##### Table of Contents


















Form 10-Q




[X]


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended March 31, 2005


OR


[  ]


TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)


OF THE SECURITIES EXCHANGE ACT OF 1934


For the transition period
from           to


Commission File Number 333-106586





El Paso Production Holding Company




|                                                                                                      |  |                                                   
|----------------------------------------------------------------------------------------------------- |  | --------------------------------------------------
|Delaware(State or Other Jurisdiction
    of Incorporation or Organization)                            |  | 76-0659544(I.R.S. Employer
    Identification No.)
|                                                                                                     
|El Paso Building
    1001 Louisiana Street
    Houston, Texas(Address of Principal Executive Offices) |  | 77002(Zip Code)                                   

(713) 420-2600


þ o


o þ






EL PASO PRODUCTION HOLDING COMPANY MEETS THE CONDITIONS
OF GENERAL INSTRUCTION H(1)(a) AND (b) TO FORM 10-Q AND IS
THEREFORE FILING THIS REPORT WITH A REDUCED DISCLOSURE FORMAT AS
PERMITTED BY SUCH INSTRUCTION.










---










EL PASO PRODUCTION HOLDING COMPANY


TABLE OF CONTENTS


|                                               |  |                                                                                                                                    |  |      |    | 
|---------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------- |  | ---- | -- | 
|                                               |  | Caption                                                                                                                            |  | Page
|                                               |  |                                                                                                                                    |  |     
|                                               |  | PART I  Financial Information                                                                                                     |  |      |    | 
|Item 1.                                        |  | Financial Statements                                                                                                               |  |      | 1  | 
|Item 2.                                        |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operations                                          |  |      | 9  | 
|                                               |  | Cautionary Statements for Purposes of the
    Safe Harbor Provisions of the Private Securities
    Litigation Reform Act of 1995 |  |      | 14 | 
|Item 3.                                        |  | Quantitative and Qualitative Disclosures
    About Market Risk                                                                     |  |      | *  | 
|Item 4.                                        |  | Controls and Procedures                                                                                                            |  |      | 15 | 
|                                               |  | PART II  Other Information                                                                                                        |  |      |    | 
|Item 1.                                        |  | Legal Proceedings                                                                                                                  |  |      | 16 | 
|Item 2.                                        |  | Unregistered Sales of Equity Securities and
    Use of Proceeds                                                                    |  |      | *  | 
|Item 3.                                        |  | Defaults Upon Senior Securities                                                                                                    |  |      | *  | 
|Item 4.                                        |  | Submission of Matters to a Vote of Security
    Holders                                                                            |  |      | *  | 
|Item 5.                                        |  | Other Information                                                                                                                  |  |      | 16 | 
|Item 6.                                        |  | Exhibits                                                                                                                           |  |      | 16 | 
|                                               |  | Signatures                                                                                                                         |  |      | 17 | 
|Certification of CEO pursuant to Sec. 302     
|Certification of CFO pursuant to Sec. 302     
|Certification of CEO pursuant to Section 1350 
|Certification of CFO pursuant to Section  1350








|  |                                                                                                                                                                                               
|- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | We have not included a response to this item in this document
    since no response is required pursuant to the reduced disclosure
    format permitted by General Instruction H to Form 10-Q.



|      |  |                                                 
|----- |  | ------------------------------------------------
|/d    |  | = per day                                       
|Bbl   |  | = barrels                                       
|Bcfe  |  | = billion cubic feet of natural gas equivalents 
|MBbls |  | = thousand barrels                              
|Mcf   |  | = thousand cubic feet                           
|Mcfe  |  | = thousand cubic feet of natural gas equivalents
|MMBtu |  | = million British thermal units                 
|MMcf  |  | = million cubic feet                            
|MMcfe |  | = million cubic feet of natural gas equivalents 





i



---



##### Table of Contents






PART I  FINANCIAL INFORMATION





Item 1. Financial Statements


EL PASO PRODUCTION HOLDING COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF INCOME


(In millions)


(Unaudited)


|                           |                                          |               |     |    |      |   |     |    | 
|-------------------------- | ---------------------------------------- | ------------- | --- | -- | ---- | - | --- | -- | 
|                           |                                          | Quarter Ended |    
|                           |                                          | March 31,     |    
|                           |                                          |               |    
|                           |                                          | 2005          |     |    | 2004 |  
|                           |                                          |               |     |    |      |  
|Operating revenues         |                                          | $             | 160 |    |      | $ | 219 |   
|                           |                                          |               |     |    |      |  
|Operating expenses         |                                          |               |     |    |      |   |     |   
|                           | Cost of sales                            |               |     | 9  |      |   |     | 9  | 
|                           | Operation and maintenance                |               |     | 42 |      |   |     | 47 | 
|                           | Depreciation, depletion and amortization |               |     | 82 |      |   |     | 93 | 
|                           | Taxes, other than income taxes           |               |     | 9  |      |   |     | 6  | 
|                           |                                          |               |     |    |      |  
|                           |                                          |               | 142 |    |      |   | 155 |   
|                           |                                          |               |     |    |      |  
|Operating income           |                                          |               | 18  |    |      |   | 64  |   
|Other income, net          |                                          |               | 1   |    |      |   |    |   
|Affiliated interest income |                                          |               | 3   |    |      |   | 5   |   
|Interest expense           |                                          |               | (19 | )  |      |   | (18 | ) 
|                           |                                          |               |     |    |      |  
|Income before income taxes |                                          |               | 3   |    |      |   | 51  |   
|Income taxes               |                                          |               | 2   |    |      |   | 18  |   
|                           |                                          |               |     |    |      |  
|Net income                 |                                          | $             | 1   |    |      | $ | 33  |   
|                           |                                          |               |     |    |      |  



1



---



##### Table of Contents



EL PASO PRODUCTION HOLDING COMPANY


CONDENSED CONSOLIDATED BALANCE SHEETS


(In millions, except share amounts)


(Unaudited)


|                                       |                                                                                   |                                                   |                                            |       |              |       |       |       |       |       | 
|-------------------------------------- | --------------------------------------------------------------------------------- | ------------------------------------------------- | ------------------------------------------ | ----- | ------------ | ----- | ----- | ----- | ----- | ----- | 
|                                       |                                                                                   | March 31,                                         |                                            |       | December 31, |      
|                                       |                                                                                   | 2005                                              |                                            |       | 2004         |      
|                                       |                                                                                   |                                                   |                                            |       |              |      
|ASSETS                                
|Current assets                         |                                                                                   |                                                   |                                            |       |              |       |       |      
|                                       | Cash and cash equivalents                                                         |                                                   | $                                          | 23    |              |       | $     | 124   |      
|                                       | Accounts receivable                                                               |                                                   |                                            |       |              |       |       |       |      
|                                       |                                                                                   | Customer, net of allowance of $5 in 2005 and 2004 |                                            |       | 130          |       |       |       | 138   |      
|                                       |                                                                                   | Other                                             |                                            |       | 4            |       |       |       | 4     |      
|                                       | Note receivable from affiliate                                                    |                                                   |                                            | 42    |              |       |       | 145   |      
|                                       | Deferred income taxes                                                             |                                                   |                                            | 133   |              |       |       | 86    |      
|                                       | Other                                                                             |                                                   |                                            | 34    |              |       |       | 25    |      
|                                       |                                                                                   |                                                   |                                            |       |              |      
|                                       |                                                                                   |                                                   | Total current assets                       |       |              | 366   |       |       |       | 522   | 
|                                       |                                                                                   |                                                   |                                            |       |              |      
|Property, plant and equipment, at cost |                                                                                   |                                                   |                                            |       |              |       |       |      
|                                       | Natural gas and oil properties                                                    |                                                   |                                            |       |              |       |       |       |      
|                                       |                                                                                   | Proved properties-full cost method                |                                            |       | 7,695        |       |       |       | 7,313 |      
|                                       |                                                                                   | Unevaluated costs excluded from amortization      |                                            |       | 297          |       |       |       | 253   |      
|                                       | Other                                                                             |                                                   |                                            | 91    |              |       |       | 86    |      
|                                       |                                                                                   |                                                   |                                            |       |              |      
|                                       |                                                                                   |                                                   | 8,083                                      |       |              |       | 7,652 |      
|                                       | Less accumulated depreciation, depletion and amortization                         |                                                   |                                            | 5,319 |              |       |       | 5,239 |      
|                                       |                                                                                   |                                                   |                                            |       |              |      
|                                       |                                                                                   |                                                   | Total property, plant and equipment, net   |       |              | 2,764 |       |       |       | 2,413 | 
|                                       |                                                                                   |                                                   |                                            |       |              |      
|Other assets                           |                                                                                   |                                                   |                                            |       |              |       |       |      
|                                       | Note receivable from affiliate                                                    |                                                   |                                            | 417   |              |       |       | 332   |      
|                                       | Deferred income taxes                                                             |                                                   |                                            | 49    |              |       |       | 132   |      
|                                       | Other                                                                             |                                                   |                                            | 66    |              |       |       | 66    |      
|                                       |                                                                                   |                                                   |                                            |       |              |      
|                                       |                                                                                   |                                                   | 532                                        |       |              |       | 530   |      
|                                       |                                                                                   |                                                   |                                            |       |              |      
|                                       |                                                                                   |                                                   | Total assets                               |       | $            | 3,662 |       |       | $     | 3,465 | 
|                                       |                                                                                   |                                                   |                                            |       |              |      
|                                      
|LIABILITIES AND STOCKHOLDERS EQUITY  
|Current liabilities                    |                                                                                   |                                                   |                                            |       |              |       |       |      
|                                       | Accounts payable                                                                  |                                                   |                                            |       |              |       |       |       |      
|                                       |                                                                                   | Trade                                             |                                            | $     | 85           |       |       | $     | 50    |      
|                                       |                                                                                   | Other                                             |                                            |       | 67           |       |       |       | 67    |      
|                                       | Liabilities from price risk management activities                                 |                                                   |                                            | 393   |              |       |       | 243   |      
|                                       | Accrued interest                                                                  |                                                   |                                            | 31    |              |       |       | 8     |      
|                                       | Other                                                                             |                                                   |                                            | 17    |              |       |       | 25    |      
|                                       |                                                                                   |                                                   |                                            |       |              |      
|                                       |                                                                                   |                                                   | Total current liabilities                  |       |              | 593   |       |       |       | 393   | 
|                                       |                                                                                   |                                                   |                                            |       |              |      
|Long-term debt                         |                                                                                   |                                                   | 1,200                                      |       |              |       | 1,200 |      
|                                       |                                                                                   |                                                   |                                            |       |              |      
|Other                                  |                                                                                   |                                                   |                                            |       |              |       |       |      
|                                       | Liabilities from price risk management activities                                 |                                                   |                                            | 300   |              |       |       | 273   |      
|                                       | Other                                                                             |                                                   |                                            | 104   |              |       |       | 102   |      
|                                       |                                                                                   |                                                   |                                            |       |              |      
|                                       |                                                                                   |                                                   | 404                                        |       |              |       | 375   |      
|                                       |                                                                                   |                                                   |                                            |       |              |      
|Commitments and contingencies          |                                                                                   |                                                   |                                            |       |              |       |       |      
|Stockholders equity                   |                                                                                   |                                                   |                                            |       |              |       |       |      
|                                       | Common stock, par value $1 per share; 1,000 shares
    authorized and outstanding |                                                   |                                            |      |              |       |       |      |      
|                                       | Additional paid-in capital                                                        |                                                   |                                            | 1,780 |              |       |       | 1,701 |      
|                                       | Retained earnings                                                                 |                                                   |                                            | 110   |              |       |       | 109   |      
|                                       | Accumulated other comprehensive loss                                              |                                                   |                                            | (425  | )            |       |       | (313  | )    
|                                       |                                                                                   |                                                   |                                            |       |              |      
|                                       |                                                                                   |                                                   | Total stockholders equity                 |       |              | 1,465 |       |       |       | 1,497 | 
|                                       |                                                                                   |                                                   |                                            |       |              |      
|                                       |                                                                                   |                                                   | Total liabilities and stockholders equity |       | $            | 3,662 |       |       | $     | 3,465 | 
|                                       |                                                                                   |                                                   |                                            |       |              |      



2



---



##### Table of Contents



EL PASO PRODUCTION HOLDING COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


(In millions)


(Unaudited)


|                                     |                                                                               |                                          |                                           |      |      |      |    |      |    |     |  
|------------------------------------ | ----------------------------------------------------------------------------- | ---------------------------------------- | ----------------------------------------- | ---- | ---- | ---- | -- | ---- | -- | --- | -
|                                     |                                                                               | Quarter Ended                            |                                          
|                                     |                                                                               | March 31,                                |                                          
|                                     |                                                                               |                                          |                                          
|                                     |                                                                               | 2005                                     |                                           |      | 2004 |     
|                                     |                                                                               |                                          |                                           |      |      |     
|Cash flows from operating activities |                                                                               |                                          |                                           |      |      |      |    |     
|                                     | Net income                                                                    |                                          | $                                         | 1    |      |      | $  | 33   |   
|                                     | Adjustments to reconcile net income to net cash from operating
    activities |                                          |                                           |      |      |      |    |      |   
|                                     |                                                                               | Depreciation, depletion and amortization |                                           |      | 82   |      |    |      | 93 |    
|                                     |                                                                               | Deferred income taxes                    |                                           |      | 13   |      |    |      | 18 |    
|                                     |                                                                               | Other non-cash income items              |                                           |      |     |      |    |      | 6  |    
|                                     |                                                                               | Asset and liability changes              |                                           |      | 40   |      |    |      | 36 |    
|                                     |                                                                               |                                          |                                           |      |      |     
|                                     |                                                                               |                                          | Net cash provided by operating activities |      |      | 136  |    |      |    | 186 |  
|                                     |                                                                               |                                          |                                           |      |      |     
|Cash flows from investing activities |                                                                               |                                          |                                           |      |      |      |    |     
|                                     | Capital expenditures                                                          |                                          |                                           | (161 | )    |      |    | (145 | ) 
|                                     | Cash paid for acquisitions, net of cash acquired                              |                                          |                                           | (173 | )    |      |    |     |   
|                                     | Change in note receivable from affiliate                                      |                                          |                                           | 18   |      |      |    | 50   |   
|                                     |                                                                               |                                          |                                           |      |      |     
|                                     |                                                                               |                                          | Net cash used in investing activities     |      |      | (316 | )  |      |    | (95 | )
|                                     |                                                                               |                                          |                                           |      |      |     
|Cash flows from financing activities |                                                                               |                                          |                                           |      |      |      |    |     
|                                     | Contribution from parent                                                      |                                          |                                           | 79   |      |      |    |     |   
|                                     |                                                                               |                                          |                                           |      |      |     
|                                     |                                                                               |                                          | Net cash provided by financing activities |      |      | 79   |    |      |    |    |  
|                                     |                                                                               |                                          |                                           |      |      |     
|Change in cash and cash equivalents  |                                                                               |                                          | (101                                      | )    |      |      | 91 |     
|Cash and cash equivalents            |                                                                               |                                          |                                           |      |      |      |    |     
|                                     | Beginning of period                                                           |                                          |                                           | 124  |      |      |    | 34   |   
|                                     |                                                                               |                                          |                                           |      |      |     
|                                     | End of period                                                                 |                                          | $                                         | 23   |      |      | $  | 125  |   
|                                     |                                                                               |                                          |                                           |      |      |     



3



---



##### Table of Contents



EL PASO PRODUCTION HOLDING COMPANY


CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS


(In millions)


(Unaudited)


|                                                      |                                                                                                                                               |                          |      |      |      |   |     |     |     |  
|----------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------ | ---- | ---- | ---- | - | --- | --- | --- | -
|                                                      |                                                                                                                                               | Quarter Ended            |     
|                                                      |                                                                                                                                               | March 31,                |     
|                                                      |                                                                                                                                               |                          |     
|                                                      |                                                                                                                                               | 2005                     |      |      | 2004 |  
|                                                      |                                                                                                                                               |                          |      |      |      |  
|Net income                                            |                                                                                                                                               | $                        | 1    |      |      | $ | 33  |    
|                                                      |                                                                                                                                               |                          |      |      |      |  
|Net gains (losses) from cash flow hedging activities: |                                                                                                                                               |                          |      |      |      |   |     |    
|                                                      | Unrealized mark-to-market losses arising during period
    (net of income taxes of $87 in 2005 and $49 in 2004)                               |                          |      | (151 | )    |   |     | (85 | )  
|                                                      | Reclassification adjustments for changes in initial value to the
    settlement date (net of income taxes of $22 in 2005 and $21 in
    2004) |                          |      | 39   |      |   |     | 35  |    
|                                                      |                                                                                                                                               |                          |      |      |      |  
|                                                      |                                                                                                                                               | Other comprehensive loss |      |      | (112 | ) |     |     | (50 | )
|                                                      |                                                                                                                                               |                          |      |      |      |  
|Comprehensive loss                                    |                                                                                                                                               | $                        | (111 | )    |      | $ | (17 | )  
|                                                      |                                                                                                                                               |                          |      |      |      |  



4



---



##### Table of Contents



EL PASO PRODUCTION HOLDING COMPANY


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


1. Basis of Presentation and Significant Accounting
Policies


Basis of Presentation




Significant Accounting Policies




2. Acquisitions






|                   |  |               |     |  |      |   |     | 
|------------------ |  | ------------- | --- |  | ---- | - | --- | 
|                   |  | Quarter ended |    
|                   |  | March 31,     |    
|                   |  |               |    
|                   |  | 2005          |     |  | 2004 |  
|                   |  |               |     |  |      |  
|                   |  | (In millions) |    
|Operating revenues |  | $             | 167 |  |      | $ | 224 | 
|                   |  |               |     |  |      |  
|Net income         |  | $             | 2   |  |      | $ | 34  | 
|                   |  |               |     |  |      |  

5



---



##### Table of Contents



3. Commitments and Contingencies




| |                                        
| | ---------------------------------------
| | Legal Proceedings and Other Contingency

Grynberg. Qui Tam


Will Price (formerly Quinque). Will Price
et al v. Gas Pipelines and Their Predecessors,
et al.


Reserve Revisions.






| |                  
| | -----------------
| | Other Contingency

Raton.




6



---



##### Table of Contents







| |                      
| | ---------------------
| | Environmental Matters



Air Permit Violation.




Guarantees.




|   |                             
|-- | ----------------------------
|4. | Transactions with Affiliates

Cash Management Program.


Taxes.


7



---



##### Table of Contents



Capital Contribution.


Other Affiliate Balances.




Affiliate Revenues and Expenses.


|                                                           |  |               |     |  |      |   |     | 
|---------------------------------------------------------- |  | ------------- | --- |  | ---- | - | --- | 
|                                                           |  | 2005          |     |  | 2004 |  
|                                                           |  |               |     |  |      |  
|                                                           |  | (In millions) |    
|Operating revenues                                         |  | $             | 115 |  |      | $ | 124 | 
|Operating expenses from affiliates                         |  |               | 27  |  |      |   | 24  | 
|Reimbursements of operating expenses charged to affiliates |  |               | 21  |  |      |   | 22  | 



8



---



##### Table of Contents






Item 2. Managements Discussion and Analysis
of Financial Condition and Results of Operations




Results of Operations




Overview




Operational Factors Affecting the Quarter Ended
March 31, 2005






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Change in realized prices. Realized natural gas prices,
    which include the impact of our hedges, decreased
    eight percent while oil, condensate and natural gas liquids
    (NGL) prices increased 44 percent compared to 2004. Under
    our hedge program, approximately 62 percent of our first
    quarter 2005 natural gas production was hedged at an average
    price of $3.21 per MMBtu, which was significantly below the
    market price for natural gas.                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | Average daily production of 406 MMcfe/d. Our
    production remained relatively stable from the third and fourth
    quarters of 2004 to the first quarter of 2005 for the onshore
    region while the offshore Gulf of Mexico and the Texas Gulf
    Coast regions experienced a decline due to normal production
    declines and mechanical well failures in the Texas Gulf Coast
    region. Average daily production volumes in the first quarter of
    2005 benefited by 24 MMcfe/d from the acquisitions discussed
    below. However, when compared to the first quarter of 2004, our
    first quarter 2005 total equivalent production declined 13 Bcfe,
    or 27 percent, due to production declines in the Texas Gulf
    Coast and offshore Gulf of Mexico regions, which were partially
    offset by increased production from the onshore region.

9



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Capital expenditures of $343 million.Our first
    quarter capital expenditures included acquisitions totaling
    approximately $246 million for properties in east and south
    Texas and the purchase of the interest held by one of our
    partners under a net profits interest agreement. These
    acquisitions added approximately 131 Bcfe of proved
    reserves and 48 MMcfe/d of current production. More
    importantly, the Texas acquisitions offer additional development
    upside in two of our key operating areas. We have successfully
    integrated these acquisitions into our operations with minimal
    additional administrative expenses. The proved reserves
    associated with these acquisitions replace approximately
    88 percent of our 2005 anticipated production based on
    annualized first quarter 2005 production results.
|
| |  | Drilling Results.In the first quarter of 2005, we
    announced a deep shelf discovery at West Cameron Block 75 in the
    Gulf of Mexico. We tested the discovery and anticipate
    deliverability of approximately 40 MMcfe/d to begin in the
    fourth quarter of 2005, after the installation of facilities. We
    are the operator and own a 36 percent working interest and
    an approximate 30 percent net revenue interest in this
    discovery.                                                                                                                                                                                                                                                                                                                                                                                                              

Outlook for Remainder of 2005




Production Hedge Position








|                           |                  |               |      |    |      |   |      |    | 
|-------------------------- | ---------------- | ------------- | ---- | -- | ---- | - | ---- | -- | 
|                           |                  | 2005          |      |    | 2004 |  
|                           |                  |               |      |    |      |  
|                           |                  | (In millions) |     
|Operating revenues         |                  | $             | 160  |    |      | $ | 219  |   
|Operating expenses         |                  |               | (142 | )  |      |   | (155 | ) 
|                           |                  |               |      |    |      |  
|                           | Operating income |               |      | 18 |      |   |      | 64 | 
|Other income, net          |                  |               | 1    |    |      |   |     |   
|                           |                  |               |      |    |      |  
|                           | EBIT             |               |      | 19 |      |   |      | 64 | 
|Affiliated interest income |                  |               | 3    |    |      |   | 5    |   
|Interest expense           |                  |               | (19  | )  |      |   | (18  | ) 
|Income taxes               |                  |               | (2   | )  |      |   | (18  | ) 
|                           |                  |               |      |    |      |  
|Net income                 |                  | $             | 1    |    |      | $ | 33   |   
|                           |                  |               |      |    |      |  

10



---



##### Table of Contents





|                                     |                                               |                                 |    |     |      |   |    |     |      |   |  |  |  | 
|------------------------------------ | --------------------------------------------- | ------------------------------- | -- | --- | ---- | - | -- | --- | ---- | - |  |  |  | 
|                                     |                                               | 2005                            |    |     | 2004 |   |    |    
|                                     |                                               |                                 |    |     |      |   |    |    
|                                     |                                               | (In millions, except            |    |     |     
|                                     |                                               | volumes and prices)             |    |     |     
|Operating revenues:                  |                                               |                                 |    |     |      |   |    |     |      |   |  | 
|                                     | Natural gas                                   |                                 | $  | 126 |      |   | $  | 179 |      |   |  |  | 
|                                     | Oil, condensate and NGL                       |                                 |    | 34  |      |   |    | 40  |      |   |  |  | 
|                                     |                                               |                                 |    |     |      |   |    |     |     
|                                     |                                               | Total operating revenues        |    |     | 160  |   |    |     | 219  |   |  |  |  | 
|Transportation and net product costs |                                               |                                 | (9 | )   |      |   | (9 | )   |      |   |  | 
|                                     |                                               |                                 |    |     |      |   |    |     |     
|                                     |                                               | Total operating margin          |    |     | 151  |   |    |     | 210  |   |  |  |  | 
|Operating expenses:                  |                                               |                                 |    |     |      |   |    |     |      |   |  | 
|                                     | Depreciation, depletion and amortization      |                                 |    | (82 | )    |   |    | (93 | )    |   |  |  | 
|                                     | Production
    costs(1)                       |                                 |    | (25 | )    |   |    | (23 | )    |   |  |  | 
|                                     | General and administrative expenses           |                                 |    | (24 | )    |   |    | (19 | )    |   |  |  | 
|                                     | Taxes, other than production and income taxes |                                 |    | (2  | )    |   |    | (2  | )    |   |  |  | 
|                                     | Restructuring charges                         |                                 |    |    |      |   |    | (9  | )    |   |  |  | 
|                                     |                                               |                                 |    |     |      |   |    |     |     
|                                     |                                               | Total operating
    expenses(2) |    |     | (133 | ) |    |     | (146 | ) |  |  |  | 
|                                     |                                               |                                 |    |     |      |   |    |     |     
|                                     | Operating income                              |                                 |    | 18  |      |   |    | 64  |      |   |  |  | 
|Other income, net                    |                                               |                                 | 1  |     |      |   |   |     |      |   |  | 
|                                     |                                               |                                 |    |     |      |   |    |     |     
|EBIT                                 |                                               | $                               | 19 |     |      | $ | 64 |     |      |   |  | 
|                                     |                                               |                                 |    |     |      |   |    |     |     

|                                    |                                                      |                                                         |                               |        |        |         |   |          |        |      |  |     |     |    |  
|----------------------------------- | ---------------------------------------------------- | ------------------------------------------------------- | ----------------------------- | ------ | ------ | ------- | - | -------- | ------ | ---- |  | --- | --- | -- | -
|                                    |                                                      |                                                         |                               |        |        | Percent |  
|                                    |                                                      | 2005                                                    |                               |        | 2004   |         |   | Variance |       
|                                    |                                                      |                                                         |                               |        |        |         |   |          |       
|Volumes, prices and costs per unit: |                                                      |                                                         |                               |        |        |         |   |          |        |      |  |    
|                                    | Natural gas                                          |                                                         |                               |        |        |         |   |          |        |      |  |     |    
|                                    |                                                      | Volumes (MMcf)                                          |                               |        | 31,198 |         |   |          | 40,924 |      |  |     | (24 | )%
|                                    |                                                      | Average realized prices including
    hedges ($/Mcf)(3) |                               | $      | 4.04   |         |   | $        | 4.37   |      |  |     | (8  | )%
|                                    |                                                      | Average realized prices excluding
    hedges ($/Mcf)(3) |                               | $      | 6.04   |         |   | $        | 5.70   |      |  |     | 6   | % 
|                                    |                                                      | Average transportation costs ($/Mcf)                    |                               | $      | 0.23   |         |   | $        | 0.16   |      |  |     | 44  | % 
|                                    | Oil, condensate and NGL                              |                                                         |                               |        |        |         |   |          |        |      |  |     |    
|                                    |                                                      | Volumes (MBbls)                                         |                               |        | 884    |         |   |          | 1,511  |      |  |     | (41 | )%
|                                    |                                                      | Average realized prices including
    hedges ($/Bbl)(3) |                               | $      | 38.69  |         |   | $        | 26.88  |      |  |     | 44  | % 
|                                    |                                                      | Average realized prices excluding
    hedges ($/Bbl)(3) |                               | $      | 38.69  |         |   | $        | 26.87  |      |  |     | 44  | % 
|                                    |                                                      | Average transportation costs ($/Bbl)                    |                               | $      | 0.90   |         |   | $        | 1.30   |      |  |     | (31 | )%
|                                    | Total equivalent volumes (MMcfe)                     |                                                         |                               | 36,502 |        |         |   | 49,993   |        |      |  | (27 | )% 
|                                    | Production costs ($/Mcfe)                            |                                                         |                               |        |        |         |   |          |        |      |  |     |    
|                                    |                                                      | Average lease operating costs                           |                               | $      | 0.50   |         |   | $        | 0.37   |      |  |     | 35  | % 
|                                    |                                                      | Average production taxes                                |                               |        | 0.19   |         |   |          | 0.08   |      |  |     | 138 | % 
|                                    |                                                      |                                                         |                               |        |        |         |   |          |       
|                                    |                                                      |                                                         | Total production
    costs(1) |        | $      | 0.69    |   |          | $      | 0.45 |  |     |     | 53 | %
|                                    |                                                      |                                                         |                               |        |        |         |   |          |       
|                                    | Average general and administrative expenses ($/Mcfe) |                                                         | $                             | 0.64   |        |         | $ | 0.38     |        |      |  | 68  | %  
|                                    | Unit of production depletion cost ($/Mcfe)           |                                                         | $                             | 2.09   |        |         | $ | 1.72     |        |      |  | 22  | %  






|    |                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------
|(1) | Production costs include lease operating costs and production
    related taxes (including ad valorem and severance taxes).
|(2) | Transportation and net product costs are included in operating
    expenses on our consolidated statements of income.      
|(3) | Prices are stated before transportation costs.                                                                             

11



---



##### Table of Contents





|                                                  |                                                                |                             |   |     |           |   |   |       |    |      |        |   |   |  |   |     |     |  
|------------------------------------------------- | -------------------------------------------------------------- | --------------------------- | - | --- | --------- | - | - | ----- | -- | ---- | ------ | - | - |  | - | --- | --- | -
|                                                  |                                                                | Operating                   |   |     | Operating |   |   |       |    | EBIT |       
|                                                  |                                                                | Revenue                     |   |     | Expense   |   |   | Other |    |      | Impact |  
|                                                  |                                                                |                             |   |     |           |   |   |       |    |      |        |  
|                                                  |                                                                | Favorable/(Unfavorable)     |  
|                                                  |                                                                | (In millions)               |  
|Natural Gas Revenue                               |                                                                |                             |   |     |           |   |   |       |    |      |        |   |   |  |   |    
|                                                  | Higher prices in 2005                                          |                             | $ | 10  |           |   | $ |      |    |      | $      |  |   |  | $ | 10  |    
|                                                  | Lower production volumes in 2005                               |                             |   | (55 | )         |   |   |      |    |      |        |  |   |  |   | (55 | )  
|                                                  | Impact from hedge program in 2005 versus 2004                  |                             |   | (8  | )         |   |   |      |    |      |        |  |   |  |   | (8  | )  
|Oil, Condensate, and NGL Revenue                  |                                                                |                             |   |     |           |   |   |       |    |      |        |   |   |  |   |    
|                                                  | Higher prices in 2005                                          |                             |   | 11  |           |   |   |      |    |      |        |  |   |  |   | 11  |    
|                                                  | Lower production volumes in 2005                               |                             |   | (17 | )         |   |   |      |    |      |        |  |   |  |   | (17 | )  
|Depreciation, Depletion, and Amortization Expense |                                                                |                             |   |     |           |   |   |       |    |      |        |   |   |  |   |    
|                                                  | Higher depletion rate in 2005                                  |                             |   |    |           |   |   | (13   | )  |      |        |  |   |  |   | (13 | )  
|                                                  | Lower production volumes in 2005                               |                             |   |    |           |   |   | 23    |    |      |        |  |   |  |   | 23  |    
|                                                  | Non-full cost depreciation, depletion and amortization expense |                             |   |    |           |   |   | 1     |    |      |        |  |   |  |   | 1   |    
|Production Costs                                  |                                                                |                             |   |     |           |   |   |       |    |      |        |   |   |  |   |    
|                                                  | Lower lease operating costs in 2005                            |                             |   |    |           |   |   | 1     |    |      |        |  |   |  |   | 1   |    
|                                                  | Higher production taxes in 2005                                |                             |   |    |           |   |   | (3    | )  |      |        |  |   |  |   | (3  | )  
|Other                                             |                                                                |                             |   |     |           |   |   |       |    |      |        |   |   |  |   |    
|                                                  | Higher general and administrative costs in 2005                |                             |   |    |           |   |   | (5    | )  |      |        |  |   |  |   | (5  | )  
|                                                  | Employee severance charges in 2004                             |                             |   |    |           |   |   | 9     |    |      |        |  |   |  |   | 9   |    
|                                                  | Other                                                          |                             |   |    |           |   |   |      |    |      |        | 1 |   |  |   | 1   |    
|                                                  |                                                                |                             |   |     |           |   |   |       |    |      |        |  
|                                                  |                                                                | Total variance 2005 to 2004 |   | $   | (59       | ) |   | $     | 13 |      |        | $ | 1 |  |   | $   | (45 | )
|                                                  |                                                                |                             |   |     |           |   |   |       |    |      |        |  

Operating Revenues.


Depreciation, depletion, and amortization expense.


Production costs.


Other.


12



---



##### Table of Contents



Income Taxes


|                   |  |                     |    |   |      |   |    |  
|------------------ |  | ------------------- | -- | - | ---- | - | -- | -
|                   |  | Quarter Ended       |   
|                   |  | March 31,           |   
|                   |  |                     |   
|                   |  | 2005                |    |   | 2004 |  
|                   |  |                     |    |   |      |  
|                   |  | (In millions except |   
|                   |  | for rates)          |   
|Income taxes       |  | $                   | 2  |   |      | $ | 18 |  
|Effective tax rate |  |                     | 67 | % |      |   | 35 | %



Liquidity






Commitments and Contingencies




13



---



##### Table of Contents






CAUTIONARY STATEMENTS FOR PURPOSES OF THE SAFE
HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995











|        |                                                           
|------- | ----------------------------------------------------------
|Item 3. | Quantitative and Qualitative Disclosures About Market Risk



14



---



##### Table of Contents








|        |                        
|------- | -----------------------
|Item 4. | Controls and Procedures

Material Weakness Previously Disclosed




Evaluation of Disclosure Controls and Procedures






Changes in Internal Control Over Financial Reporting






| |   |                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Implemented automated and manual controls for our primary
    information technology financial system to monitor unauthorized
    password changes; and
|
| |  | Developed a segregation of duties matrix for our primary
    information technology financial system that documents existing
    role assignments.     



15



---



##### Table of Contents






PART II  OTHER INFORMATION





Item 1. Legal Proceedings







Item 2. Unregistered Sales of Equity Securities and
Use of Proceeds







Item 3. Defaults Upon Senior Securities







Item 4. Submission of Matters to a Vote of Security
Holders







Item 5. Other Information







Item 6. Exhibits






|        |      |    |             |                                                                                                            
|------- | ---- | -- | ----------- | -----------------------------------------------------------------------------------------------------------
|Exhibit |      |    |            
|Number  |      |    | Description
|        |      |    |            
|        | *31  | .A |             | Certification of Principal Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|        | *31  | .B |             | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.    
|        | **32 | .A |             | Certification of Principal Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.
|        | **32 | .B |             | Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.    





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | We hereby undertake, pursuant to Regulation S-K,
    Item 601(b), paragraph (4)(iii), to furnish to the
    U.S. Securities and Exchange Commission, upon request, all
    constituent instruments defining the rights of holders of our
    long-term debt not filed herewith for the reason that the total
    amount of securities authorized under any of such instruments
    does not exceed 10 percent of our total consolidated assets.

16



---



##### Table of Contents






SIGNATURES






| |                                   
| | ----------------------------------
| | EL PASO PRODUCTION HOLDING COMPANY



| |                              
| | -----------------------------
| | /s/ D. MARK LELAND           
| |                              
| | D. Mark Leland               
| | Executive Vice President and 
| | Chief Financial Officer      
| | (Principal Financial Officer)



| |                               
| | ------------------------------
| | /s/ GENE T. WAGUESPACK        
| |                               
| | Gene T. Waguespack            
| | Senior Vice President,        
| | Treasurer and Controller      
| | (Principal Accounting Officer)

17



---



##### Table of Contents



EL PASO PRODUCTION HOLDING COMPANY


EXHIBIT INDEX




|        |      |    |             |                                                                                                            
|------- | ---- | -- | ----------- | -----------------------------------------------------------------------------------------------------------
|Exhibit |      |    |            
|Number  |      |    | Description
|        |      |    |            
|        | *31  | .A |             | Certification of Principal Executive Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.
|        | *31  | .B |             | Certification of Chief Financial Officer pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002.    
|        | **32 | .A |             | Certification of Principal Executive Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.
|        | **32 | .B |             | Certification of Chief Financial Officer pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.