Note:  The assets for sale are in the Midcontinent, Rockies, and Gulf Coast areas.  They also play to put certain assets (like Valero) into their MLP.  LB

El Paso to Sell Gulf, Midcontinent, Rockies Assets 
El Paso Corp. added a little more flavor to its $2.25 billion divestiture plan for next year, pinpointing three major locations -- the Gulf of Mexico, Midcontinent and the Rocky Mountains -- as areas where assets will be sold by the second quarter of 2002. The plan, part of a massive overhaul by the management team within the past few days, comes as El Paso shores up its balance sheet triggered in part by Enron Corp.'s bankruptcy and a host of other problems that have hit the energy industry this year. 
According to Ralph Eads, president of the El Paso Merchant Energy Group, the assets are "things that we would have sold previously, but were not in a position to do." CEO William Wise noted that El Paso's earnings into next year would be "less attributable to divestitures and a reduction in capital and mostly in (cutbacks) in the international power business." Wise added that 80% of El Paso's earnings before interest and taxes are "things we can point to with specificity." 
The plan was part of a major overhaul announced by the company on Wednesday.  Though the company has not specifically announced which assets it will divest in the next two quarters, Eads included these locations on the short list: 
Gulf of Mexico assets, "particularly the deepwater," where El Paso does not have significant interests and some of its shelf properties in the Gulf; 
Midcontinent assets; 
Rockies assets, including properties in the Piceance basin. 
El Paso also is divesting some Texas midstream assets to its master limited partnership. These assets include the sale of EPGT Texas Pipeline (GTT) -- formerly PG&E Gas Transmission Texas and before that Valero -- to El Paso Energy Partners LP (EPN). Also to be sold are some refinery assets, including the Eagle Point refinery and some coal assets that had been part of The Coastal Corp. (which has since merged with El Paso). 
Even with the projected asset sales, Eads said that production in 2002 will increase about 2%, reaching 660 Bcfe/d with a capital budget of $1.7 billion. "The budget is oriented toward drilling and drilling opportunities," said Eads. He said El Paso views its exploration and production unit "as a bank," and expects the unit to generate more than $1 billion next year. 
Operationally, he said El Paso is on track to add 1.5 Bcf from its Gulf of Mexico and South Texas properties, "the strongest drilling performance of any company in the United States." The major expansion will be in South Texas, where Eads said El Paso has substantial assets. "We have 400 Bcfe in South Texas fields alone...136 locations left and most of those are not booked. We feel very good about our ability to sustain our production in South Texas," and he added that the company's Santa Fe field was the "best we've ever found."