El Paso Corporation says that its proved natural gas and oil reserves at December 31, 2008 totaled 2.5 Tcfe, including 222 Bcfe related to its 48.8 percent interest in Four Star.

"El Paso had a very good year in terms of reserve additions, percentage of reserves replaced and domestic reserve replacement costs, excluding the effects of significant price-related revisions at year-end," said Doug Foshee, president and chief executive officer of El Paso Corporation. "Extensions and discoveries were up 69 percent over 2007 results, which demonstrate significant improvement in our E&P business. And the $2.87 per Mcfe domestic reserve replacement costs, excluding price-related revisions, is our best performance since I joined El Paso in 2003. While a sharp drop in commodity prices had a significant impact on year-end reserves, it is important to note that the year-end reserve calculation assumed very little reduction in service costs, which have fallen since year end and continue to decline. If we had calculated our year-end reserves assuming a Henry Hub natural gas price of $7.00 per MMBtu, $70.00 per barrel WTI pricing and assuming no further reduction in service costs, El Paso's reserves, including our interest in Four Star, would have been approximately 3.0 Tcfe."

Approximately 74 percent of the December 31, 2008, proved reserves are proved developed, and 92 percent are natural gas. Approximately 85 percent of price-related revisions are attributable to the decline in oil and NGL prices. Of the price-related revisions, approximately 300 Bcfe were domestic, the largest portion of which was related to the company's Altamont oil properties. In addition, El Paso did not book any reserves from the Camarupim (Bia) project in Brazil due to the sharp drop in oil prices.

Tags: El Paso Corporation