Oil and gas producer El Paso Corp. (EP) Thursday provided its outlook for fiscal 2010, expecting adjusted earnings per share to come in line with analysts' expectations. The company also revealed its business plan, including production forecast and budget, for its segments for the full-year 2010.
The Houston, Texas-based natural gas exploration and production company said it expects fiscal 2010 net income in a range of $0.53 to $0.73 per share, and adjusted net income in a range of $0.75 to $0.95 per share.
On average, 13 analysts polled by Thomson Reuters currently expect the company to earn $0.88 per share for fiscal 2010. Analysts' estimates typically exclude special items.
Adjusted earnings before interest, taxes and depreciation and amortization or adjusted EBITDA are expected between $2.9 billion and $3.1 billion, and adjusted earnings before interest and taxes or adjusted EBIT is projected to be in the range of $2 billion to $2.2 billion.
The fiscal 2010 cash flow from operations is anticipated to be between $1.6 billion and $1.8 billion. Capital program for 2010 is expected to be $4.1 billion, with the Pipeline Group's budget estimated at around $2.9 billion, including 100% of the Ruby Pipeline Project, and the Exploration and Production program budget is expected to be $1.1 billion. Meanwhile $0.1 billion is allocated for corporate purposes.
The Pipeline Group's estimated budget of around $2.9 billion includes about $0.5 billion as maintenance capital, and $2.4 billion for growth projects, including $1.7 billion for 100% of Ruby. Meanwhile, the Exploration and Production program budget of $1.1 billion includes $0.9 billion allocated to domestic programs, with roughly half of domestic capital being allocated to the Haynesville Shale, Eagle Ford Shale and Altamont oil programs.
In a statement, Chairman, President and Chief Executive Officer, Doug Foshee said, "El Paso is finishing one of its best years ever operationally. Our pipelines continue to execute extremely well on the construction of our committed backlog, while developing new opportunities for future growth, such as the Marcellus Shale. Our E&P business has had an excellent year, as domestic operations have exceeded expectations with the advancement of our Haynesville, Eagle Ford and Altamont programs."
The company said that its Pipeline Group currently has an industry-leading backlog of committed pipeline and LNG projects, most of which will be placed into service by the end of 2011. El Paso also expects to deliver its construction backlog on time and on budget.
El Paso's Exploration & Production is expected to produce between 720 and 760 million cubic feet equivalent per day or MMcfe/d, including its proportionate interest in Four Star Oil & Gas in 2010. The company anticipates cash costs per unit in a range of $1.90 to $2.20 per Mcfe, and DD&A rates to be between $1.65 and $1.85 per Mcfe. The company added that its risked unproved resources have grown sharply, and currently totals almost 5 trillion cfe.
Additionally, the company noted that its targets for 2010 assumes commodity prices of $5.50 per MMBtu for natural gas on NYMEX, and $60.00 per barrel for oil. The company added that adjusted EBITDA and adjusted earnings per share would increase by about $40 million and $0.03 per share, respectively, if the average annual NYMEX price of natural gas increase by a dollar, while a decrease of a dollar would see a decline of about $30 million and $0.02 per share, respectively.
Meanwhile, a $10 change in the WTI price for oil would impact 2010 adjusted EBITDA and adjusted EPS positively or negatively by about $15 million and $0.01 per share, respectively.
"We enter 2010 with excellent momentum, and during our investor and analyst meeting today, we will touch on the robust outlook we have for the next several years," Foshee added.
Separately, El Paso's limited partnership company El Paso Pipeline Partners. L.P. (EPB) said is targeting 2010 distributable cash flow of $240 million to $250 million. Total capital expenditures are expected to be $210 million to $240 million, including $175 million to $200 million of expansion capital. Maintenance capital is expected to be $35 million to $40 million.
In Thursday's regular trading session, EP is currently trading at $9.20, down $0.20 or 2.08% on a volume of 4.64 million shares. In the past 52-week period, the stock has been trading in a range of $5.22 to $11.37.
EPB is currently trading at a 52-week high of $24.27, up $0.22 or 0.91% on a volume of 38,700 shares.
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