The Natural Gas Boom to Fuel El Paso’s Growth

- October 5th, 2011

Seeking Alpha reported that natural gas demand has lead to El Paso’s growth.

Seeking Alpha reported that natural gas demand has lead to El Paso’s growth.

As quoted in the market news:

El Paso (EP) is an energy company that operates two segments: pipeline and exploration & production. Management recently decided to spin-off the E&P unit to shareholders in an effort to maximize shareholder value. Given that the parts were trading below peer multiples, the spin off will enable the market to focus more on the respective fundamentals and close the discount. The new company, El Paso Energy, will explore and develop natural gas, oil and NGLs currently in the United States, Brazil, and Egypt.

El Paso Energy will benefit from being one of the largest independent natural gas producers, while the pipeline segment will benefit from a successful current $8B backlog. The latter segment will also have interests in El Paso Pipeline Partners L.P. (EPB) and have control over 10 natural gas transmission systems.

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