##### Table of Contents



UNITED
    STATES SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
      Form 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended
    March 31, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to          .   Commission File Number 1-14365
  El Paso
    Corporation
 (Exact Name of Registrant as
    Specified in Its Charter)
   Delaware

76-0568816(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)   El Paso Building
    1001 Louisiana Street
    Houston, Texas

77002(Zip Code)(Address of Principal Executive
    Offices)   Telephone Number: (713) 420-2600
 Internet Website: www.elpaso.com
  þ o
  Rule 12b-2
 þ o o
  Rule 12b-2 o þ
  Indicate the number of shares outstanding of each of the
    registrants classes of common stock, as of the latest
    practicable date.




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##### 



EL PASO
    CORPORATION
    TABLE OF CONTENTS
  Caption



PagePART I 
    FINANCIAL INFORMATIONItem 1.


Financial Statements


1Item 2.


Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations


22Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


40Item 4.


Controls and
    Procedures


41PART II 
    OTHER INFORMATIONItem 1.


Legal
    Proceedings


42Item 1A.


Risk
    Factors


42Cautionary
    Statements for Purposes of the Safe Harbor
    Provisions of the Private Securities Litigation Reform Act of
    1995


42Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


42Item 3.


Defaults Upon
    Senior Securities


42Item 4.


Submission of
    Matters to a Vote of Security Holders


42Item 5.


Other
    Information


43Item 6.


Exhibits


43Signatures


44Ratio of Earnings to Combined Fixed ChargesCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906      /d

= per day

Mcfe

= thousand cubic feet of natural
    gas equivalentsBbl

= barrels

MMBtu

= million British thermal unitsBBtu

= billion British thermal units

MMcf

= million cubic feetLNG

= liquefied natural gas

MMcfe

= million cubic feet of natural
    gas equivalentsMBbls

= thousand barrels

NGL

= natural gas liquidsMcf

= thousand cubic feet

TBtu

= trillion British thermal units     and/or
 i




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##### Table of Contents



PART
    I  FINANCIAL INFORMATION Item 1.  Financial
    Statements  EL PASO
    CORPORATION
  CONDENSED
    CONSOLIDATED STATEMENTS OF INCOME
 (In millions, except per common share amounts)
    (Unaudited)
  Quarters Ended March 31,2007


2006Operating revenues

$
1,022


$
1,337Operating expensesCost of products and services


55



62Operation and maintenance


301



285Depreciation, depletion and
    amortization


271



250Taxes, other than income taxes


60



57687



654Operating income


335



683Earnings from unconsolidated
    affiliates


37



29Loss on debt extinguishment


(201
)


(6
)Other income, net


45



50Interest and debt expense


(283
)


(331
)Income (loss) before income taxes
    from continuing operations


(67
)


425Income taxes


(19
)


124Income (loss) from continuing
    operations


(48
)


301Discontinued operations, net of
    income taxes


677



55Net income


629



356Preferred stock dividends


9



10Net income available to common
    stockholders

$
620


$
346Basic earnings (loss) per common
    shareIncome (loss) from continuing
    operations

$
(0.08
)

$
0.44Discontinued operations, net of
    income taxes


0.97



0.09Net income per common share

$
0.89


$
0.53Diluted earnings (loss) per common
    shareIncome (loss) from continuing
    operations

$
(0.08
)

$
0.42Discontinued operations, net of
    income taxes


0.97



0.07Net income per common share

$
0.89


$
0.49Dividends declared per common share

$
0.04


$
0.04    1




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##### Table of Contents



EL PASO
    CORPORATION
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
 (In millions, except share amounts)
    (Unaudited)
  March 31,


December 31,2007


2006ASSETSCurrent assetsCash and cash equivalents

$
232


$
537Accounts and notes receivableCustomer, net of allowance of $21
    in 2007 and $28 in 2006


475



516Affiliates


197



192Other


482



495Assets from price risk management
    activities


96



436Assets held for sale and from
    discontinued operations






4,161Deferred income taxes


345



478Other


414



352Total current assets


2,241



7,167Property, plant and equipment, at
    costPipelines


15,789



15,672Natural gas and oil properties, at
    full cost


17,098



16,572Other


562



56633,449



32,810Less accumulated depreciation,
    depletion and amortization


16,243



16,132Total property, plant and
    equipment, net


17,206



16,678Other assetsInvestments in unconsolidated
    affiliates


1,671



1,707Assets from price risk management
    activities


214



414Other


1,331



1,2953,216



3,416Total assets

$
22,663


$
27,261    2




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##### Table of Contents



EL PASO
    CORPORATION
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
 (In millions, except share amounts)
    (Unaudited)
  March 31,


December 31,2007


2006LIABILITIES AND STOCKHOLDERS
    EQUITYCurrent liabilitiesAccounts payableTrade

$
367


$
478Affiliates


2



3Other


552



569Current maturities of long-term
    financing obligations


403



1,360Liabilities from price risk
    management activities


338



278Liabilities related to
    discontinued operations






1,817Accrued interest


233



269Other


1,074



1,377Total current liabilities


2,969



6,151Long-term financing obligations,
    less current maturities


11,263



13,329OtherLiabilities from price risk
    management activities


947



924Deferred income taxes


1,047



950Other


1,718



1,6903,712



3,564Commitments and contingenciesSecurities of subsidiaries


22



31Stockholders equityPreferred stock, par value
    $0.01 per share; authorized 50,000,000 shares; issued
    750,000 shares of 4.99% convertible perpetual stock;
    stated at liquidation value


750



750Common stock, par value
    $3 per share; authorized 1,500,000,000 shares; issued
    706,100,142 shares in 2007 and 705,833,206 shares in
    2006


2,118



2,118Additional paid-in capital


4,769



4,804Accumulated deficit


(2,315
)


(2,940
)Accumulated other comprehensive
    loss


(446
)


(343
)Treasury stock (at cost);
    7,771,602 shares in 2007 and 8,715,288 shares in 2006


(179
)


(203
)Total stockholders equity


4,697



4,186Total liabilities and
    stockholders equity

$
22,663


$
27,261    3




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##### Table of Contents



EL PASO
    CORPORATION
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In millions)
    (Unaudited)
  Quarters Ended March 31,2007


2006Cash flows from operating
    activitiesNet income

$
629


$
356Less income from discontinued
    operations, net of income taxes


677



55Net income (loss) before
    discontinued operations


(48
)


301Adjustments to reconcile net
    income to net cash from operating activitiesDepreciation, depletion and
    amortization


271



250Deferred income tax expense
    (benefit)


(18
)


121Earnings from unconsolidated
    affiliates, adjusted for cash distributions


37



9Loss on debt extinguishment


201



6Other


(2
)


15Asset and liability changes


(93
)


160Cash provided by continuing
    activities


348



862Cash provided by (used in)
    discontinued activities


(35
)


89Net cash provided by operating
    activities


313



951Cash flows from investing
    activitiesCapital expenditures


(783
)


(373
)Net proceeds from the sale of
    assets and investments


38



59Other


2



22Cash used in continuing activities


(743
)


(292
)Cash provided by (used in)
    discontinued activities


3,678



(28
)Net cash provided by (used in)
    investing activities


2,935



(320
)Cash flows from financing
    activitiesNet proceeds from issuance of
    long-term debt


1,424



Payments to retire long-term debt
    and other financing obligations


(4,654
)


(946
)Dividends paid


(37
)


(36
)Contributions from discontinued
    operations


3,360



59Other


(3
)


Cash provided by (used in)
    continuing activities


90



(923
)Cash used in discontinued
    activities


(3,643
)


(61
)Net cash used in financing
    activities


(3,553
)


(984
)Change in cash and cash equivalents


(305
)


(353
)Cash and cash equivalentsBeginning of period


537



2,132End of period

$
232


$
1,779    4




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##### Table of Contents



EL PASO
    CORPORATION
  CONDENSED
    CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 (In millions)
    (Unaudited)
  Quarters Ended March 31,2007


2006Net income

$
629


$
356Foreign currency translation
    adjustments (net of income tax of less than $1 in 2006)






3Net reclassification adjustments
    associated with pension and other postretirement obligations
    (net of income tax of $3 in 2007)


6



Net gains (losses) from cash flow
    hedging activities:Unrealized
    mark-to-market
    gains (losses) arising during period (net of income tax of $47
    in 2007 and $76 in 2006)


(83
)


131Reclassification adjustments for
    changes in initial value to settlement date (net of income tax
    of $15 in 2007 and $11 in 2006)


(25
)


20Net unrealized gains arising
    during period associated with investments available for sale
    (net of income tax of $2 in 2007 and $8 in 2006)


3



15Other comprehensive income (loss)


(99
)


169Comprehensive income

$
530


$
525    5




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##### Table of Contents



EL PASO
    CORPORATION
  NOTES TO
    CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 (Unaudited)
  1.
    Basis of
    Presentation and Significant Accounting Policies  Basis of
    Presentation
  Form 10-Q Form 10-Q Form 10-K, Form 10-K.
  Significant
    Accounting Policies
  Form 10-K.
  Accounting for Uncertainty in Income Taxes. Accounting for
    Uncertainty in Income Taxes Accounting for Income Taxes,
  Accounting for Offsetting Contractual
    Amounts. FIN 39-1. Offsetting of
    Amounts Related to Certain Contracts
  2.
    Divestitures  Accounting for the Impairment
    or Disposal of Long-Lived Assets
 6




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##### Table of Contents



Form 10-K.
  ANR and Related Operations.
  International Power Operations.
    ANR and


InternationalRelated


PowerOperations


Operations


Total(In millions)Quarter Ended March 31,
    2007Revenues

$
101


$



$
101Costs and expenses


(43
)






(43
)Other
    expense(1)


(7
)






(7
)Interest and debt expense


(10
)






(10
)Income taxes


(15
)






(15
)Income from operations


26







26Gain on sale, net of income taxes
    of $356 million


651







651Net income from discontinued
    operations

$
677


$



$
677Quarter Ended March 31,
    2006Revenues

$
194


$
50


$
244Costs and expenses


(77
)


(65
)


(142
)Other income


15







15Interest and debt expense


(17
)


(7
)


(24
)Income taxes


(41
)


3



(38
)Net income (loss) from
    discontinued operations

$
74


$
(19
)

$
55     (1)
    
    Includes a loss of approximately
    $19 million associated with the extinguishment of certain
    debt obligations.  3.
    Income
    Taxes    2007


2006(In millions, except rates)Income taxes

$
(19
)

$
124Effective tax rate


28
%


29
%   year-to-date
 7




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##### Table of Contents



non-U.S. income
     8




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##### Table of Contents



4.
    Earnings
    Per Share    2007


2006Basic


Diluted


Basic


Diluted(In millions, except per share amounts)Income (loss) from continuing
    operations

$
(48
)

$
(48
)

$
301


$
301Convertible preferred stock
    dividends


(9
)


(9
)


(10
)


Interest on trust preferred
    securities














2Income (loss) from continuing
    operations available to common stockholders


(57
)


(57
)


291



303Discontinued operations, net of
    income taxes


677



677



55



55Net income available to common
    stockholders

$
620


$
620


$
346


$
358Weighted average common shares
    outstanding


694



694



656



656Effect of dilutive securities:Options and restricted stock














3Convertible preferred stock














57Trust preferred securities














8Weighted average common shares
    outstanding and dilutive securities


694



694



656



724Earnings per common share:Income (loss) from continuing
    operations

$
(0.08
)

$
(0.08
)

$
0.44


$
0.42Discontinued operations, net of
    income taxes


0.97



0.97



0.09



0.07Net income

$
0.89


$
0.89


$
0.53


$
0.49   Form 10-K.
 9




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##### Table of Contents



5.
    Price
    Risk Management Activities    March 31,


December 31,2007


2006(In millions)Net assets (liabilities):Derivatives designated as
    accounting hedges

$
(86
)

$
61Other commodity-based derivative
    contracts(1)


(932
)


(456
)Total commodity-based derivatives


(1,018
)


(395
)Interest rate and foreign currency
    derivatives


43



43Net liabilities from price risk
    management activities

$
(975
)

$
(352
)     (1)
    
    During the first quarter of 2007,
    we settled contracts associated with approximately
    $381 million of our assets from price risk management
    activities by applying the related cash margin we held against
    amounts due under those contracts. This non-cash transaction is
    not reflected in our statement of cash flows.  6.
    Long-Term
    Financing Obligations and Other Credit Facilities  March 31,


December 31,2007


2006(In millions)Current maturities of long-term
    financing obligations

$
403


$
1,360Long-term financing obligations


11,263



13,329Total

$
11,666


$
14,689  10




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##### Table of Contents



Changes in Long-Term Financing
    Obligations.
  CashBook Value


Received /Company

Interest Rate

Increase (Decrease)


(Paid)IssuancesEl Paso Exploration and
    Production Company (EPEP) revolving credit facility

variable

$
255


$
255El Paso revolving credit
    facility

variable


675



675Southern Natural Gas (SNG) notes

5.900%


500



494Increases through
    March 31, 2007



$
1,430


$
1,424Repayments, repurchases, and
    otherNotes/OtherEl Paso

6.375%-10.75%

$
(2,837
)

$
(3,011
)El Paso - Euro

7.125%


(157
)


(165
)SNG

6.700%


(52
)


(52
)SNG

8.875%


(398
)


(418
)Other

various


(9
)


(8
)(3,453
)


(3,654
)Revolving Credit
    FacilitiesEPEP

variable


(200
)


(200
)El Paso

variable


(800
)


(800
)(1,000
)


(1,000
)Decreases through
    March 31, 2007



$
(4,453
)

$
(4,654
)         Credit
    Facilities
  Credit Agreements.
 11




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##### Table of Contents



Contingent Letter of Credit Facility.
  Letters of Credit.
  7.
    Commitments
    and Contingencies  Legal
    Proceedings
  Shareholder Litigation.
  ERISA Class Action Suits. William H.
    Lewis, III v. El Paso Corporation,
    et al.
  Cash Balance Plan Lawsuit. Tomlinson,
    et al. v. El Paso Corporation and El Paso
    Corporation Pension Plan
  Retiree Medical Benefits Matters. Yolton
    et al. v. El Paso Tennessee Pipeline Co. and Case
    Corporation.
 12




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##### Table of Contents



Natural Gas Commodities Litigation. In re: Gas Commodity
    Litigation. In re: Western States Wholesale Natural Gas
    Antitrust Litigation Leggett, et al. v. Duke
    Energy Corporation, et al. Ever-Bloom Inc. v. AEP
    Energy Services Inc., et al. Farmland Industries, Inc. v. Oneok Inc. Learjet, Inc. v. Oneok Inc., Breckenridge,
    et al. v. Oneok Inc., et al. Missouri
    Public Service Commission v. El Paso Corporation,
    et al. Arandell,
    et al. v. Xcel Energy, et al. Heartland, et al. v. Oneok Inc.,
    et al. Leggett Farmland Arandell Missouri Public Service Heartland
  Gas Measurement Cases. and/or In re: Natural Gas Royalties Qui Tam Litigation,
  Will Price, et al. v. Gas Pipelines and
    Their Predecessors, et al.,
  MTBE.
 13




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##### Table of Contents



Government
    Investigations and Inquiries
  Reserve Revisions.
  Iraq Oil Sales.
  Other Government Investigations.
  Other
    Contingencies
  EPNG Rate Case.
  Iraq Imports.
  Navajo Nation. rights-of-way rights-of-way rights-of-way
  and/or
 14




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##### Table of Contents



Environmental
    Matters
      March 31, 2007Sites

Expected


High(In millions)Operating

$
28


$
34Non-operating


233



423Superfund


34



59Total

$
295


$
516     Balance as of January 1, 2007

$
314Additions/adjustments for
    remediation activities


8Payments for remediation activities


(27
)Balance as of March 31, 2007

$
295   clean-up
  CERCLA Matters.
 15




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##### Table of Contents



clean-up
    Guarantees
    and Indemnifications
      Retiree Medical
    Benefits Matters
 16




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##### Table of Contents



8.
    Retirement
    Benefits    OtherPostretirementPension Benefits


Benefits2007


2006


2007


2006(In millions)Service cost

$
5


$
4


$



$
Interest cost


30



29



6



7Expected return on plan assets


(45
)


(44
)


(4
)


(4
)Amortization of net actuarial loss


10



14







Amortization of prior service
    cost(1)


(1
)










Special termination
    benefits(2)


6











Net benefit cost

$
5


$
3


$
2


$
3     (1)
    
    As permitted, the amortization of
    any prior service cost is determined using a straight-line
    amortization of the cost over the average remaining service
    period of employees expected to receive benefits under the plan.(2)
    
    Relates to providing enhanced
    benefits to former ANR employees, which is included in
    discontinued operations in our income statement.  Employers Accounting for
    Defined Benefit Pension and Other Postretirement
    Plans  an amendment of FASB
    Statements No. 87, 88, 106 and 132(R) Employers Accounting for Postretirement Benefits Other
    Than Pensions
    9.
    Stockholders
    Equity  Dividends.
  ConvertibleCommon Stock

Preferred Stock($0.04/Share)

(4.99%/Year)Amount paid through March 31,
    2007

$28

$9Amount paid in April 2007

$27

$9Declared subsequent to
    March 31, 2007:Date of declaration

April 3, 2007

April 3, 2007Date payable

July 2, 2007

July 2, 2007Payable to shareholders on record

June 1, 2007

June 15, 2007  17




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##### Table of Contents



paid-in-capital
    10.
    Business
    Segment Information    Pipelines.
  Exploration and Production.
  Marketing.
  Power.
    2007


2006(In millions)Segment EBIT

$
426


$
756Corporate and other


(210
)


Interest and debt expense


(283
)


(331
)Income taxes


19



(124
)Income (loss) from continuing
    operations

$
(48
)

$
301  18




---



##### Table of Contents



SegmentExploration and








CorporatePipelines


Production


Marketing


Power


and
    Other(1)


Total(In millions)2007Revenue from external customers

$
631


$
220
(2)

$
159


$



$
12


$
1,022Intersegment revenue


13



285
(2)


(294
)






(4
)


Operation and maintenance


161



110







4



26



301Depreciation, depletion, and
    amortization


94



170



1







6



271Earnings (losses) from
    unconsolidated affiliates


26



(1
)






11



1



37EBIT


364



179



(135
)


18



(210
)


2162006Revenue from external customers

$
629


$
81
(2)

$
598


$
1


$
28


$
1,337Intersegment revenue


14



385
(2)


(393
)






(6
)


Operation and maintenance


168



88



3



14



12



285Depreciation, depletion, and
    amortization


93



146



1







10



250Earnings (losses) from
    unconsolidated affiliates


16



7







7



(1
)


29EBIT


346



199



208



3







756     (1)
    
    Includes eliminations of
    intercompany transactions. Our intersegment revenues, along with
    our intersegment operating expenses, were incurred in the normal
    course of business between our operating segments. During the
    quarters ended March 31, 2007 and 2006, we recorded an
    intersegment revenue elimination of $5 million and
    $6 million.(2)
    
    Revenues from external customers
    include gains and losses related to our hedging of price risk
    associated with our natural gas and oil production. Intersegment
    revenues represent sales to our Marketing segment, which is
    responsible for marketing our production.    March 31,


December 31,2007


2006(In millions)Pipelines

$
13,171


$
13,105Exploration and Production


6,422



6,262Marketing and Trading


727



1,143Power


630



618Total segment assets


20,950



21,128Corporate


1,713



2,000Discontinued operations






4,133Total consolidated assets

$
22,663


$
27,261   11.
    Investments
    in, Earnings from and Transactions with Unconsolidated
    Affiliates   19




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##### Table of Contents



Earnings(Losses) fromUnconsolidatedAffiliatesNet investment and earnings
    (losses)

Investment


Quarter EndedMarch 31,


December 31,


March 31,2007


2006


2007


2006(In millions)


(In millions)Domestic:Four
    Star(1)

$
703


$
723


$
(1
)

$
7Citrus


571



597



22



10Other


38



36







Foreign:Bolivia to Brazil Pipeline


108



105



3



1Manaus/Rio
    Negro(2)


93



96



4



6Porto
    Velho(3)


(32
)


(34
)


2



(3
)Asian and Central American
    Investments(3)(4)


27



27







1Other(3)


163



157



7



7Total

$
1,671


$
1,707


$
37


$
29     (1)
    
    Amortization of our purchase cost
    in excess of the underlying net assets of Four Star was
    $14 million during each of the quarters ended
    March 31, 2007 and 2006. For a further discussion, see our
    2006 Annual Report on
    Form 10-K.(2)
    
    We will transfer ownership of these
    plants to the power purchaser in January 2008.(3)
    
    As of March 31, 2007 and
    December 31, 2006, we had outstanding advances and notes
    receivable of $381 million and $380 million related to
    our foreign investments of which $360 million and
    $350 million related to our investment in Porto Velho. We
    recognized interest income on these outstanding advances and
    notes receivable of approximately $12 million and
    $11 million for the three months ended March 31, 2007
    and 2006.(4)
    
    We have received approval from our
    Board of Directors to sell our interest in these investments,
    all of which are expected to be sold in 2007.  Summarized financial
    information

Quarter Ended March 31,2007


2006(In millions)Operating results data:Operating revenues

$
189


$
305Operating expenses


111



263Income (loss) from continuing
    operations


51



(19
)Net income
    (loss)(1)


51



(19
)     (1)
    
    Includes net income of
    $5 million for each of the quarters ended March 31,
    2007 and 2006, related to our proportionate share of affiliates
    in which we hold greater than a 50 percent interest.  Quarter EndedRevenues and charges with
    unconsolidated affiliates

March 31,2007


2006(In millions)Operating
    revenue(1)

$
1


$
34Other income


1



2Interest income


12



11     (1)
    
    Decrease primarily due to the sale
    of investments in our Power segment. 20




---



##### Table of Contents



Matters
    that Could Impact Our Investments
    Porto Velho.
  Asian and Central American power
    investments.
  Investment in Bolivia.
  Investment in Argentina.
 21




---



##### Table of Contents



Item 2.
    Managements
    Discussion And Analysis Of Financial Condition And Results Of
    Operations  Form 10-K, Form 10-Q.
  Overview
  Financial Update.
    What to Expect Going Forward.
   22




---



##### Table of Contents



Segment
    Results
      2007


2006(In millions)SegmentPipelines

$
364


$
346Exploration and Production


179



199Marketing


(135
)


208Power


18



3Segment EBIT


426



756Corporate and other


(210
)


Consolidated EBIT


216



756Interest and debt expense


(283
)


(331
)Income taxes


19



(124
)Income (loss) from continuing
    operations


(48
)


301Discontinued operations, net of
    income taxes


677



55Net income

$
629


$
356  23




---



##### Table of Contents



Pipelines
    Segment
  Operating Results.
  2007


2006(In millions, except volume amounts)Operating revenues

$
644


$
643Operating expenses


(320
)


(322
)Operating income


324



321Other income


40



25EBIT

$
364


$
346Throughput volumes
    (BBtu/d)(1)


18,040



16,620     (1)
    
    Throughput volumes include volumes
    associated with our proportionate share of unconsolidated
    affiliates.  Quarter Ended March 31,VarianceRevenue


Expense


Other


EBITImpact


Impact


Impact


ImpactFavorable/(Unfavorable)(In millions)Expansions

$
8


$
(1
)

$
2


$
9Lower reservation and usage
    revenues


(6
)










(6
)Operational gas and revaluations






(10
)






(10
)Hurricanes Katrina and Rita






6







6Gain on sale of asset in 2007






7







7Equity earnings from Citrus










12



12Other(1)


(1
)






1



Total impact on EBIT

$
1


$
2


$
15


$
18     (1)
    
    Consists of individually
    insignificant items on several of our pipeline systems.  Expansions.
    Lower Reservation and Usage Revenues.
  Operational Gas and Revaluations.
 24




---



##### Table of Contents



Hurricanes Katrina and Rita.
  Gain on sale of asset.
  Equity earnings from Citrus.
  Regulatory Matters/Rate Cases.
  
    EPNG  In December 2006, EPNG filed a
    settlement of its rate case with the FERC providing benefits for
    both EPNG and its customers for a three year period ending
    December 31, 2008. Under the terms of the settlement, EPNG
    is required to file a new rate case effective January 1,
    2009. EPNGs recorded income amounts currently reflect
    their proposed rates and we have reserved sufficient amounts to
    meet EPNGs refund obligations under this settlement. For a
    further discussion, see Item 1, Financial Statements,
    Note 7.
    Mojave Pipeline (MPC)  In February 2007, as
    required by its prior rate case settlement, MPC filed with the
    FERC a general rate case proposing a 33 percent decrease in
    its base tariff rates resulting from a variety of factors,
    including a decline in rate base and various changes in rate
    design since the last rate case. No new services were proposed.
    We anticipate a decrease in revenues of approximately
    $13 million annually due to Mojaves reduced base
    rates. The new base rates were effective March 1, 2007 and
    are subject to further adjustment upon the outcome of the
    hearing. 25




---



##### Table of Contents



Exploration
    and Production Segment
  Overview
    and Strategy
  Form 10-K.
  Operating
    Results for the Quarter Ended March 31, 2007
  Average Daily Production.
  2007


2006(MMcfe/d)United StatesOnshore


363



334Texas Gulf Coast


189



195Gulf of Mexico Shelf/south
    Louisiana


182



133InternationalBrazil


16



32Total Consolidated


750



694Four
    Star(1)


70



71     (1)
    
    Amounts represent our proportionate
    share of the production of Four Star.   26




---



##### Table of Contents



Drilling
  Onshore.
  Texas Gulf Coast.
  Gulf of Mexico Shelf and south Louisiana.
  Brazil.
  Egypt.
  Cash Operating Costs.
  Capital Expenditures.
  Outlook
    
    Average daily production volumes of approximately
    740 MMcfe/d to 795 MMcfe/d, which excludes
    approximately 60 MMcfe/d to 65 MMcfe/d from our equity
    investment in Four Star.
    Capital expenditures, excluding acquisitions, between
    $1.4 billion and $1.5 billion. While 85% of the
    planned 2007 capital program is allocated to our domestic
    program, we plan to invest approximately $215 million
    internationally during 2007, primarily in our Brazil exploration
    and development program.
    Average cash operating costs which include production costs,
    general and administrative expenses and taxes (other than
    production and income) of approximately $1.68/Mcfe to
    $2.00/Mcfe; and
    Depreciation, depletion, and amortization rate between
    $2.50/Mcfe and $2.75/Mcfe. 27




---



##### Table of Contents



Price
    Risk Management Activities
      Fixed Price








BasisSwaps(1)


Floors(1)


Ceilings(1)


Swaps(1)(2)Volumes


Price


Volumes


Price


Volumes


Price


VolumesNatural Gas2007


59


$
7.71



41


$
8.00



41


$
16.89



832008


5


$
3.42



44


$
8.00



44


$
10.53



2009


5


$
3.56



















2010-2012


11


$
3.81



















Oil2007


144


$
35.15



















     (1)
    
    Volumes presented are TBtu for
    natural gas and MBbl for oil. Prices presented are per MMBtu of
    natural gas and per Bbl of oil.(2)
    
    Our basis swaps effectively
    lock-in locational price differences on a portion of
    our natural gas production in Texas and Oklahoma.     28




---



##### Table of Contents



Financial
    Results and Variance Analysis
    2007


2006(In millions)Operating Revenues:Natural gas

$
408


$
366Oil, condensate and NGL


88



90Other


9



10Total operating revenues


505



466Operating Expenses:Depreciation, depletion and
    amortization


(170
)


(146
)Production
    costs(1)


(86
)


(64
)Cost of products and services


(24
)


(22
)General and administrative expenses


(46
)


(42
)Taxes, other than production and
    income


(2
)


(1
)Total operating expenses


(328
)


(275
)Operating income


177



191Other
    income(2)


2



8EBIT

$
179


$
199     (1)
    
    Production costs include lease
    operating costs and production related taxes (including ad
    valorem and severance taxes).(2)
    
    Includes equity earnings from our
    investment in Four Star.  29




---



##### Table of Contents



Percent2007


2006


VarianceConsolidated volumes, prices
    and costs per unit:Natural gasVolumes (MMcf)


56,713



52,029



9
%Prices ($/Mcf)Average realized prices including
    hedges

$
7.19


$
7.03



2
%Average realized prices excluding
    hedges

$
6.46


$
7.77



(17
)%Average transportation costs
    ($/Mcf)

$
0.31


$
0.24



29
%Oil, condensate and NGLVolumes (MBbls)


1,788



1,745



2
%Prices ($/Bbl)Average realized prices including
    hedges

$
49.32


$
51.25



(4
)%Average realized prices excluding
    hedges

$
50.07


$
52.60



(5
)%Average transportation costs
    ($/Bbl)

$
0.76


$
1.25



(39
)%Total equivalent volumesMMcfe


67,442



62,500



8
%MMcfe/d


750



694



8
%Production costs and other cash
    operating costs ($/Mcfe)Average lease operating costs

$
0.95


$
0.73



30
%Average production taxes


0.32



0.29



10
%Total production
    costs(1)


1.27



1.02



25
%Average general and administrative
    expenses


0.69



0.67



3
%Average taxes, other than
    production and income


0.03



0.02



50
%Total cash operating costs

$
1.99


$
1.71



16
%Unit of production depletion cost
    ($/Mcfe)

$
2.40


$
2.20



9
%Unconsolidated affiliate
    volumes (Four Star)Natural gas (MMcf)


4,941



4,507Oil, condensate and NGL (MBbls)


233



309Total equivalent volumesMMcfe


6,338



6,360MMcfe/d


70



71     (1)
    
    Production costs include lease
    operating costs and production related taxes (including ad
    valorem and severance taxes). 30




---



##### Table of Contents



Quarter
    Ended March 31, 2007 Compared to Quarter Ended
    March 31, 2006
    VariancesOperating


OperatingRevenues


Expenses


Other


EBITFavorable/(Unfavorable)(In millions)Natural Gas RevenuesLower realized prices in 2007

$
(74
)

$



$



$
(74
)Impact of hedges


80











80Higher production volumes in 2007


36











36Oil, Condensate and NGL
    RevenuesLower realized prices in 2007


(5
)










(5
)Impact of hedges


1











1Higher production volumes in 2007


2











2Other RevenuesChange in fair value of
    derivatives not designated as accounting hedges


2











2Other


(3
)










(3
)Depreciation, Depletion and
    Amortization ExpenseHigher depletion rate in 2007






(13
)






(13
)Higher production volumes in 2007






(11
)






(11
)Production CostsHigher lease operating costs in
    2007






(18
)






(18
)Higher production taxes in 2007






(4
)






(4
)General and Administrative
    Expenses






(4
)






(4
)Other






(3
)


(6
)


(9
)Total Variances

$
39


$
(53
)

$
(6
)

$
(20
)   Operating revenues.
  Depreciation, depletion and amortization
    expense.
  Production costs.
  General and administrative expenses.
  Other.
 31




---



##### Table of Contents



Marketing
    Segment
  Overview. Form 10-K.
  Operating Results. mark-to-market
  2007


2006(In millions)Gross Margin by Significant
    Contract Type:Production-Related Natural Gas
    and Oil Derivative
    ContractsChanges in fair value of
    derivatives

$
(87
)

$
162Gross margin


(87
)


162Contracts Related to Historical
    Trading Operations:Natural gas transportation-related
    natural gas contracts:Demand charges


(27
)


(35
)Settlements


20



20Changes in fair value of other
    natural gas derivative contracts


(24
)


47Changes in fair value of power
    contracts


(17
)


11Gross
    margin(1)


(48
)


43Total gross margin


(135
)


205Operating expenses


(1
)


(5
)Operating income (loss)


(136
)


200Other income, net


1



8EBIT

$
(135
)

$
208     (1)
    
    Gross margin consists of revenues
    from commodity marketing activities less costs of commodities
    sold, including changes in the fair value of derivative
    contracts.  Production-related
    Natural Gas and Oil Derivative Contracts
  Options and swaps.
 32




---



##### Table of Contents



marked-to-market
  Floors(1)


Ceilings(1)Average





AverageVolumes


Price


Volumes


PriceNatural Gas2007


67


$
7.50






$
2008


18


$
6.00



18


$
10.002009


17


$
6.00



17


$
8.75Oil2007


744


$
55.00



744


$
59.862008


930


$
55.00



930


$
57.03     (1)
    
    Volumes presented are TBtu for
    natural gas and MBbl for oil. Prices presented are per MMBtu of
    natural gas and per Bbl of oil.    Contracts
    Related to Historical Trading Operations
  Natural gas transportation-related
    contracts. Form 10-K.
  2007


2006Alliance:Demand charges

$
16


$
16Recovery


48
%


19
%Other:Demand charges

$
11


$
19Recovery


100
%


87
%   Other natural gas derivative contracts.
  Power Contracts.
 33




---



##### Table of Contents



Power
    Segment
    Area

AmountBrazilPorto Velho

$
329Manaus & Rio Negro


95Pipeline projects


145Asia & Central
    America


93Total investment, guarantees and
    letters of credit

$
662   Brazil. Form 10-K.
  Asia and Central America.
  Operating Results.
 34




---



##### Table of Contents



Corporate
    and Other Expenses, Net
    2007


2006(In millions)Loss on extinguishment of debt

$
(201
)

$
(6
)Foreign currency fluctuations on
    Euro-denominated debt


(2
)


(4
)Change in litigation, insurance
    and other reserves


(28
)


(22
)Other, primarily interest income


21



32Total EBIT

$
(210
)

$
   Extinguishment of debt.
  Litigation, Insurance, and Other Reserves.
  Interest
    and Debt Expense
    Income
    Taxes
  Quarter Ended March 31,2007


2006(In millions)Income taxes from continuing
    operations

$
(19
)

$
124Effective tax rate


28
%


29
%     Discontinued
    Operations
    Commitments
    and Contingencies
   35




---



##### Table of Contents



Liquidity
    and Capital Resources
  Sources and Uses of Cash.
  Overview of Cash Flow Activities.
  Quarter Ended March 31,2007


2006(In billions)Cash Flow from
    OperationsContinuing operating
    activitiesNet income before discontinued
    operations

$



$
0.3Loss on debt extinguishment


0.2



Other income adjustments


0.3



0.4Change in other assets and
    liabilities


(0.1
)


0.2Total cash flow from operations

$
0.4


$
0.9Other Cash InflowsContinuing investing
    activitiesNet proceeds from the sale of
    assets and investments

$



$
0.1



0.1Continuing financing
    activitiesNet proceeds from the issuance of
    long-term debt


1.4



Contribution from discontinued
    operations


3.4



Total other cash inflows

$
4.8


$
0.1Cash OutflowsContinuing investing
    activitiesCapital expenditures

$
0.8


$
0.40.8



0.4Continuing financing
    activitiesPayments to retire long-term debt
    and other financing obligations


4.7



0.9Dividends and other






0.14.7



1.0Total cash outflows

$
5.5


$
1.4Net change in cash

$
(0.3
)

$
(0.4
)  36




---



##### Table of Contents



(In billions)Operating cash flow from
    discontinued operations

$
Proceeds from sale of ANR and
    related assets


3.7Payments to retire ANR debt
    obligations


(0.3
)Contribution from discontinued
    operations

$
3.4     Quarter EndedMarch 31, 2007


2007 Remaining


TotalMaintenancePipelines

$
0.1


$
0.3


$
0.4Exploration and Production


0.4



0.8



1.2GrowthPipelines


0.1



0.5



0.6Exploration and Production


0.2



0.3



0.5$
0.8


$
1.9


$
2.7     Liquidity/Cash Flow Outlook.
  Factors That Could Impact Our Future
    Liquidity. Form 10-K.
 37




---



##### Table of Contents



Price Risk Management Activities and Cash Margining
    Requirements.
  Fixed Price














BasisSwaps(1)


Floors(1)


Ceilings(1)


Swaps(1)(2)Volumes


Price


Volumes


Price


Volumes


Price


VolumesNatural Gas2007


59


$
7.71



108


$
7.69



41


$
16.89



832008


5


$
3.42



62


$
7.42



62


$
10.38



2009


5


$
3.56



17


$
6.00



17


$
8.75



2010-2012


11


$
3.81



















Oil2007


144


$
35.15



744


$
55.00



744


$
59.86



2008










930


$
55.00



930


$
57.03



     (1)
    
    Volumes presented are TBtu for
    natural gas and MBbl for oil. Prices presented are per MMBtu of
    natural gas and per Bbl of oil.(2)
    
    Our basis swaps effectively
    lock-in locational price differences on a portion of
    our natural gas production in Texas and Oklahoma.    $0.10/MMBtu
  Hurricanes.
 38




---



##### Table of Contents



Commodity-Based
    Derivative Contracts
    Maturity


Maturity


Maturity


Maturity


Maturity


TotalLess Than


1 to 3


4 to 5


6 to 10


Beyond


Fair1 Year


Years


Years


Years


10 Years


Value(In millions)Derivatives designated as
    accounting hedgesAssets

$
19


$
14


$



$



$



$
33Liabilities


(47
)


(40
)


(29
)


(3
)






(119
)Total derivatives designated as
    accounting hedges


(28
)


(26
)


(29
)


(3
)






(86
)Other commodity-based derivativesExchange-traded
    positions(1)Liabilities


(6
)


(20
)














(26
)Non-exchange traded positionsAssets


77



65



47



37



9



235Liabilities


(286
)


(387
)


(253
)


(209
)


(6
)


(1,141
)Total other commodity-based
    derivatives


(215
)


(342
)


(206
)


(172
)


3



(932
)Total commodity-based derivatives

$
(243
)

$
(368
)

$
(235
)

$
(175
)

$
3


$
(1,018
)     (1)
    
    These positions are traded on
    active exchanges such as the New York Mercantile Exchange, the
    International Petroleum Exchange and the London Clearinghouse.    Derivatives


Other


TotalDesignated as


Commodity-


Commodity-Accounting


Based


BasedHedges


Derivatives


Derivatives(In millions)Fair value of contracts
    outstanding at January 1, 2007

$
61


$
(456
)

$
(395
)Fair value of contract settlements
    during the
    period(1)


(29
)


(375
)


(404
)Change in fair value of contracts


(129
)


(126
)


(255
)Assignment of contracts






25



25Option premiums
    paid(2)


11







11Net change in contracts
    outstanding during the period


(147
)


(476
)


(623
)Fair value of contracts
    outstanding at March 31, 2007

$
(86
)

$
(932
)

$
(1,018
)     (1)
    
    During the first quarter of 2007,
    we settled contracts associated with approximately
    $381 million of our assets from price risk management
    activities by applying the related cash margin we held against
    amounts due under those contracts.(2)
    
    Amounts are net of premiums
    received. 39




---



##### Table of Contents



Item 3.
    Quantitative
    And Qualitative Disclosures About Market Risk  Form 10-K, Form 10-Q.
  Form 10-K,
  Commodity
    Price Risk
  Production-Related Derivatives.
  10 Percent Increase


10 Percent DecreaseFair Value


Fair Value


(Decrease)


Fair Value


IncreaseImpact of changes in commodity
    prices on derivative commodity instrumentsMarch 31, 2007

$
(118
)

$
(250
)

$
(132
)

$
3


$
121December 31, 2006

$
124


$
(9
)

$
(133
)

$
264


$
140   Other Commodity-Based Derivatives. Value-at-Risk one-day Value-at-Risk. one-day Value-at-Risk Value-at-Risk Value-at-Risk
  one-day Value-at-Risk one-day Value-at-Risk
 40




---



##### Table of Contents



Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  and/or
  Changes
    in Internal Control over Financial Reporting
   41




---



##### Table of Contents



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  Form 10-K
  Item 1A.
    Risk
    Factors CAUTIONARY
    STATEMENTS FOR PURPOSES OF THE SAFE HARBOR
    PROVISIONS
    OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
    1995    
    earnings per share;
    capital and other expenditures;
    dividends;
    financing plans;
    capital structure;
    liquidity and cash flow;
    pending legal proceedings, claims and governmental proceedings,
    including environmental matters;
    future economic and operating performance;
    operating income;
    managements plans; and
    goals and objectives for future operations.  Form 10-K.
  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   42




---



##### Table of Contents



Item 5.
    Other
    Information    Item 6.
    Exhibits  Regulation S-K.
 43




---



##### Table of Contents



SIGNATURES       
         
      44




---



##### Table of Contents



EL PASO
    CORPORATION
  EXHIBIT INDEX
    ExhibitNumber

Description*12


Ratio of Earnings to Combined
    Fixed Charges and Preferred Stock Dividends*31
.A

Certification of Chief 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 Chief 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.  45