 +1.8% - -
- -
Combined company
$0.10/Mcf natural gas +$0.08 +2.7% +$0.04 +1.3%
- - - -
$0.25/Bbl 2-1-1 crack spread +$0.05 +1.6% +$0.025 +0.8%
- - - -
<PAGE>
[Logo] El Paso Energy [Logo] The Coastal Corporation
SUMMARY
----------------------------------------------------
<PAGE>
EIGHT YEARS OF ACCELERATING
EL PASO ENERGY GROWTH
$ and Shares Outstanding in Millions
Post
Post Post Sonat Pro Forma
IPO Tenneco Merger Coastal
3/31/92 12/31/96 12/31/99E Merger
- ----------------------------------------------------------------------------
Total assets $ 2,081 $ 8,843 $16,800 $31,500
Shares outstanding 74 111 230 499
Equity Market value $ 844 $ 2,791 $ 8,520 $18,525
Total enterprise value $ 1,481 $ 6,182 $16,550 $32,325
<PAGE>
STOCK PRICE APPRECIATION
As of December 31, 1999
[Graph]
EPG 309%
S&P 500 264%
S&P Natural 226%
S&P Natural
EPNG Gas S&P 500
0.00% 0.00% 0.00%
12/31/1992 63.00% 21.00% 8.00%
12/31/1993 89.00% 39.00% 15.00%
12/31/1994 61.00% 28.00% 14.00%
12/31/1995 51.00% 76.00% 52.00%
12/31/1996 166.00% 127.00% 83.00%
12/31/1997 250.00% 162.00% 140.00%
12/31/1998 266.00% 180.00% 204.00%
12/31/1999 309.00% 226.00% 264.00%
<PAGE>
EBIT GROWTH
Pro Forma 2000-
Combined 2001
Segment 2000E Growth Rate Comments
- ------------------------------------------------------------------------------
Pipelines $1,240 3-5% Existing expansion
Production 520 12-16% Built-in production growth
Merchant Energy
and Power 460 20-30% Project Electron: revenue
synergies; international
ramp-up
Field Services 220 20-30% Growing volumes plus
continued acquisitions and
revenue synergies
Refining and Other 160 20-25% Full year of Aruba expansion
------------------------------------------------------------
$2,600 15-20% Includes full-year synergies
<PAGE>
SIGNFICANT ACCRETION
FROM COMBINATION
- ---------------------------------------------------------------------------
OVER 5% EPS ACCRETION IN 2001 AND 2002
VERSUS EL PASO STAND-ALONE
- ---------------------------------------------------------------------------
<PAGE>
[Logo] El Paso Energy
EL PASO ENERGY CORPORATION/
COASTAL CORPORATION MERGER
---------------------------------
January 2000
