1066107--3/1/2010--EL_PASO

related topics

{gas, price, oil}

{loss, insurance, financial}

{financial, litigation, operation}

{capital, credit, financial}

{customer, product, revenue}

{condition, economic, financial}

{debt, indebtedness, cash}

{cost, contract, operation}

{cost, regulation, environmental}

{operation, international, foreign}

{stock, price, operating}

{operation, natural, condition}

{personnel, key, retain}

Certain of our pipeline systems transportation services are subject to long-term, fixed-price negotiated rate contracts that are not subject to adjustment, even if our cost to perform such services exceeds the revenues received from such contracts, and, as a result, our costs could exceed our revenues received under such contracts. The revenues of our pipeline businesses are generated under contracts that must be renegotiated periodically. Fluctuations in energy commodity prices could adversely affect our pipeline businesses. The expansion of our pipeline systems by constructing new facilities subjects us to construction and other risks that may adversely affect the financial results of our pipeline businesses. Our pipeline systems depend on certain key customers and producers for a significant portion of their revenues. The loss of any of these key customers could result in a decline in our systems revenues. We are exposed to the credit risk of our pipeline customers and our credit risk management may not be adequate to protect against such risk. We are exposed to the credit and performance risk of our key contractors and suppliers. Natural gas and oil prices are volatile. A substantial decrease in natural gas and oil prices could adversely affect the financial results of our exploration and production business. The success of our exploration and production business is dependent, in part, on the following factors. Our natural gas and oil drilling and producing operations involve many risks and may not be profitable. Estimating our reserves, production and future net cash flow is inherently imprecise. The success of our exploration and production business depends upon our ability to replace reserves that we produce. We face competition from third parties to acquire and develop natural gas and oil reserves. Our use of derivative financial instruments could result in financial losses. Our foreign operations and investments involve special risks. The midstream business may be subject to additional risks associated with fluctuations in energy commodity prices. A decrease in demand for NGL products by the petrochemical, refining or heating industries could affect the profitability of our midstream business. We will face competition from third parties in our midstream businesses We will face additional reserve and volumetric risk in our midstream business. Retained liabilities associated with businesses that we have sold could exceed our estimates and we could experience difficulties in managing these liabilities. Our business requires the retention and recruitment of a skilled workforce and the loss of employees could result in the failure to implement our business plans. Risks Related to Legal and Regulatory Matters The outcome of governmental investigations could be materially adverse to us. The agencies that regulate our pipeline businesses and their customers could affect our profitability. Environmental compliance and remediation costs and the costs of environmental liabilities could exceed our estimates. Costs of litigation matters and other contingencies could exceed our estimates. Risks Related to Our Liquidity We have significant debt and below investment grade credit ratings, which have impacted and will continue to impact our financial condition, results of operations and liquidity. A breach of the covenants applicable to our debt and other financing obligations could affect our ability to borrow funds and could accelerate our debt and other financing obligations and those of our subsidiaries. Adverse general global economic conditions could negatively affect our operating results, financial condition, liquidity or our share price. We are subject to financing and interest rate risks. Our available liquidity could be impacted by decreases in our natural gas and oil reserves under our borrowing base facility of our exploration and production subsidiary. Our ability to sell assets or obtain partners on projects, to maintain adequate liquidity may be impacted by adverse general economic conditions. Our inability to satisfy all conditions precedent under the transaction with Global Infrastructure Partners (GIP) associated with the development, construction and financing of the Ruby pipeline project could require us to pay all amounts owed to GIP under the associated equity and debt instruments.

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1066107--3/1/2010--EL_PASO_CORP/DE