HOUSTON, TEXAS, March 27, 2003 — El Paso Merchant Energy (EPME), a unit of El Paso Corp., announced that it has concluded a settlement with the Commodity Futures Trading Commission (CFTC) on a previously disclosed investigation relating to the inaccurate reporting of information on natural gas trades to energy industry publications that compile and report index prices.
As a result, the CFTC issued an order filing and simultaneously settling an administrative action against EPME. Under this order, EPME agreed to pay a civil monetary penalty in the amount of $20 million without admitting or denying the findings in the CFTC’s order. The settlement requires EPME to pay $10 million immediately and the remaining $10 million within three years.
The company is not aware of any evidence that any of the inaccurate reporting affected any published index price.
El Paso previously reported that, as a result of its internal investigation, the company discovered circumstances where inaccurate information regarding natural gas trades was reported by former employees to various energy industry publications that compile and report index prices. The company voluntarily reported this information to the CFTC and other relevant federal agencies. As noted in the CFTC Order, El Paso cooperated fully with the Commission after making its initial disclosure. The company continues to cooperate with the government in its review of these matters.
El Paso is committed to the highest ethical standards for all of its operations and noted that these actions were contrary to the company’s Code of Conduct. The company reiterated its previous statement that any inaccurate reporting is unacceptable. The personnel engaged in these activities are no longer with the company, and El Paso has previously announced its plans to exit the energy trading business.
El Paso Corporation is a provider of natural gas services and the largest pipeline company in North America. The company has core businesses in production, pipelines, midstream services, and power. El Paso Corporation, rich in assets and fully integrated across the natural gas value chain, is committed to developing new supplies and technologies to deliver energy. For more information, visit www.elpaso.com.