<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 26, 2000
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------
EL PASO ENERGY CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 76-0568816
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
</TABLE>
<TABLE>
<S> <C>
BRITTON WHITE JR.
EXECUTIVE VICE PRESIDENT
AND GENERAL COUNSEL
EL PASO ENERGY BUILDING EL PASO ENERGY BUILDING
1001 LOUISIANA STREET 1001 LOUISIANA STREET
HOUSTON, TEXAS 77002 HOUSTON, TEXAS 77002
(713) 420-2131 (713) 420-2131
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, (NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE
INCLUDING NUMBER,
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE INCLUDING AREA CODE, OF AGENT FOR SERVICE)
OFFICES)
</TABLE>
------------------------
COPIES TO:
G. MICHAEL O'LEARY, ESQ.
ANDREWS & KURTH L.L.P.
600 TRAVIS, SUITE 4200
HOUSTON, TEXAS 77002
(713) 220-4360
------------------------
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement, as determined
in light of market conditions and other factors.
------------------------
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1933, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act of 1933, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PROPOSED
MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(2) PER SHARE(3) OFFERING PRICE(3) REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock(1)................. 66,845 $47.344 $3,164,709.68 $836.00
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes preferred stock purchase rights relating to each share of Common
Stock, par value $3.00 per share. The preferred stock purchase rights are
associated with and trade with the Common Stock.
(2) The number of shares of Common Stock registered hereby is subject to
adjustment to prevent dilution resulting from stock splits, stock dividends
or similar transactions.
(3) Estimated solely for the purpose of determining the registration fee.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
WE WILL AMEND AND COMPLETE THE INFORMATION IN THIS PROSPECTUS. ALTHOUGH
WE ARE PERMITTED BY UNITED STATES FEDERAL SECURITIES LAWS TO OFFER THESE
SECURITIES USING THIS PROSPECTUS, WE MAY NOT SELL THEM OR ACCEPT YOUR
OFFER TO BUY THEM UNTIL THE DOCUMENTATION FILED WITH THE SEC RELATING TO
THESE SECURITIES HAS BEEN DECLARED EFFECTIVE BY THE SEC. THIS PROSPECTUS
IS NOT AN OFFER TO SELL THESE SECURITIES OR OUR SOLICITATION OF YOUR
OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THAT WOULD NOT
BE PERMITTED OR LEGAL.
SUBJECT TO COMPLETION -- MAY 26, 2000
PROSPECTUS
MAY , 2000
66,845 SHARES
EL PASO ENERGY CORPORATION
COMMON STOCK
- --------------------------------------------------------------------------------
EL PASO ENERGY CORPORATION:
- - El Paso Energy is a diversified energy holding company. It is engaged through
its subsidiaries and affiliates in: the interstate and intrastate
transportation, gathering, processing, and storage of natural gas; the
marketing of natural gas, power, and other energy-related commodities; the
generation of power; the development and operation of energy infrastructure
facilities worldwide; and the domestic exploration and production of oil and
natural gas. El Paso Energy owns the only integrated coast-to-coast natural
gas pipeline system in the United States.
- - El Paso Energy Corporation
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
(713) 420-2131
TRADING SYMBOL & MARKET:
- - EPG/New York Stock Exchange
THE OFFERING:
- - This prospectus relates to 66,845 shares of our common stock, par value $3.00
per share.
- - All of the shares are being offered by the selling stockholders named in this
prospectus. We will not receive any proceeds from this offering but will incur
some of the expenses.
- - On May 25, 2000, the closing price of our common stock on the NYSE was $48.625
per share, and there were 231,181,137 shares outstanding on that date.
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" ON PAGE 2.
- --------------------------------------------------------------------------------
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED
OF THESE SECURITIES OR DETERMINED THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
Risk Factors........................... 2
Cautionary Statement Regarding
Forward-Looking Statements........... 8
Business of El Paso Energy............. 10
Recent Developments.................... 11
Use of Proceeds........................ 12
Selling Stockholders................... 13
Where You Can Find
More Information..................... 13
Plan of Distribution................... 15
Legal Matters.......................... 16
Experts................................ 16
</TABLE>
<PAGE> 4
RISK FACTORS
Before you invest in our common stock, you should read the risks,
uncertainties and factors which may adversely affect El Paso Energy that are
discussed under the caption "Risk Factors -- Cautionary Statement For Purposes
of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of
1995" in the El Paso Energy 1999 Annual Report on Form 10-K which are
incorporated by reference in this prospectus, as well as the following
additional risk factors which contemplate the consummation of the proposed
business combination of El Paso Energy and The Coastal Corporation discussed in
this prospectus in the section "Business of El Paso Energy -- Merger with The
Coastal Corporation."
RISKS RELATED TO THE PROPOSED MERGER WITH COASTAL AND COASTAL'S OPERATIONS
WE WILL BE OPERATING IN HIGHLY COMPETITIVE INDUSTRIES.
Most of the natural gas and natural gas liquids we transport, gather,
process and store are owned by third parties. As a result, the volume of natural
gas and natural gas liquids involved in these activities depends on the actions
of those third parties and is beyond our control. Further, the following
factors, most of which are beyond our control, may unfavorably impact our
ability to maintain or increase current transmission, storage, gathering,
processing and sales volumes and rates, to renegotiate existing contracts as
they expire or to remarket unsubscribed capacity:
- future weather conditions, including those that favor hydroelectric
generation or other alternative energy sources;
- price competition;
- drilling activity and supply availability;
- the expiration of significant contracts; and
- service competition, especially due to current excess pipeline capacity
into California.
If we are unable to compete with the services offered by other energy
enterprises which may be larger, offer more services, and possess greater
resources, the future profitability of the combined company may be negatively
impacted.
THE REVENUES OF OUR PIPELINE BUSINESSES ARE GENERATED UNDER CONTRACTS THAT MUST
BE RENEGOTIATED PERIODICALLY.
Substantially all of the revenues of the combined company's pipeline
subsidiaries are generated under natural gas transportation contracts which
expire periodically and must be renegotiated and extended or replaced. Although
we actively pursue the renegotiation, extension and/or replacement of the
contracts, we cannot assure you that we will be able to extend or replace these
contracts when they expire or that the terms of any renegotiated contracts will
be as favorable as the existing contracts.
In particular, our ability to extend and/or replace transportation
contracts could be harmed by factors we cannot control, including:
- the proposed construction by other companies of additional pipeline
capacity in the markets served by Tennessee Gas Pipeline Company and
Southern Natural Gas Company and in the Wisconsin market served by ANR
Pipeline Company;
- changes in state regulation of local distribution companies, which may
cause them to negotiate short-term contracts;
2
<PAGE> 5
- reduced demand due to higher natural gas prices;
- the availability of alternative energy sources; and
- the viability of our expansion projects.
If we are unable to renew, extend or replace these contracts or if we renew
them on less favorable terms, we may suffer a material reduction in our revenues
and earnings.
FLUCTUATIONS IN ENERGY COMMODITY PRICES COULD ADVERSELY AFFECT OUR BUSINESS.
If natural gas prices in the supply basins connected to our pipeline
systems are higher than prices in other gas producing regions, especially
Canada, our ability to compete with other transporters may be negatively
impacted. Revenues generated by our gathering and processing contracts depend on
volumes and rates, both of which can be affected by the prices of natural gas
and natural gas liquids. The success of our expanding gathering and processing
operations in the offshore Gulf of Mexico is subject to continued development of
additional oil and gas reserves in the vicinity of our facilities and our
ability to access these additional reserves to offset the natural decline from
existing wells connected to our systems. A decline in energy prices could
precipitate a decrease in these development activities and could cause a
decrease in the volume of reserves available for gathering and processing
through our offshore facilities. Fluctuations in energy prices, which may impact
gathering rates and investments by third parties in the development of new oil
and gas reserves connected to our gathering and processing facilities, are
caused by a number of factors, including:
- regional, domestic and international supply and demand;
- the availability and adequacy of transportation facilities;
- energy legislation;
- federal and state taxes, if any, imposed on the sale or transportation of
natural gas and natural gas liquids; and
- the abundance of supplies of alternative energy sources.
If there are reductions in the average volume of the natural gas and
natural gas liquids we transport, gather and process for a prolonged period, our
results of operations and financial position could be significantly negatively
affected.
THE RATES WE ARE ABLE TO CHARGE OUR CUSTOMERS MAY BE REDUCED BY GOVERNMENTAL
AUTHORITIES.
Our pipeline businesses are regulated by the Federal Energy Regulatory
Commission (FERC) and various state and local regulatory agencies. In
particular, the FERC generally limits the rates we are permitted to charge our
customers for interstate natural gas transportation and, in some cases, sales of
natural gas. If the rates we are permitted to charge our customers for use of
our regulated pipelines are lowered, the profitability of our pipeline
businesses may be reduced.
THE SUCCESS OF OUR OIL AND GAS EXPLORATION AND PRODUCTION BUSINESSES IS
DEPENDENT ON FACTORS WHICH CANNOT BE PREDICTED WITH CERTAINTY.
The performance of our exploration and production businesses is dependent
upon a number of factors that we cannot control. These factors include:
- fluctuations in crude oil and natural gas prices;
- the results of future drilling activity;
3
<PAGE> 6
- our ability to identify and precisely locate prospective geologic
structures and to drill and successfully complete wells in those
structures in a timely manner;
- our ability to expand our leased land positions in desirable areas, which
often are subject to intensely competitive leasing conditions;
- risks incident to operations of natural gas and oil wells; and
- future drilling, production and development costs, including drilling rig
rates.
ESTIMATES OF OIL AND GAS RESERVES MAY CHANGE.
Actual production, revenues, taxes, development expenditures and operating
expenses with respect to the combined company's reserves will likely vary from
our estimates of proved reserves of oil and gas included in this document and in
documents we have incorporated by reference, and those variances may be
material. The process of estimating oil and gas reserves is complex, requiring
significant decisions and assumptions in the evaluation of available geological,
geophysical, engineering and economic data for each reservoir or deposit. As a
result, these estimates are inherently imprecise. Actual future production, oil
and gas prices, revenues, taxes, development expenditures, operating expenses
and quantities of recoverable oil and gas reserves may vary substantially from
our estimates. In addition, we may be required to revise the reserve
information, downward or upward, based upon production history, results of
future exploration and development, prevailing oil and gas prices and other
factors, many of which will be beyond the combined company's control.
OUR USE OF DERIVATIVE FINANCIAL INSTRUMENTS COULD RESULT IN FINANCIAL LOSSES.
We expect that the non-regulated subsidiaries of the combined company will
use futures and option contracts traded on the New York Mercantile Exchange,
over-the-counter options and price and basis swaps with other gas merchants and
financial institutions. These instruments are intended to reduce exposure to
short-term volatility in changes in energy commodity prices. The combined
company could, however, incur financial losses in the future as a result of
volatility in the market values of the underlying commodities or if one of our
counterparties fails to perform under a contract. Furthermore, because the
valuation of these financial instruments can involve estimates, changes in the
assumptions underlying these estimates can occur, changing the valuation of
these instruments and potentially resulting in the combined company suffering
financial losses.
THE SUCCESS OF OUR POWER GENERATION AND MARKETING ACTIVITIES DEPENDS ON MANY
FACTORS, SOME OF WHICH MAY BE BEYOND OUR CONTROL.
The success of our international and domestic power projects and power
marketing activities, and the amount of the related performance-based management
fee paid to El Paso Energy in connection with the Electron financing structure
could be adversely affected by factors beyond our control, including:
- alternative sources and supplies of energy becoming available due to new
technologies and interest in self generation and cogeneration;
- uncertain regulatory conditions resulting from the recent deregulation of
the electric industry in the United States and in foreign jurisdictions;
- our ability to negotiate successfully and enter into, restructure or
recontract advantageous long-term power purchase agreements; and
- the possibility of a reduction in the projected rate of growth in
electricity usage as a result of factors such as regional economic
conditions and the implementation of conservation programs.
4
<PAGE> 7
OUR TELECOMMUNICATIONS BUSINESS STRATEGY IS UNPROVEN.
Our experience in the telecommunications industry is limited, and we cannot
assure you that our strategic communications objectives, such as marketing
telecommunications capacity on our proposed fiber-optic network, will be
successful. Our success depends in part on our ability to integrate and adapt
our facilities and services to keep pace with advances in communications
technologies and the new and improved devices and services that result from
these changes. In addition, the market for fiber-optic networks and
telecommunications services is rapidly evolving, and although we expect demand
for these services to grow, we cannot assure you that this growth will occur.
Additionally, the price of fiber optic capacity is expected to continue to
decline because of increases in newly installed fiber optic capacity coming on
the market and rapid fiber optic equipment technology improvements. Further,
various critical issues, including security, reliability, ease and costs of
access, uncertain governmental regulation, and quality of service remain
unresolved and may adversely affect our business. We cannot assure you,
therefore, that our telecommunications strategy will be successful.
OUR FOREIGN INVESTMENTS INVOLVE SPECIAL RISKS.
Our activities in areas outside the United States are subject to the risks
inherent in foreign operations, including:
- loss of revenue, property and equipment as a result of hazards such as
expropriation, nationalization, wars, insurrection and other political
risks; and
- the effects of currency fluctuations and exchange controls, such as the
recent devaluation of the Indonesian and Brazilian currencies and other
economic problems.
These legal and regulatory events and other unforeseeable obstacles may be
beyond our control or ability to manage.
COSTS OF ENVIRONMENTAL LIABILITIES, REGULATION AND LITIGATION COULD EXCEED OUR
ESTIMATES.
Our current and former operations involve management of regulated materials
and are subject to various environmental laws and regulations. These laws and
regulations obligate us to clean up various sites at which petroleum, chemicals,
low-level radioactive substances or other regulated materials may have been
disposed of or released. Some of these sites have been designated Superfund
sites by the U.S. Environmental Protection Agency under the Comprehensive
Environmental Response, Compensation and Liability Act. Each of us is also a
party to legal proceedings involving environmental matters pending in various
courts and agencies.
It is not possible for us to estimate reliably the amount and timing of all
future expenditures related to environmental matters because of:
- the difficulty of estimating clean up costs;
- the uncertainty in quantifying liabilities under environmental laws that
impose joint and several liability on all potentially responsible
parties; and
- the nature of environmental laws and regulations.
Although we believe we have established appropriate reserves for
liabilities, including clean up costs, we could be required to set aside
additional reserves in the future due to these uncertainties.
OUR OPERATIONS ARE SUBJECT TO OPERATIONAL HAZARDS AND UNINSURED RISKS.
Our exploration, production, transportation, gathering, refining and
processing operations are subject to the inherent risks normally associated with
those operations, including explosions, pollution,
5
<PAGE> 8
release of toxic substances, fires and other hazards, each of which could result
in damage to or destruction of our facilities or damage to persons and property.
If any of these events were to occur, we could suffer substantial losses.
While we maintain insurance against these types of risks to the extent and
in amounts that we believe are reasonable, our financial condition and
operations could be adversely affected if a significant event occurs that is not
fully covered by insurance.
EL PASO ENERGY'S SENIOR MANAGEMENT HAS LIMITED EXPERIENCE OPERATING REFINERIES
AND CHEMICAL PLANTS AND IN THE COAL PRODUCTION BUSINESS AND KEY COASTAL
PERSONNEL NECESSARY TO OPERATE THESE BUSINESSES COULD TERMINATE THEIR EMPLOYMENT
WITH THE COMBINED COMPANY.
El Paso Energy's senior management has limited experience in the operation
of refineries and chemical plants and in the coal production businesses, all of
which are currently engaged in by Coastal. We cannot assure you that any of
Coastal's current personnel involved with those operations and businesses will
remain with the combined company after we complete the merger.
Thirteen of Coastal's executive officers are parties to individual
employment agreements and one additional executive officer or employee may
become a party to an employment agreement prior to the merger. Each of those
persons will have the right to receive substantial payments if their employment
is terminated by the combined company, or if they terminate their employment for
good reason after the effective time of the merger. In addition, several Coastal
executive officers will be eligible to participate in a voluntary early
retirement incentive window program. The window program will provide enhanced
retirement benefits that employees may consider to be of significant value.
Accordingly, El Paso Energy expects that a substantial number of Coastal
executive officers and other key employees will likely terminate their
employment within one to three years following the effective time of the merger.
WE CANNOT ASSURE YOU THAT OUR TWO COMPANIES WILL BE SUCCESSFULLY COMBINED INTO A
SINGLE ENTITY.
If we cannot successfully combine our operations we may experience a
material adverse effect on our business, financial condition or results of
operations. The merger involves the combining of two companies that have
previously operated separately. The combining of companies such as Coastal and
El Paso Energy involves a number of risks, including:
- the diversion of management's attention to the combining of operations;
- difficulties in the combining of operations and systems;
- difficulties in the assimilation and retention of employees;
- challenges in keeping customers; and
- potential adverse short-term effects on operating results.
Among the factors considered by the board of directors of each company in
approving the merger agreement were the opportunities for economies of scale and
scope, opportunities for growth and operating efficiencies that could result
from the merger. Although we expect the combined company to achieve significant
annual savings in operating costs as a result of the merger, we may not be able
to maintain the levels of operating efficiency that we each previously achieved
or might achieve if we remain separate. Because of difficulties in combining
operations, we may not be able to achieve the cost savings and other
size-related benefits that we hope to achieve after the merger.
6
<PAGE> 9
THE COMPANIES COULD BE REQUIRED TO EFFECT SIGNIFICANT DIVESTITURES OR COMPLY
WITH OTHER REGULATORY REQUIREMENTS.
We cannot complete the merger until the waiting period under the HSR Act
has expired or terminated. We are also required to obtain the approval of the
FERC in order to complete the merger.
We are both obligated under the terms of the merger agreement to use our
reasonable best efforts to take all actions to ensure that the waiting period
under the HSR Act and all extensions of that period expire or are terminated and
other required approvals, including approval of the FERC, are obtained. Neither
of us is obligated, however, to sell any portion of its business or take actions
that would reasonably be likely to have a material adverse effect on the
business, financial condition, or results of operations of the combined company
after the merger. El Paso Energy is also not required to take any action that
would be reasonably likely to have a material adverse effect on El Paso Energy's
subsidiary, Tennessee Gas Pipeline Company, or Coastal's subsidiary, ANR
Pipeline Company. Coastal may not make any sale or take any of the other actions
described above without El Paso Energy's approval. Governmental authorities
could require the companies to effect significant divestitures as a condition to
approving the transaction or impose other conditions that would affect
subsequent operations of the combined company. In some cases, the FERC has
conditioned its approval of a merger, including requiring restrictions on
affiliate transactions and on sales of electric generation capacity. Even after
the FERC approves the merger, the FERC will have continuing jurisdiction over
the combined company's pipelines and power marketing business to affect the
rates, terms and conditions of its service and to affect its dealings with
affiliates.
We cannot assure you that these and any other required regulatory approvals
will be obtained or, if they are obtained, as to the terms, conditions and
timing of these approvals. These requirements for regulatory approvals could
delay completion of the merger for a significant period.
7
<PAGE> 10
CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS
We have made statements in this document and in documents that we have
incorporated by reference into this document that constitute forward-looking
statements, as that term is defined in the Private Securities Litigation Reform
Act of 1995. These statements are subject to risks and uncertainties.
Forward-looking statements include information concerning possible or assumed
future results of operations of El Paso Energy, Coastal or the combined company.
These statements may relate to, but are not limited to, information or
assumptions about earnings per share, capital and other expenditures, dividends,
financing plans, capital structure, cash flow, pending legal proceedings and
claims, including environmental matters, future economic performance, operating
income, cost savings, management's plans, goals and objectives for future
operations and growth and markets for the stock of El Paso Energy, Coastal and
the combined company. These forward-looking statements generally are accompanied
by words such as "intend," "anticipate," "believe," "estimate," "expect,"
"should" or similar expressions. You should understand that these
forward-looking statements are necessarily estimates reflecting the best
judgment of senior management of El Paso Energy and Coastal, not guarantees of
future performance. They are subject to a number of assumptions, risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in the forward-looking statements. Important factors that
could cause actual results to differ materially from estimates or projections
contained in forward-looking statements include, among others, the following:
- the risk that earnings may be adversely affected by fluctuating energy
prices;
- the risk that rates charged to customers may be reduced by governmental
authorities;
- the highly competitive nature of the natural gas transportation,
gathering, processing and storage businesses, the oil and gas exploration
and production business, the energy marketing and power generation
industries, the crude oil refining and chemical production businesses and
the coal mining business;
- the risk of favorable customer contracts expiring or being renewed on
less attractive terms;
- the timing and success of our exploration and development drilling
programs, which would affect production levels and reserves;
- changes to our estimates of oil, gas and coal reserves;
- the risk of financial losses arising out of hedging transactions;
- risks incident to the drilling and operation of oil and gas wells;
- risks incident to operating crude oil refineries, chemical plants and
coal mines;
- future drilling, production and development costs, including drilling rig
rates;
- the costs of environmental liabilities, regulations and litigation;
- the impact of operational hazards;
- the risk that required regulatory approvals for proposed pipeline,
storage and power generation projects may be delayed or may only be
granted on terms that are unacceptable or significantly less favorable
than anticipated;
- the risks associated with future weather conditions;
- the risk that Coastal's businesses may not be successfully integrated
with El Paso Energy's businesses;
8
<PAGE> 11
- the risk that we may not fully realize the benefits expected to result
from the merger;
- the impact of the loss of key employees; and
- the risk that other firms will further expand into markets in which El
Paso Energy or Coastal operate.
These factors are more fully described in "Risk Factors." Other factors
that could cause actual results to differ materially from estimates and
projections contained in forward-looking statements are described in the
documents that we incorporated by reference into this document. In addition, we
can give you no assurance that:
- we have correctly identified and assessed all of the factors affecting El
Paso Energy's or Coastal's businesses;
- the publicly available and other information with respect to these
factors on which we have based our analysis is complete or correct;
- our analysis is correct; or
- our strategies, which are based in part on this analysis, will be
successful.
Accordingly, you should not place undue reliance on forward-looking
statements, which speak only as of the date of this prospectus, or, in the case
of documents incorporated by reference, the date of those documents.
All subsequent written and oral forward-looking statements attributable to
El Paso Energy, Coastal, the combined company or any person acting on their
behalf are expressly qualified in their entirety by the cautionary statements
contained or referred to in this section. Neither Coastal nor El Paso Energy
undertakes any obligation to release publicly any revisions to these
forward-looking statements to reflect events or circumstances after the date of
this prospectus or to reflect the occurrence of unanticipated events.
9
<PAGE> 12
BUSINESS OF EL PASO ENERGY
BUSINESS
El Paso Energy is a global energy company with a presence in all aspects of
the rapidly evolving wholesale energy industry.
El Paso Energy's principal operations include:
- the interstate and intrastate transportation, gathering, processing and
storage of natural gas;
- the marketing of natural gas, power and other energy-related commodities;
- the generation of power;
- the development and operation of energy infrastructure facilities
worldwide; and
- domestic exploration and production of oil and natural gas.
El Paso Energy owns or has interests in over 40,000 miles of interstate and
intrastate pipeline connecting the nation's principal natural gas supply regions
to the five largest consuming regions in the United States: the Gulf Coast,
California, the Northeast, the Midwest and the Southeast. El Paso Energy's
natural gas transmission operations represent the nation's largest and only
integrated coast-to-coast mainline natural gas transmission system comprised of
interests in the Florida Gas Transmission pipeline and the Portland Natural Gas
Transmission pipeline system and six wholly owned interstate pipeline systems:
- Tennessee Gas pipeline;
- El Paso Natural Gas pipeline;
- Southern Natural Gas pipeline;
- South Georgia Natural Gas pipeline;
- Midwestern Gas Transmission pipeline; and
- Mojave pipeline systems.
Through Merchant Energy, El Paso Energy is a major intermediary in the
wholesale natural gas and electric power markets, and is engaged in buying and
selling natural gas, pipeline capacity, natural gas storage, power and other
energy commodities throughout North America. El Paso Energy has also become one
of the largest non-utility owners of electric generating capacity in the United
States. In its operations, El Paso Energy uses sophisticated systems and
financial modeling capabilities to evaluate and measure risks inherent in its
markets, then intermediates those risks using its presence in and knowledge of
the financial and physical commodity markets.
El Paso Energy's international activities focus on the development and
operation of international energy infrastructure projects. These activities
include ownership interests in three major operating natural gas transmission
systems in Australia and natural gas transmission systems and power generation
facilities currently in operation or under construction in Argentina,
Bangladesh, Bolivia, Brazil, Chile, China, the Czech Republic, Hungary, India,
Indonesia, Mexico, Pakistan, Peru, the Philippines and the United Kingdom.
El Paso Energy, through El Paso Field Services Company, provides natural
gas gathering, products extraction, dehydration, purification, compression and
intrastate transmission services. These services include gathering of natural
gas from more than 10,000 natural gas wells with approximately 11,000 miles of
gathering lines and 11 natural gas processing and treating facilities located in
some of
10
<PAGE> 13
the most prolific and active production areas of the United States, including
the San Juan and Permian Basins, east and south Texas, Louisiana, and in the
Gulf of Mexico. El Paso Energy conducts its intrastate transmission operations
through its interests in five intrastate systems, including the Oasis pipeline
running from west Texas to Katy, Texas, the Channel pipeline extending from
south Texas to the Houston Ship Channel, the Shoreline and Tomcat gathering
systems, which gather gas from the Texas Gulf Coast, and the Gulf States
pipeline, which extends from the Texas border to Ruston, Louisiana. Through El
Paso Energy Partners L.P., a publicly traded master limited partnership in which
El Paso Energy indirectly is the general partner, El Paso Energy conducts
natural gas and oil gathering, transmission, midstream and other related
services offshore in the Gulf of Mexico.
El Paso Energy's natural gas and oil exploration and production activities
include properties with approximately 2.8 million net acres under lease in 11
states, including Louisiana, Texas, Oklahoma, Arkansas, and New Mexico, as well
as in the Gulf of Mexico. At December 31, 1999, El Paso Energy's proved reserves
totaled approximately 1.5 trillion cubic feet of natural gas equivalent (Tcfe).
El Paso Energy is pursuing a telecommunications strategy that will leverage
its extensive North American natural gas pipeline system, its core competency in
right-of-way development and, to the extent that bandwidth associated with fiber
optic capacity becomes actively traded, its marketing and trading skills in
newly developed commodity products. El Paso Energy, with partners or on its own,
is currently planning to install a fiber optic network along certain key
segments of its pipeline system and may expand this network beyond its pipeline
system through fiber capacity swaps with or leases from other third-party fiber
optic companies.
Our principal executive offices are in the El Paso Energy Building, located
at 1001 Louisiana Street, Houston, Texas 77002, and our telephone number at that
address is (713) 420-2131.
RECENT DEVELOPMENTS
MERGER WITH THE COASTAL CORPORATION
In January 2000, El Paso Energy entered into a definitive agreement to
merge a wholly owned subsidiary with The Coastal Corporation. In the merger, El
Paso Energy will convert each share of Coastal common stock and Class A common
stock on a tax-free basis into 1.23 shares of our common stock. El Paso Energy
will exchange Coastal's outstanding convertible preferred stock for our common
stock on the same basis as if El Paso Energy had converted the preferred stock
into Coastal common stock immediately prior to the merger. The total value of
the transaction is approximately $16 billion, including $6 billion of assumed
debt and preferred equity. El Paso Energy will account for the transaction as a
pooling of interests, and expects it to close in the fourth quarter of 2000. On
May 5, 2000, Coastal stockholders approved and adopted the merger agreement and
our stockholders approved the issuance of shares of common stock in connection
with the merger. The merger will be completed only if a number of conditions are
met or waived, including:
- no law or court order prohibits the transaction;
- all relevant waiting periods under federal antitrust laws applicable to
the merger expire or terminate;
- all other regulatory approvals, including the approval of the FERC, are
received without conditions that would have a material adverse effect on
the financial condition, results of operations, or cash flow of the
post-merger combined businesses;
11
<PAGE> 14
- the independent public accountants of both companies concur that the
merger will qualify for pooling of interests accounting treatment; and
- attorneys for both companies issue opinions that the merger is expected
to be tax-free.
However, El Paso Energy cannot assure you that we will complete the merger
even if all those conditions are satisfied or waived.
Coastal is a diversified energy holding company. It is engaged, through its
subsidiaries and joint ventures, in natural gas transmission, storage,
gathering, processing and marketing; natural gas and oil exploration and
production; petroleum refining, marketing and distribution; owns interests in
approximately 18,000 miles of natural gas pipelines extending across the
midwestern and the Rocky Mountain areas of the United States and has proved
reserves of 3.6 Tcfe. Coastal also has international and domestic interests in
natural gas and oil producing properties, power generation plants, and crude oil
refining facilities.
PURCHASE OF TEXAS MIDSTREAM OPERATIONS
In January 2000, El Paso Energy entered into an agreement to purchase the
natural gas and natural gas liquids businesses of PG&E Gas Transmission, Texas
Corporation, and PG&E Gas Transmission Teco, Inc. The value of the transaction
is approximately $840 million, including assumed debt of $561 million. The
acquisition is expected to close during the second or third quarter of 2000 and
is subject to the receipt of certain required governmental approvals and third
party consents. El Paso Energy will account for the transaction as a purchase
and will include the acquired operations in our Field Services segment.
El Paso Energy will acquire assets consisting of 8,500 miles of intrastate
natural gas transmission pipelines that transport approximately 2.8 billion
cubic feet per day (Bcf/d) in the South Texas area, nine natural gas processing
plants that currently process 1.5 Bcf/d, and a 7.2 Bcf natural gas storage
field. The transaction also includes significant natural gas liquids pipelines
and fractionation facilities.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of the shares of
common stock offered by this prospectus.
12
<PAGE> 15
SELLING STOCKHOLDERS
This prospectus relates to the sale by certain selling stockholders from
time to time of up to 66,845 shares of El Paso Energy common stock. The selling
stockholders acquired the shares of common stock being offered by this
prospectus in May 2000 pursuant to certain "earn-out" rights granted to them in
connection with our acquisition of EnCap Investments L.C. in March of 1999. The
shares of common stock offered by the selling stockholders are included in the
registration statement of which this prospectus is a part pursuant to an
undertaking made in connection with the EnCap acquisition. The following table
sets forth as of May 25, 2000 certain information with respect to the selling
stockholders.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED BEFORE NUMBER OF
OFFERING NUMBER OF SHARES BENEFICIALLY
-------------------- SHARES OWNED AFTER
SELLING STOCKHOLDER NUMBER PERCENT BEING OFFERED OFFERING(1)
------------------- -------- -------- ------------- -------------------
<S> <C> <C> <C> <C>
David B. Miller...................... 35,266 * 15,040 20,226
Gary R. Peterson..................... 46,123 * 15,040 31,083
D. Martin Phillips................... 46,123 * 15,040 31,083
Robert L. Zorich..................... 46,123 * 15,040 31,083
Banc One Capital Partners VIII,
Ltd................................ 6,685 * 6,685 0
------- ------- -------
Total................................ 180,320 * 66,845 113,475
======= ======= =======
</TABLE>
- -------------------------
* Less than 1%
(1) Assumes that each selling stockholder will sell all of the shares set forth
above under "Number of Shares Being Offered." The selling stockholders may
offer all, some or none of their shares.
We will pay all costs and expenses incurred in connection with the
registration under the Securities Act of 1933 of the shares offered hereby,
including, but not limited to, all registration and filing fees, the NYSE
listing fee, printing expenses and fees and disbursements of counsel and
accountants for El Paso Energy. The selling stockholders will pay all brokerage
fees and commissions, if any, incurred in connection with the sale of the
shares.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement under the Securities
Act of 1933 that registers the shares to be sold by the selling stockholders.
The registration statement, including the attached exhibits, contains additional
relevant information about us. The rules and regulations of the SEC allow us to
omit some information included in the registration statement from this
prospectus.
In addition, we file reports, proxy statements and other information with
the SEC under the Securities Exchange Act of 1934. You may read and copy this
information at the following locations of the SEC:
<TABLE>
<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
Room 1024 Suite 100 Citicorp Center
450 Fifth Street, N.W. 7 World Trade Center Suite 1400
Washington, D.C. 20549 New York, New York 10048 500 West Madison Street
Chicago, Illinois 60661-2511
</TABLE>
13
<PAGE> 16
You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, at prescribed rates. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. The SEC also maintains an
Internet World Wide Web site that contains reports, proxy statements and other
information about issuers, including El Paso Energy and Coastal, who file
electronically with the SEC. The address of that site is http://www.sec.gov. You
can also inspect reports, proxy statements and other information about each of
us at the offices of The New York Stock Exchange, Inc., located at 20 Broad
Street, New York, New York 10005.
The SEC allows us to "incorporate by reference" information into this
document. This means that we can disclose important information to you by
referring you to another document filed separately with the SEC. The information
incorporated by reference is considered to be part of this document, except for
any information that is superseded by information that is included directly in
this document.
We incorporate by reference the documents listed below that we have
previously filed with the SEC. They contain important information about our
company and its financial condition. Some of these filings have been amended by
later filings, which are also listed.
<TABLE>
<CAPTION>
OUR SEC FILINGS (FILE NO. 1-14365) DESCRIPTION OR PERIOD/AS OF DATE
---------------------------------- --------------------------------
<S> <C>
Annual Report on Form 10-K Year ended December 31, 1999
Quarterly Report on Form 10-Q Quarter ended March 31, 2000
Current Report on Form 8-K, dated January Discloses the entering into of the merger
18, 2000 agreement between El Paso Energy and
Coastal and related matters
Current Report on Form 8-K/A, dated Contains, as an exhibit, a presentation to
January 20, 2000 analysts regarding the proposed merger
Current Report on Form 8-K, dated February Discloses the entering into an agreement
2, 2000 to purchase the natural gas and natural
gas liquids businesses of subsidiaries of
PG&E Corporation
Current Report on Form 8-K, dated March Discloses unaudited pro forma financial
10, 2000 information of El Paso Energy and Coastal
giving effect to the proposed merger
Current Report on Form 8-K, dated March Discloses the filing of a comprehensive
16, 2000 settlement agreement with the Federal
Energy Regulatory Commission regarding a
rate proceeding and closings of the sales
of East Tennessee Natural Gas Company and
Sea Robin Pipeline Company
Current Report on Form 8-K, dated March Filing the Restated Certificate of
29, 2000 Incorporation and a Certificate of
Designation
Current Report on Form 8-K dated May 19, Discloses unaudited pro forma financial
2000 information of El Paso Energy and Coastal
giving effect to the proposed merger.
Registration Statement on Form 8-A, dated Contains a description of the El Paso
August 3, 1998 Energy common stock
Registration Statement on Form 8-A/A dated Contains a description of the El Paso
January 29, 1999 Energy preferred stock purchase rights
</TABLE>
14
<PAGE> 17
<TABLE>
<CAPTION>
OUR SEC FILINGS (FILE NO. 1-14365) DESCRIPTION OR PERIOD/AS OF DATE
---------------------------------- --------------------------------
<S> <C>
Definitive Proxy Statement on Schedule 14A Definitive proxy statement relating to the
2000 annual meeting of El Paso Energy's
stockholders (filed on March 7, 2000, and
revised on March 17, 2000)
</TABLE>
We incorporate by reference additional documents that either company may
file with the SEC until all of the shares offered by this prospectus have been
sold. These documents include periodic reports, including Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as well as
proxy statements.
You can obtain any of the documents incorporated by reference in this
document through us or from the SEC through the SEC's web site at the address
provided above. Documents incorporated by reference are available from us
without charge, excluding any exhibits to those documents unless the exhibit is
specifically incorporated by reference as an exhibit in this document. You can
obtain documents incorporated by reference in this document by requesting them
in writing or by telephone from us at the following address:
El Paso Energy Corporation
Office of Investor Relations
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
Telephone No.: (713) 420-2131
WE HAVE NOT AUTHORIZED ANYONE TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION THAT DIFFERS FROM, OR ADDS TO, THE INFORMATION IN THIS DOCUMENT
OR IN OUR DOCUMENTS THAT ARE PUBLICLY FILED WITH THE SEC. THEREFORE, IF ANYONE
DOES GIVE YOU DIFFERENT OR ADDITIONAL INFORMATION, YOU SHOULD NOT RELY ON IT.
IF YOU ARE IN A JURISDICTION WHERE IT IS UNLAWFUL TO OFFER TO EXCHANGE OR
SELL, OR TO ASK FOR OFFERS TO EXCHANGE OR BUY, THE SHARES OF COMMON STOCK
OFFERED BY THIS DOCUMENT, OR IF YOU ARE A PERSON TO WHOM IT IS UNLAWFUL TO
DIRECT THESE ACTIVITIES, THEN THE OFFER PRESENTED BY THIS DOCUMENT DOES NOT
EXTEND TO YOU.
THE INFORMATION CONTAINED IN THIS DOCUMENT SPEAKS ONLY AS OF ITS DATE
UNLESS THE INFORMATION SPECIFICALLY INDICATES THAT ANOTHER DATE APPLIES.
PLAN OF DISTRIBUTION
The shares of common stock offered by the selling stockholders may be
offered and sold by means of this prospectus from time to time as market
conditions permit in one or more transactions on the NYSE, in the
over-the-counter market, in negotiated transactions or otherwise, or through a
combination of these methods, at fixed prices, which may be changed, at prices
and terms then prevailing or at prices related to the then-current market price,
or at negotiated prices. These shares may be sold by one or more of the
following methods, without limitation:
- a block trade in which a broker or dealer will attempt to sell the shares
as agent but may position and resell a portion of the block as principal
to facilitate the transaction;
- purchases by a broker or dealer as principal and resale by the broker or
dealer for its account pursuant to this prospectus;
- ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
- face-to-face transactions between sellers and purchasers without brokers
or dealers.
15
<PAGE> 18
In making sales, brokers or dealers engaged by the selling stockholders may
arrange for other brokers or dealers to participate. These brokers or dealers
may receive commissions or discounts from selling stockholders in amounts to be
negotiated.
To the extent required, this prospectus may be amended or supplemented from
time to time to describe a specific plan of distribution. In effecting sales,
brokers or dealers engaged by the selling stockholders may arrange for other
brokers or dealers to participate in the resales.
The selling stockholders and any persons who participate in the
distribution of the shares offered by this prospectus may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, and any
commissions received by them and profit on any resale of the shares as principal
may be considered underwriting discounts and commissions under the Securities
Act of 1933.
The shares will be sold only through registered or licensed brokers or
dealers if required under applicable state securities laws. In addition, in
certain states the shares may not be sold unless they have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
Under applicable rules and regulations under the Securities Exchange Act of
1934, any person engaged in the distribution of the shares may not
simultaneously engage in market making activities with respect to our common
stock for a specified period prior to the commencement of such distribution and
until its completion. In addition, each selling stockholder will be subject to
applicable provisions of the Securities Exchange Act of 1934 and the associated
rules and regulations under the Securities Exchange Act of 1934, including
Regulation M, which provisions may limit the timing of purchases and sales of
shares of our common stock by the selling stockholders. We will make copies of
this prospectus available to the selling stockholders and have informed them of
the need for delivery of copies of this prospectus to purchasers at or prior to
the time of any sale of the shares.
LEGAL MATTERS
The validity of the shares of common stock offered hereby will be passed
upon by Andrews & Kurth L.L.P., Houston, Texas.
EXPERTS
The consolidated financial statements of El Paso Energy as of December 31,
1999 and 1998, and for each of the three years ended December 31, 1999,
incorporated by reference in this prospectus have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
The consolidated financial statements of The Coastal Corporation as of
December 31, 1999 and 1998, and for each of the three years in the period ended
December 31, 1999, included in El Paso Energy's Current Report on Form 8-K dated
March 10, 2000 which is incorporated herein by reference, have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report, which is
also incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in accounting
and auditing.
16
<PAGE> 19
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
MAY , 2000
66,845 SHARES
EL PASO ENERGY CORPORATION
COMMON STOCK
----------------------
PROSPECTUS
----------------------
- --------------------------------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE YOU
WRITTEN INFORMATION OTHER THAN THIS PROSPECTUS OR TO MAKE REPRESENTATIONS AS TO
MATTERS NOT STATED IN THIS PROSPECTUS. YOU MUST NOT RELY ON UNAUTHORIZED
INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES OR OUR
SOLICITATION OF YOUR OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE
THAT WOULD NOT BE PERMITTED OR LEGAL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALES MADE HEREUNDER AFTER THE DATE OF THIS PROSPECTUS SHALL CREATE AN
IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THE AFFAIRS OF EL PASO
ENERGY HAVE NOT CHANGED SINCE THE DATE HEREOF.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 20
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than selling
or underwriting discounts and commissions, to be incurred by El Paso Energy in
connection with the issuance and distribution of the shares of common stock
being registered. All amounts shown are estimated except the Commission
registration fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 836
Printing and engraving expenses............................. 9,500
Legal fees and expenses..................................... 10,000
Accounting fees and expenses................................ 5,000
Miscellaneous............................................... 1,500
-------
Total.................................................. $26,836
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees and
individuals against expenses (including attorneys' fees), judgments, fines, and
amounts paid in settlement in connection with specified actions, rules, or
proceedings, whether civil, criminal, administrative, or investigative (other
than action by or in the right of the corporation -- a "derivative action"), if
they acted in good faith and in a manner they reasonably believed to be in or
not opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe their conduct
was unlawful. A similar standard is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with the defense or settlement of such
action, and the statute requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation. The statute provides that it is not exclusive of other
indemnification that may be granted by a corporation's charter, by-laws,
disinterested director vote, stockholder vote, agreement, or otherwise.
Article X of El Paso Energy's By-laws require indemnification to the full
extent permitted under Delaware law as from time to time in effect. Subject to
any restrictions imposed by Delaware law, the By-laws of El Paso Energy provide
an unconditional right to indemnification for all expense, liability, and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes, or penalties
and amounts paid in settlement) actually and reasonably incurred or suffered by
any person in connection with any actual or threatened proceeding (including, to
the extent permitted by law, any derivative action) by reason of the fact that
such person is or was serving as a director, officer, or employee of El Paso
Energy or that, being or having been such a director or officer or an employee
of El Paso Energy, such person is or was serving at the request of El Paso
Energy as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, including an employee
benefit plan. The By-laws of El Paso Energy also provide that El Paso Energy
may, by action of its Board of Directors, provide indemnification to its agents
with the same scope and effect as the foregoing indemnification of directors and
officers.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the
II-1
<PAGE> 21
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability for (i) any breach of the director's
duty of loyalty to the corporation or its stockholders, (ii) acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) payment of unlawful dividends or unlawful stock purchases or
redemptions, or (iv) any transaction from which the director derived an improper
personal benefit.
Article 10 of El Paso Energy's Restated Certificate of Incorporation, as
amended, provides that to the full extent that the Delaware General Corporation
Law, as it now exists or may hereafter be amended, permits the limitation or
elimination of the liability of directors, a director of El Paso Energy shall
not be liable to El Paso Energy or its stockholders for monetary damages for
breach of fiduciary duty as a director. Any amendment to or repeal of such
Article 10 shall not adversely affect any right or protection of a director of
El Paso Energy for or with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.
El Paso Energy maintains directors' and officers' liability insurance which
provides for payment, on behalf of the directors and officers of El Paso Energy
and its subsidiaries, of certain losses of such persons (other than matters
uninsurable under law) arising from claims, including claims arising under the
Securities Act, for acts or omissions by such persons while acting as directors
or officers of El Paso Energy and/or its subsidiaries, as the case may be.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- -------
<C> <C> <S>
4.1 -- Restated Certificate of Incorporation of El Paso Energy
(incorporated by reference to Exhibit 3.A to El Paso
Energy's Form 8-K, filed March 31, 2000).
4.2 -- Certificate of Designation, Preferences and Rights of Series
B Mandatorily Convertible Single Reset Preferred Stock of El
Paso Energy (Exhibit 4.A of El Paso Energy's Form 8-K filed
March 31, 2000).
4.3 -- Restated By-laws of El Paso Energy (incorporated by
reference to Exhibit 3.B to El Paso Energy's Form 10-Q,
filed November 12, 1999).
4.4 -- Amended and Restated Shareholder Rights Agreement, dated
January 20, 1999, between El Paso Energy and BankBoston,
N.A., as Rights Agent (incorporated by reference to Exhibit
1 of El Paso Energy's registration statement on Form 8-A/A
Amendment No. 1, filed January 29, 1999).
5.1 -- Opinion of Andrews & Kurth L.L.P. as to the legality of the
common stock being registered.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Deloitte & Touche LLP.
23.3 -- Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
23.4 -- Consent of Huddleston & Co., Inc.
24.1 -- Powers of Attorney (included on signature page).
</TABLE>
II-2
<PAGE> 22
ITEM 17. UNDERTAKINGS
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in this Registration Statement;
provided, however, that paragraphs A(l)(a) and A(l)(b) above do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, such filing of El Paso
Energy's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers, and controlling persons of the
Registrant pursuant to the provisions described in Item 15 above, or otherwise,
the Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
II-3
<PAGE> 23
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Houston, State of Texas, on May 26, 2000.
EL PASO ENERGY CORPORATION
By: /s/ H. BRENT AUSTIN
------------------------------------
H. Brent Austin
Executive Vice President
and Chief Financial Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes H.
Brent Austin and Britton White Jr., and each of them as attorneys-in-fact with
full power of substitution, to execute in the name and on behalf of such person,
individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-effective
amendments.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates as indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ RONALD L. KUEHN, JR. Chairman of the Board and May 26, 2000
- --------------------------------------------------- Director
Ronald L. Kuehn, Jr.
/s/ WILLIAM A. WISE President, Chief Executive May 26, 2000
- --------------------------------------------------- Officer and Director
William A. Wise
/s/ H. BRENT AUSTIN Executive Vice President and May 26, 2000
- --------------------------------------------------- Chief Financial Officer
H. Brent Austin
/s/ JEFFREY I. BEASON Senior Vice President, May 26, 2000
- --------------------------------------------------- Controller, and Chief
Jeffrey I. Beason Accounting Officer
/s/ BYRON ALLUMBAUGH Director May 26, 2000
- ---------------------------------------------------
Byron Allumbaugh
/s/ JUAN CARLOS BRANIFF Director May 26, 2000
- ---------------------------------------------------
Juan Carlos Braniff
</TABLE>
II-4
<PAGE> 24
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JAMES F. GIBBONS Director May 26, 2000
- ---------------------------------------------------
James F. Gibbons
/s/ BEN F. LOVE Director May 26, 2000
- ---------------------------------------------------
Ben F. Love
/s/ MAY L. LUKENS Director May 26, 2000
- ---------------------------------------------------
May L. Lukens
/s/ KENNETH L. SMALLEY Director May 26, 2000
- ---------------------------------------------------
Kenneth L. Smalley
/s/ ADRIAN M. TOCKLIN Director May 26, 2000
- ---------------------------------------------------
Adrian M. Tocklin
/s/ MALCOLM WALLOP Director May 26, 2000
- ---------------------------------------------------
Malcolm Wallop
/s/ JOE B. WYATT Director May 26, 2000
- ---------------------------------------------------
Joe B. Wyatt
/s/ SELIM K. ZILKHA Director May 26, 2000
- ---------------------------------------------------
Selim K. Zilkha
</TABLE>
II-5
<PAGE> 25
EXHIBIT LIST
<TABLE>
<CAPTION>
EXHIBIT
NO. EXHIBIT
- ------- -------
<C> <C> <S>
4.1 -- Restated Certificate of Incorporation of El Paso Energy
(incorporated by reference to Exhibit 3.A to El Paso
Energy's Form 8-K, filed March 31, 2000).
4.2 -- Certificate of Designation, Preferences and Rights of Series
B Mandatorily Convertible Single Reset Preferred Stock of El
Paso Energy (Exhibit 4.A of El Paso Energy's Form 8-K filed
March 31, 2000).
4.3 -- Restated By-laws of El Paso Energy (incorporated by
reference to Exhibit 3.B to El Paso Energy's Form 10-Q,
filed November 12, 1999).
4.4 -- Amended and Restated Shareholder Rights Agreement, dated
January 20, 1999, between El Paso Energy and BankBoston,
N.A., as Rights Agent (incorporated by reference to Exhibit
1 of El Paso Energy's registration statement on Form 8-A/A
Amendment No. 1, filed January 29, 1999).
5.1 -- Opinion of Andrews & Kurth L.L.P. as to the legality of the
common stock being registered.
23.1 -- Consent of PricewaterhouseCoopers LLP.
23.2 -- Consent of Deloitte & Touche LLP.
23.3 -- Consent of Andrews & Kurth L.L.P. (included in Exhibit 5.1).
23.4 -- Consent of Huddleston & Co., Inc.
24.1 -- Powers of Attorney (included on signature page).
</TABLE>
<PAGE> 1
EXHIBIT 5.1
[ANDREWS & KURTH L.L.P. LETTERHEAD]
May 26, 2000
Board of Directors
El Paso Energy Corporation
El Paso Energy Building
1001 Louisiana Street
Houston, Texas 77002
Gentlemen:
We have acted as special counsel to El Paso Energy Corporation, a Delaware
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act"), of the registration statement on Form S-3
filed by the Company with the Commission on May 26, 2000 (the "Registration
Statement"), relating to the offering from time to time of 66,845 shares (the
"Shares") of the Company's common stock, par value $3.00 per share, by certain
selling stockholders named in the Registration Statement.
In arriving at the opinion expressed below, we have examined the Company's
Certificate of Incorporation and Bylaws, each as amended to date, the
Registration Statement, and the originals or copies certified or otherwise
identified to our satisfaction of such other instruments and other certificates
of public officials, officers and representatives of the Company and such other
persons, and we have made such investigations of law, as we have deemed
appropriate as a basis for the opinion expressed below. In rendering the opinion
expressed below, we have assumed and have not verified (i) the genuineness of
the signatures on all documents that we have examined, (ii) the conformity to
the originals of all documents supplied to us as certified or photostatic or
faxed copies, (iii) the authenticity of the originals of such documents and (iv)
as to the forms of all documents in respect of which forms were filed with the
Commission as exhibits to the Registration Statement, the conformity in all
material respects of such documents to the forms thereof that we have examined.
Based on the foregoing, and subject to the limitations and exceptions set
forth below, it is our opinion that the Shares are legally issued and, when sold
in the manner contemplated by the Registration Statement, will continue to be
legally issued and will be fully paid and non-assessable. For the purposes of
the opinion expressed above, we have assumed that the Registration Statement,
and any amendments thereto (including post-effective amendments), will have
become effective. We express no opinion other than as to the federal laws of the
United States of America and the Delaware General Corporation Law. We hereby
consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to this firm under the heading "Legal Matters" in
the prospectus forming part of the Registration Statement without admitting that
we are "experts" under the Act, or the rules and regulations of the Commission
issued thereunder, with respect to any part of the Registration Statement,
including this exhibit. This opinion is rendered solely for your benefit in
connection with the above matter and may not be relied upon in any manner by any
other person or entity without our express written consent.
Very truly yours,
/s/ ANDREWS & KURTH L.L.P.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 16, 2000 relating to the
consolidated financial statements and financial statement schedule, which
appears in El Paso Energy Corporation's Annual Report on Form 10-K for the year
ended December 31, 1999. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Houston, Texas
May 26, 2000
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of El Paso Energy Corporation on Form S-3, of our report dated February 8, 2000,
appearing in the Current Report on Form 8-K of El Paso Energy Corporation, and
to the reference to us under the heading "Experts" in this Registration
Statement.
/s/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Houston, Texas
May 26, 2000
<PAGE> 1
EXHIBIT 23.4
CONSENT OF HUDDLESTON & CO., INC.
We consent to the incorporation by reference in this Registration Statement
of El Paso Energy Corporation on Form S-3 of our report under the captions
"Business -- Gas System Reserves" and "Supplemental Information on Oil and Gas
Producing Activities (Unaudited)" appearing in and incorporated by reference in
the Annual Report on Form 10-K of The Coastal Corporation for the year ended
December 31, 1999 ("Annual Report"), which Annual Report is referenced in that
certain Current Report of El Paso Energy Corporation on Form 8-K incorporated by
reference in this Registration Statement.
HUDDLESTON & CO., INC.
Houston, Texas
May 24, 2000
