##### 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
    June 30, 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
    issuer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


26Item 3.


Quantitative and
    Qualitative Disclosures About Market Risk


46Item 4.


Controls and
    Procedures


47PART II  OTHER
    INFORMATIONItem 1.


Legal
    Proceedings


48Item 1A.


Risk
    Factors


48Cautionary
    Statements for Purposes of the Safe Harbor
    Provisions of the Private Securities Litigation Reform Act of
    1995


48Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


49Item 3.


Defaults Upon
    Senior Securities


49Item 4.


Submission of
    Matters to a Vote of Security Holders


49Item 5.


Other
    Information


50Item 6.


Exhibits


50Signatures


51Twelfth Supplemental IndentureRatio of Earnings to Combined Fixed Charges and Preferred Stock DividendsCertification 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 feetBcf

= billion cubic feet

MMcfe

= million cubic feet of natural
    gas equivalentsLNG

= liquefied natural gas

NGL

= natural gas liquidsMBbls

= thousand barrels

TBtu

= trillion British thermal unitsMcf

= thousand cubic feet     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


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Operating revenues

$
1,198


$
1,089


$
2,220


$
2,426Operating expensesCost of products and services


60



70



115



132Operation and maintenance


329



338



630



623Depreciation, depletion and
    amortization


286



256



557



506Taxes, other than income taxes


72



62



132



119747



726



1,434



1,380Operating income


451



363



786



1,046Earnings from unconsolidated
    affiliates


44



37



81



66Loss on debt extinguishment


(86
)


(3
)


(287
)


(9
)Other income, net


61



41



106



91Interest and debt expense


(231
)


(316
)


(514
)


(647
)Income before income taxes from
    continuing operations


239



122



172



547Income taxes


70



(12
)


51



112Income from continuing operations


169



134



121



435Discontinued operations, net of
    income taxes


(3
)


16



674



71Net income


166



150



795



506Preferred stock dividends


10



9



19



19Net income available to common
    stockholders

$
156


$
141


$
776


$
487Basic earnings per common shareIncome from continuing operations

$
0.23


$
0.19


$
0.15


$
0.63Discontinued operations, net of
    income taxes






0.02



0.97



0.11Net income per common share

$
0.23


$
0.21


$
1.12


$
0.74Diluted earnings per common shareIncome from continuing operations

$
0.22


$
0.19


$
0.15


$
0.60Discontinued operations, net of
    income taxes






0.02



0.96



0.10Net income per common share

$
0.22


$
0.21


$
1.11


$
0.70Dividends declared per common share

$
0.04


$
0.04


$
0.08


$
0.08    1




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##### Table of Contents



EL PASO
    CORPORATION
  CONDENSED
    CONSOLIDATED BALANCE SHEETS
    (In millions, except share amounts)
    (Unaudited)
  June 30,


December 31,2007


2006ASSETSCurrent assetsCash and cash equivalents

$
309


$
537Accounts and notes receivableCustomers, net of allowance of $22
    in 2007 and $28 in 2006


538



516Affiliates


182



192Other


240



495Assets from price risk management
    activities


162



436Assets held for sale and from
    discontinued operations






4,161Deferred income taxes


297



478Other


264



352Total current assets


1,992



7,167Property, plant and equipment, at
    costPipelines


16,075



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


17,493



16,572Other


543



56634,111



32,810Less accumulated depreciation,
    depletion and amortization


16,461



16,132Total property, plant and
    equipment, net


17,650



16,678Other assetsInvestments in unconsolidated
    affiliates


1,653



1,707Assets from price risk management
    activities


222



414Other


1,301



1,2953,176



3,416Total assets

$
22,818


$
27,261    2




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##### Table of Contents



EL PASO
    CORPORATION
    CONDENSED CONSOLIDATED BALANCE SHEETS
    (In millions, except for share amounts)
    (Unaudited)
  June 30,


December 31,2007


2006LIABILITIES AND STOCKHOLDERS
    EQUITYCurrent liabilitiesAccounts payableTrade

$
418


$
478Affiliates


2



3Other


564



569Current maturities of long-term
    financing obligations


440



1,360Liabilities from price risk
    management activities


309



278Liabilities related to
    discontinued operations






1,817Accrued interest


208



269Other


776



1,377Total current liabilities


2,717



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


11,457



13,329OtherLiabilities from price risk
    management activities


945



924Deferred income taxes


1,069



950Other


1,743



1,6903,757



3,564Commitments and contingenciesSecurities of subsidiaries


21



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
    708,794,138 shares in 2007 and 705,833,206 shares in
    2006


2,126



2,118Additional paid-in capital


4,745



4,804Accumulated deficit


(2,149
)


(2,940
)Accumulated other comprehensive
    loss


(419
)


(343
)Treasury stock (at cost);
    8,348,787 shares in 2007 and 8,715,288 shares in 2006


(187
)


(203
)Total stockholders equity


4,866



4,186Total liabilities and
    stockholders equity

$
22,818


$
27,261    3




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##### Table of Contents



EL PASO
    CORPORATION
  CONDENSED
    CONSOLIDATED STATEMENTS OF CASH FLOWS
    (In millions)
    (Unaudited)
  Six Months EndedJune 30,2007


2006Cash flows from operating
    activitiesNet income

$
795


$
506Less income from discontinued
    operations, net of income taxes


674



71Income from continuing operations


121



435Adjustments to reconcile net
    income to net cash from operating activitiesDepreciation, depletion and
    amortization


557



506Deferred income taxes


42



84Earnings from unconsolidated
    affiliates, adjusted for cash distributions


40



10Loss on debt extinguishment


287



9Other


13



38Asset and liability changes


(178
)


150Cash provided by continuing
    activities


882



1,232Cash provided by (used in)
    discontinued activities


(17
)


190Net cash provided by operating
    activities


865



1,422Cash flows from investing
    activitiesCapital expenditures


(1,400
)


(942
)Net proceeds from the sale of
    assets and investments


80



475Other


20



20Cash used in continuing activities


(1,300
)


(447
)Cash provided by discontinued
    activities


3,660



275Net cash provided by (used) in
    investing activities


2,360



(172
)Cash flows from financing
    activitiesNet proceeds from issuance of
    long-term debt


3,666



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


(6,765
)


(1,818
)Dividends paid


(75
)


(71
)Net proceeds from issuance of
    common stock






500Contributions from discontinued
    operations


3,360



233Other


4



1Cash provided by (used in)
    continuing activities


190



(1,155
)Cash used in discontinued
    activities


(3,643
)


(465
)Net cash used in financing
    activities


(3,453
)


(1,620
)Change in cash and cash equivalents


(228
)


(370
)Cash and cash equivalentsBeginning of period


537



2,132End of period

$
309


$
1,762    4




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##### Table of Contents



EL PASO
    CORPORATION
    CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
    (In millions)
    (Unaudited)
  Six MonthsQuarters Ended


EndedJune 30,


June 30,2007


2006


2007


2006Net income

$
166


$
150


$
795


$
506Foreign currency translation
    adjustments (net of income taxes of less than $1 in 2006






(1
)






2Net reclassification adjustments
    (net of income taxes of $4 and $7 in 2007) associated with
    pension and other postretirement obligations


7







13



Cash flow hedging activities:Unrealized mark-to-market gains
    (losses) arising during period (net of income taxes of $28 and
    $19 in 2007 and $47 and $123 in 2006)


50



88



(33
)


219Reclassification adjustments for
    changes in initial value to the settlement date (net of income
    taxes of $9 and $24 in 2007 and $4 and $15 in 2006)


(15
)


5



(40
)


25Investments available for sale:Unrealized gains (losses) arising
    during period (net of income taxes $2 in 2007 and $3 and $5 in
    2006)






(6
)


3



9Realized gains arising during
    period (net of income taxes of $8 in 2007)


(15
)






(15
)


Other comprehensive income (loss)


27



86



(72
)


255Comprehensive income

$
193


$
236


$
723


$
761    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. No. 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



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Form 10-K.
  Discontinued Operations.
    ANR andRelatedOperations


Other


Total(In millions)Six Months Ended June 30,
    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
    $354 million(2)


648







648Net income from discontinued
    operations

$
674


$



$
674Quarter Ended June 30,
    2006Revenues

$
125


$
53


$
178Costs and expenses


(92
)


(46
)


(138
)Other income


16



2



18Interest and debt expense


(16
)


(6
)


(22
)Income taxes


(14
)


(6
)


(20
)Net income (loss) from
    discontinued operations

$
19


$
(3
)

$
16Six Months Ended June 30,
    2006Revenues

$
319


$
103


$
422Costs and expenses


(169
)


(111
)


(280
)Other income


31



2



33Interest and debt expense


(33
)


(13
)


(46
)Income taxes


(55
)


(3
)


(58
)Net income (loss) from
    discontinued operations

$
93


$
(22
)

$
71     (1)
    
    Includes a loss of approximately
    $19 million associated with the extinguishment of certain
    debt obligations in the first quarter of 2007.(2)
    
    During the second quarter of 2007,
    we recognized a $3 million loss, net of income taxes of
    $2 million, from discontinued operations related to a
    reduction of the gain on the sale of ANR primarily to reflect
    post-closing adjustments related to the sale. 7




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Continuing operations asset sales.
  3.
    Income
    Taxes    Quarters Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(In millions, except rates)Income taxes

$
70


$
(12
)

$
51


$
112Effective tax rate


29
%


(10
)%


30
%


20
%       non-U.S. income
   8




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       4.
    Earnings
    Per Share    2007


2006Basic


Diluted


Basic


Diluted(In millions, except per share amounts)Quarter Ended
    June 30,Income from continuing operations

$
169


$
169


$
134


$
134Convertible preferred stock
    dividends


(10
)






(9
)


Income from continuing operations
    available to common stockholders


159



169



125



134Discontinued operations, net of
    income taxes


(3
)


(3
)


16



16Net income available to common
    stockholders

$
156


$
166


$
141


$
150Weighted average common shares
    outstanding


696



696



671



671Effect of dilutive securities:Options and restricted stock






4







4Convertible preferred stock






57







57Weighted average common shares
    outstanding and dilutive securities


696



757



671



732Earnings per common share:Income from continuing operations

$
0.23


$
0.22


$
0.19


$
0.19Discontinued operations, net of
    income taxes










0.02



0.02Net income

$
0.23


$
0.22


$
0.21


$
0.21 9




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   2007


2006Basic


Diluted


Basic


Diluted(In millions, except per share amounts)Six Months Ended
    June 30,Income from continuing operations

$
121


$
121


$
435


$
435Convertible preferred stock
    dividends


(19
)


(19
)


(19
)


Income from continuing operations
    available to common stockholders


102



102



416



435Discontinued operations, net of
    income taxes


674



674



71



71Net income available to common
    stockholders

$
776


$
776


$
487


$
506Weighted average common shares
    outstanding


695



695



664



664Effect of dilutive securities:Options and restricted stock






4







3Convertible preferred stock














57Weighted average common shares
    outstanding and dilutive securities


695



699



664



724Earnings per common share:Income from continuing operations

$
0.15


$
0.15


$
0.63


$
0.60Discontinued operations, net of
    income taxes


0.97



0.96



0.11



0.10Net income

$
1.12


$
1.11


$
0.74


$
0.70   Form 10-K.
 10




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   5.
    Price
    Risk Management Activities    June 30,


December 31,2007


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

$
(7
)

$
61Other commodity-based derivative
    contracts(1)


(909
)


(456
)Total commodity-based derivatives


(916
)


(395
)Interest rate and foreign currency
    derivatives


46



43Net liabilities from price risk
    management activities

$
(870
)

$
(352
)     (1)
    
    During 2007, we settled derivative
    assets of approximately $381 million by applying the
    related cash margin we held against amounts due to us 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  June 30,


December 31,2007


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

$
440


$
1,360Long-term financing obligations


11,457



13,329Total

$
11,897


$
14,689  11




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   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

$
365


$
365El PasoRevolving credit facility

variable


1,200



1,200Notes due 2014

6.875%


374



371Notes due 2017

7.00%


893



886El Paso Natural Gas (EPNG)
    notes due 2017

5.95%


354



350Southern Natural Gas (SNG) notes
    due 2017

5.90%


500



494Increases through June 30,
    2007



$
3,686


$
3,666Repayments, repurchases, and
    other 
    Notes/OtherEl Paso

6.375%-10.75%

$
(2,837
)

$
(3,011
)El Paso-Euro

7.125%


(157
)


(165
)EPEP

7.75%


(1,199
)


(1,267
)SNG

6.70%


(52
)


(52
)SNG

8.875%


(398
)


(418
)EPNG

7.625%


(299
)


(314
)Other

various


(11
)


(13
)(4,953
)


(5,240
)Revolving Credit
    FacilitiesEPEP

variable


(200
)


(200
)El Paso

variable


(1,325
)


(1,325
)Decreases through June 30,
    2007



$
(6,478
)

$
(6,765
)     Other.
   12




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Credit
    Facilities
  Credit Agreements.
  Contingent Letter of Credit Facility.
  Unsecured Credit Facility.
  Letters of Credit.
  7.
    Commitments
    and Contingencies  Legal
    Proceedings
  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.
 13




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   and Case Corporation.
  Natural Gas Commodities Litigation. In re: Gas Commodity Litigation. In re: Western States Wholesale Natural
    Gas Antitrust Litigation Farmland Industries v. Oneok Inc. Missouri Public Service Commission v.
    El Paso Corporation, et al. Leggett, et
    al. v. Duke Energy Corporation, et al. Ever-Bloom
    Inc. v. AEP Energy Services Inc., et al. Learjet, Inc. v. Oneok Inc., Breckenridge, et al. v. Oneok Inc., et al. Arandell, et al. v. Xcel Energy, et al. Heartland, et al. v. Oneok Inc., et al. Leggett
  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.,
 14




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     MTBE.
  Government
    Investigations and Inquiries
  Reserve Revisions.
  Other Government Investigations.
  Other
    Contingencies
  EPNG Rate Case.
 15




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Iraq Imports.
  Navajo Nation.
  and/or
  Environmental
    Matters
     16




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     June 30, 2007Sites

Expected


High(In millions)Operating

$
26


$
32Non-operating


229



415Superfund


34



58Total

$
289


$
505     Balance as of January 1, 2007

$
314Additions/adjustments for
    remediation activities


15Payments for remediation activities


(40
)Balance as of June 30, 2007

$
289   clean-up
  CERCLA Matters. clean-up
    Guarantees
    and Indemnifications
   17




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Retiree Medical
    Benefits Matters
  8.
    Retirement
    Benefits    Quarters Ended June 30,


Six Months Ended June 30,Other





OtherPension


Postretirement


Pension


PostretirementBenefits


Benefits


Benefits


Benefits2007


2006


2007


2006


2007


2006


2007


2006(In millions)Service cost

$
4


$
4


$



$



$
9


$
8


$



$
Interest cost


30



29



7



7



60



58



13



14Expected return on plan assets


(46
)


(44
)


(4
)


(4
)


(91
)


(88
)


(8
)


(8
)Amortization of net actuarial loss


11



14











21



28







Amortization of prior service
    cost(1)










(1
)






(1
)






(1
)


Special termination
    benefits(2)


















6











Net benefit cost (income)

$
(1
)

$
3


$
2


$
3


$
4


$
6


$
4


$
6     (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
 18




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       9.
    Stockholders
    Equity    Common Stock

Convertible Preferred Stock($0.04/Share per Qtr)

(4.99%/Year)Amount paid through June 30,
    2007

$56

$19Amount paid in July 2007

$27

$9Declared subsequent to
    June 30, 2007:Date of declaration

July 26, 2007

July 26, 2007Payable to shareholders on record

September 7, 2007

September 15, 2007Date payable

October 1, 2007

October 1, 2007   paid-in-capital
    10.
    Business
    Segment Information    Pipelines.
  Exploration and Production.
 19




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Marketing.
  Power.
    Quarters Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(In millions)Segment EBIT

$
574


$
472


$
1,000


$
1,228Corporate and other


(104
)


(34
)


(314
)


(34
)Interest and debt expense


(231
)


(316
)


(514
)


(647
)Income taxes


(70
)


12



(51
)


(112
)Income from continuing operations

$
169


$
134


$
121


$
435  20




---



##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     SegmentsExploration and








CorporatePipelines


Production


Marketing


Power


and
    Other(1)


Total(In millions)Quarter Ended
    June 30,2007Revenue from external customers

$
600


$
268
(2)

$
301


$



$
29


$
1,198Intersegment revenue


14



307
(2)


(317
)






(4
)


Operation and maintenance


181



110



3



7



28



329Depreciation, depletion, and
    amortization


91



189



1







5



286Earnings (losses) from
    unconsolidated affiliates


29



3







13



(1
)


44EBIT


318



235



5



16



(104
)(3)


4702006Revenue from external customers

$
563


$
234
(2)

$
255


$
2


$
35


$
1,089Intersegment revenue


17



228
(2)


(237
)






(8
)


Operation and maintenance


174



98



9



16



41



338Depreciation, depletion, and
    amortization


93



156



1



1



5



256Earnings from unconsolidated
    affiliates


28



1







8







37EBIT


286



163



13



10



(34
)


438     (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 June 30, 2007 and 2006, we recorded an
    intersegment revenue elimination of $4 million and
    $8 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 the majority of our production.(3)
    
    Debt and treasury management
    activities, which are part of Corporate and Other, included debt
    extinguishment costs of $86 million primarily related to
    repayment of EPEPs $1.2 billion notes.  21




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   SegmentsExploration and








CorporatePipelines


Production


Marketing


Power


and
    Other(1)


Total(In millions)Six Months Ended
    June 30,2007Revenue from external customers

$
1,231


$
488
(2)

$
460


$



$
41


$
2,220Intersegment revenue


27



592
(2)


(611
)






(8
)


Operation and maintenance


342



220



3



11



54



630Depreciation, depletion, and
    amortization


185



359



2







11



557Earnings from unconsolidated
    affiliates


55



2







24







81EBIT


682



414



(130
)


34



(314
)(3)


6862006Revenue from external customers

$
1,192


$
315
(2)

$
853


$
3


$
63


$
2,426Intersegment revenue


31



613
(2)


(630
)






(14
)


Operation and maintenance


342



186



12



30



53



623Depreciation, depletion, and
    amortization


186



302



2



1



15



506Earnings (losses) from
    unconsolidated affiliates


44



8







15



(1
)


66EBIT


632



362



221



13



(34
)


1,194     (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
    six months ended June 30, 2007 and 2006, we recorded an
    intersegment revenue elimination of $8 million and
    $14 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 the majority of our production.(3)
    
    Debt and treasury management
    activities, which are part of Corporate and Other, included debt
    extinguishment costs of $287 million, $86 million of
    which related to refinancing EPEPs $1.2 billion notes.    June 30,


December 31,2007


2006(In millions)Pipelines

$
13,370


$
13,105Exploration and Production


6,746



6,262Marketing


673



1,143Power


643



618Total segment assets


21,432



21,128Corporate and Other


1,386



2,000Discontinued operations






4,133Total consolidated assets

$
22,818


$
27,261  22




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   11.
    Investments
    in, Earnings from and Transactions with Unconsolidated
    Affiliates    Earnings (Losses) fromUnconsolidated AffiliatesNet investment and earnings
    (losses)

Investment


Quarters Ended


Six Months EndedJune 30,


December 31,


June 30,


June 30,2007


2006


2007


2006


2007


2006(In millions)


(In millions)Domestic:Four
    Star(1)

$
684


$
723


$
3


$
1


$
2


$
8Citrus


565



597



22



19



44



29Other


38



36



1



4



1



4Foreign:Bolivia to Brazil Pipeline


109



105



2



4



5



5Manaus/Rio
    Negro(2)


88



96



5



5



9



11Porto
    Velho(3)


(28
)


(34
)


5



2



7



(1
)Asian and Central American
    Investments(3)(4)


26



27



(1
)


(6
)


(1
)


(5
)Other(3)


171



157



7



8



14



15Total

$
1,653


$
1,707


$
44


$
37


$
81


$
66     (1)
    
    Amortization of our purchase cost
    in excess of the underlying net assets of Four Star was
    $13 million for each of the quarters ended June 30,
    2007 and 2006 and $27 million for the six months ended
    June 30, 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 June 30, 2007 and
    December 31, 2006, we had outstanding advances and
    receivables of $394 million and $380 million related
    to our foreign investments of which $370 million and
    $350 million related to our investment in Porto Velho.
    Earnings above do not reflect interest income recognized on
    these outstanding advances and receivables of approximately
    $12 million for the quarters ended June 30, 2007 and
    2006 and $24 million and $23 million for the six
    months ended June 30, 2007 and 2006.(4)
    
    We have received approval from our
    Board of Directors to sell our interests in these investments.  Quarters Ended


Six Months EndedSummarized Financial
    Information

June 30,


June 30,2007


2006


2007


2006(In millions)Operating results data:Revenues

$
227


$
315


$
416


$
620Operating expenses


132



218



243



481Income from continuing operations


62



48



113



29Net
    income(1)


62



48



113



29     (1)
    
    Includes net income of
    $4 million for each of the quarters ended June 30,
    2007 and 2006, and $9 million for the six months ended
    June 30, 2007 and 2006, related to our proportionate share
    of affiliates in which we hold a greater than 50 percent
    interest. 23




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##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Six Months EndedRevenues and charges with
    unconsolidated affiliates

Quarter Ended June 30,


June 30,2007


2006


2007


2006(In millions)Operating revenue

$
2


$
26


$
3


$
60Operating expense


2



1



2



1Other income


1



1



2



3Interest income


12



12



24



23   Matters
    that Could Impact Our Investments
  Porto Velho.
    Asian and Central American power
    investments.
  Investment in Bolivia.
 24




---



##### Table of Contents



EL PASO CORPORATION
  NOTES TO CONDENSED CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Investment in Argentina.
 25




---



##### 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.
     26




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##### Table of Contents



Segment
    Results
      Quarters Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(In millions)SegmentPipelines

$
318


$
286


$
682


$
632Exploration and Production


235



163



414



362Marketing


5



13



(130
)


221Power


16



10



34



13Segment EBIT


574



472



1,000



1,228Corporate and other


(104
)


(34
)


(314
)


(34
)Consolidated EBIT


470



438



686



1,194Interest and debt expense


(231
)


(316
)


(514
)


(647
)Income taxes


(70
)


12



(51
)


(112
)Income from continuing operations


169



134



121



435Discontinued operations, net of
    income taxes


(3
)


16



674



71Net income

$
166


$
150


$
795


$
506  27




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##### Table of Contents



Pipelines
    Segment
  Operating Results.
  Quarters Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(In millions, except volume amounts)Operating revenues

$
614


$
580


$
1,258


$
1,223Operating expenses


(338
)


(329
)


(658
)


(651
)Operating income


276



251



600



572Other income


42



35



82



60EBIT

$
318


$
286


$
682


$
632Throughput volumes
    (BBtu/d)(1)


17,161



16,658



17,597



16,637     (1)
    
    Throughput volumes include volumes
    associated with our proportionate share of unconsolidated
    affiliates.  Quarter Ended June 30,


Six Months Ended June 30,Variance


VarianceRevenue


Expense


Other


EBIT


Revenue


Expense


Other


EBITImpact


Impact


Impact


Impact


Impact


Impact


Impact


ImpactFavorable/(Unfavorable)(In millions)Expansions

$
11


$
(2
)

$
2


$
11


$
19


$
(3
)

$
4


$
20Reservation and usage revenues


13











13



7











7Contract settlement


10











10



10











10Operational gas and revaluations


(7
)


2







(5
)


(7
)


(8
)






(15
)Hurricanes Katrina and Rita






7







7







13







13Gain on sale of asset in 2007






















7







7Equity earnings from Citrus










3



3











15



15Other(1)


7



(16
)


2



(7
)


6



(16
)


3



(7
)Total impact on EBIT

$
34


$
(9
)

$
7


$
32


$
35


$
(7
)

$
22


$
50     (1)
    
    Consists of individually
    insignificant items on several of our pipeline systems.  Expansions.
    Reservation and Usage Revenues.
 28




---



##### Table of Contents



Contract Settlement.
  Operational Gas and Revaluations.
  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 and is awaiting the FERCs
    approval. The settlement provides 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 to be effective January 1, 2009. Our
    financial statements reflect EPNGs proposed rates and we
    have reserved sufficient amounts to meet its 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 these rate changes. The new
    base rates were effective March 1, 2007 and are subject to
    further adjustment upon the outcome of the rate case proceeding.
    MPC is actively engaged in settlement negotiations with its
    customers, the outcome of which cannot be predicted at this time. 29




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##### Table of Contents



Exploration
    and Production Segment
  Overview
    and Strategy
    Form 10-K.
  Operating
    Results for the Periods Ended June 30, 2007
  Average Daily Production.
  Six Months EndedJune 30,2007


2006(MMcfe/d)United StatesOnshore


365



340Texas Gulf Coast


196



191Gulf of Mexico Shelf /south
    Louisiana


192



149InternationalBrazil


15



27Total Consolidated


768



707Four
    Star(1)


70



68     (1)
    
    Amounts represent our proportionate
    share of the production of Four Star.   30




---



##### Table of Contents



Drilling
  Onshore.
  Texas Gulf Coast.
  Gulf of Mexico Shelf /south Louisiana.
  Brazil.
  Egypt.
  Cash Operating Costs.
  Capital Expenditures.
  Outlook
    
    Average daily production volumes of approximately
    755 MMcfe/d to 790 MMcfe/d, which excludes
    approximately 65 MMcfe/d to 70 MMcfe/d from our equity
    investment in Four Star;
    Capital expenditures, excluding acquisitions, between
    $1.4 billion and $1.5 billion. While over
    80 percent of the planned 2007 capital program is allocated
    to our domestic program, we plan to invest approximately
    $270 million internationally during 2007 (of which
    $114 million has been spent through June 30, 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 $1.85/Mcfe to
    $2.00/Mcfe; and
    An overall depreciation, depletion, and amortization rate
    between $2.60/Mcfe and $2.75/Mcfe. 31




---



##### Table of Contents



Price
    Risk Management Activities
      Fixed Price














BasisSwaps(1)


Floors(1)


Ceilings(1)


Swaps(1)(2)Average





Average





Average


Texas Gulf Coast


Onshore-RatonVolumes


Price


Volumes


Price


Volumes


Price


Volumes


Avg. Price


Volumes


Avg. PriceNatural
    Gas2007


39


$
7.72



28


$
8.00



28


$
16.89



40


$
(0.65
)


15


$
(1.13
)2008


5


$
3.42



75


$
8.00



75


$
11.14



51


$
(0.33
)


26


$
(1.21
)2009


5


$
3.56















2010-2012


11


$
3.81















Oil2007


97


$
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 limit
    our exposure to differences between the NYMEX gas price and the
    price at the location where we sell our gas. The average prices
    listed above are the amounts we will pay per MMBtu relative to
    the NYMEX price to lock-in these locational price
    differences.    $8.24/MMBtu.
   32




---



##### Table of Contents



Financial
    Results and Analysis
  Quarters Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(In millions)Operating Revenues:Natural gas

$
459


$
326


$
867


$
692Oil, condensate and NGL


111



118



199



208Other


5



18



14



28Total operating revenues


575



462



1,080



928Operating Expenses:Depreciation, depletion and
    amortization


(189
)


(156
)


(359
)


(302
)Production costs


(84
)


(79
)


(170
)


(143
)Cost of products and services


(19
)


(22
)


(43
)


(44
)General and administrative expenses


(49
)


(41
)


(95
)


(83
)Other


(5
)


(3
)


(7
)


(4
)Total operating expenses


(346
)


(301
)


(674
)


(576
)Operating income


229



161



406



352Other
    income(1)


6



2



8



10EBIT

$
235


$
163


$
414


$
362     (1)
    
    Includes equity earnings from our
    investment in Four Star.  33




---



##### Table of Contents



Quarters Ended June 30,


Six Months Ended June 30,Percent








Percent2007


2006


Variance


2007


2006


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


59,804



53,638



11
%


116,517



105,667



10
%Average realized prices including
    hedges ($/Mcf)

$
7.67


$
6.08



26
%

$
7.44


$
6.55



14
%Average realized prices excluding
    hedges ($/Mcf)

$
7.17


$
6.34



13
%

$
6.83


$
7.05



(3
)%Average transportation costs ($/Mcf)

$
0.24


$
0.22



9
%

$
0.27


$
0.23



17
%Oil, condensate and NGLVolumes (MBbls)


1,948



1,958



(1
)%


3,736



3,703



1
%Average realized prices including
    hedges ($/Bbl)

$
56.87


$
60.64



(6
)%

$
53.25


$
56.22



(5
)%Average realized prices excluding
    hedges ($/Bbl)

$
57.50


$
60.64



(5
)%

$
53.94


$
56.85



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

$
0.68


$
0.80



(15
)%

$
0.72


$
1.01



(29
)%Total equivalent volumesMMcfe


71,493



65,386



9
%


138,935



127,886



9
%MMcfe/d


786



719



9
%


768



707



9
%Production costs and other cash
    operating costs ($/Mcfe)Average lease operating cost

$
0.85


$
0.87



(2
)%

$
0.89


$
0.81



10
%Average production
    taxes(2)


0.33



0.33




%


0.33



0.31



6
%Total production cost


1.18



1.20



(2
)%


1.22



1.12



9
%Average general and administrative
    cost


0.68



0.62



10
%


0.69



0.64



8
%Average taxes, other than
    production and income


0.06



0.04



50
%


0.05



0.03



67
%Total cash operating costs

$
1.92


$
1.86



3
%

$
1.96


$
1.79



9
%Unit of production depletion cost
    ($/Mcfe)

$
2.52


$
2.24



13
%

$
2.46


$
2.22



11
%Unconsolidated affiliate volumes
    (Four Star)Natural gas (MMcf)


4,806



4,456







9,747



8,963Oil, condensate and NGL (MBbls)


268



260







501



569Total equivalent volumesMMcfe


6,417



6,015







12,755



12,375MMcfe/d


71



66







70



68     (2)
    
    Production taxes include ad valorem
    and severance taxes. 34




---



##### Table of Contents



Quarter Ended June 30, 2007


Six Months Ended June 30, 2007Variance


VarianceOperating


Operating








Operating


OperatingRevenue


Expense


Other


EBIT


Revenue


Expense


Other


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

$
50


$



$



$
50


$
(25
)

$



$



$
(25
)Impact of hedges


44











44



124











124Higher volumes in 2007


39











39



76











76Oil, Condensate and NGL
    RevenueLower realized prices in 2007


(6
)










(6
)


(11
)










(11
)Impact of hedges


(1
)










(1
)














Higher volumes in 2007


















2











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


(7
)










(7
)


(5
)










(5
)Other


(6
)










(6
)


(9
)










(9
)Depreciation, Depletion and
    Amortization ExpenseHigher depletion rate in 2007






(20
)






(20
)






(33
)






(33
)Higher production volumes in 2007






(14
)






(14
)






(25
)






(25
)Production CostsHigher lease operating costs in
    2007






(3
)






(3
)






(21
)






(21
)Higher production taxes in 2007






(2
)






(2
)






(6
)






(6
)General and Administrative
    Expenses






(8
)






(8
)






(12
)






(12
)OtherEarnings from investment in Four
    Star










2



2











(6
)


(6
)Other






2



2



4







(1
)


4



3Total Variances

$
113


$
(45
)

$
4


$
72


$
152


$
(98
)

$
(2
)

$
52   Operating revenues.
  Depreciation, depletion and amortization
    expense.
  Production costs.
 35




---



##### Table of Contents



General and administrative expenses.
  Other.
 36




---



##### Table of Contents



Marketing
    Segment
  Overview. Form 10-K.
  Operating Results.
  Quarters Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


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

$
9


$
27


$
(78
)

$
189Contracts Related to Legacy
    Trading Operations:Natural gas transportation-related
    natural gas contracts:Demand charges


(28
)


(34
)


(55
)


(69
)Settlements


16



17



36



37Changes in fair value of other
    natural gas derivative contracts


2



(18
)


(22
)


29Changes in fair value of power
    contracts(1)


(15
)


26



(32
)


37Total gross
    margin(2)


(16
)


18



(151
)


223Operating expenses


(4
)


(10
)


(5
)


(15
)Operating income (loss)


(20
)


8



(156
)


208Other income,
    net(3)


25



5



26



13EBIT

$
5


$
13


$
(130
)

$
221     (1)
    
    Includes $21 million of
    revenue recognized in the second quarter of 2007 related to the
    settlement of outstanding California power price disputes.(2)
    
    Gross margin consists of revenues
    from commodity marketing activities less costs of commodities
    sold, including changes in the fair value of derivative
    contracts.(3)
    
    Includes a $23 million gain in
    the second quarter of 2007 on the sale of our investment in the
    NYMEX. 37




---



##### Table of Contents



Production-related
    Natural Gas and Oil Derivative Contracts
  Options and swaps.
    Floors(1)


Ceilings(1)Average





AverageVolumes


Price


Volumes


PriceNatural Gas2007


45


$
7.50






$
2008


18


$
6.00



18


$
10.002009


17


$
6.00



17


$
8.75Oil2007


487


$
55.00



487


$
59.282008


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 Legacy Trading Operations
  Natural gas transportation-related
    contracts. Form 10-K.
  Quarters Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006Alliance:Demand charges

$
17


$
16


$
33


$
32Recovery


47
%


66
%


47
%


43
%Other:Demand charges

$
11


$
18


$
22


$
37Recovery


100
%


36
%


100
%


63
%  38




---



##### Table of Contents



Other natural gas derivative contracts.
  Power Contracts.
   39




---



##### Table of Contents



Power
    Segment
    Area

AmountBrazilPorto Velho

$
343Manaus & Rio Negro


90Pipeline projects


148Asia & Central
    America


76Total investment, guarantees and
    letters of credit

$
657   Brazil.
  Asia and Central America.
  Operating Results.
  Corporate
    and Other Expenses, Net
    Quarter Ended June 30,


Six Months Ended June 30,2007


2006


2007


2006(In millions)Loss on extinguishment of debt

$
(86
)

$
(3
)

$
(287
)

$
(9
)Foreign currency fluctuations on
    Euro-denominated debt


(1
)


(10
)


(3
)


(14
)Change in litigation, insurance
    and other reserves


(9
)


(29
)


(35
)


(41
)Other


(8
)


8



11



30Total EBIT

$
(104
)

$
(34
)

$
(314
)

$
(34
)   Extinguishment of Debt.
 40




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##### Table of Contents



Litigation, Insurance, and Other Reserves.
  Interest
    and Debt Expense
    Income
    Taxes
  Quarters Ended


Six Months EndedJune 30,


June 30,2007


2006


2007


2006(In millions, except for rates)Income taxes

$
70


$
(12
)

$
51


$
112Effective tax rate


29
%


(10
)%


30
%


20
%     Discontinued
    Operations
    Commitments
    and Contingencies
   41




---



##### Table of Contents



Liquidity
    and Capital Resources
  Sources and Uses of Cash.
  Overview of Cash Flow Activities.
  2007


2006(In billions)Cash Flow from
    OperationsContinuing operating
    activitiesIncome from continuing operations

$
0.1


$
0.4Loss on debt extinguishment


0.3



Other income adjustments


0.7



0.6Change in other assets and
    liabilities


(0.2
)


0.2Total cash flow from operations

$
0.9


$
1.2Other Cash InflowsContinuing investing
    activitiesNet proceeds from the sale of
    assets and investments

$
0.1


$
0.50.1



0.5Continuing financing
    activitiesNet proceeds from the issuance of
    long-term debt


3.7



Contribution from discontinued
    operations


3.4



0.2Net proceeds from the issuance of
    common stock






0.57.1



0.7Total other cash inflows

$
7.2


$
1.2Cash OutflowsContinuing investing
    activitiesCapital expenditures

$
1.4


$
0.91.4



0.9Continuing financing
    activitiesPayments to retire long-term debt
    and other financing obligations


6.8



1.8Dividends and other


0.1



0.16.9



1.9Total cash outflows

$
8.3


$
2.8Net change in cash

$
(0.2
)

$
(0.4
)  42




---



##### Table of Contents



(In billions)Proceeds from sale of ANR and
    related assets

$
3.7Payments to retire ANR debt
    obligations


(0.3
)Contribution from discontinued
    operations

$
3.4     Six Months EndedJune 30, 2007


2007 Remaining


TotalMaintenancePipelines

$
0.2


$
0.2


$
0.4Exploration and Production


0.7



0.5



1.2GrowthPipelines


0.2



0.4



0.6Exploration and Production


0.3



0.2



0.5$
1.4


$
1.3


$
2.7     Liquidity/Cash Flow Outlook.
  Factors That Could Impact Our Future
    Liquidity. Form 10-K.
 43




---



##### Table of Contents



Price Risk Management Activities and Cash Margining
    Requirements.
  Fixed Price














BasisSwaps(1)


Floors(1)


Ceilings(1)


Swaps(1)(2)Average





Average





Average


Texas Gulf Coast


Onshore-RatonVolumes


Price


Volumes


Price


Volumes


Price


Volumes


Avg. Price


Volumes


Avg. PriceNatural Gas2007


39


$
7.72



73


$
7.69



28


$
16.89



40


$
(0.65
)


15


$
(1.13
)2008


5


$
3.42



93


$
7.61



93


$
10.92



51


$
(0.33
)


26


$
(1.21
)2009


5


$
3.56



17


$
6.00



17


$
8.752010-2012


11


$
3.81















Oil2007


97


$
35.15



487


$
55.00



487


$
59.282008










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 limit
    our exposure to differences between the NYMEX gas price and the
    price at the location where we sell our gas. The average prices
    listed above are the amounts we will pay per MMBtu relative to
    the NYMEX price to lock-in these locational price
    differences.        Hurricanes.
 44




---



##### 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

$
66


$
18


$



$



$



$
84Liabilities


(20
)


(41
)


(30
)










(91
)Total derivatives designated as
    accounting hedges


46



(23
)


(30
)










(7
)Other commodity-based derivativesExchange-traded
    positions(1)Liabilities


(4
)


(20
)














(24
)Non-exchange traded positionsAssets


94



61



61



33



7



256Liabilities


(284
)


(384
)


(269
)


(199
)


(5
)


(1,141
)Total other commodity-based
    derivatives


(194
)


(343
)


(208
)


(166
)


2



(909
)Total commodity-based derivatives

$
(148
)

$
(366
)

$
(238
)

$
(166
)

$
2


$
(916
)     (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)


(34
)


(317
)


(351
)Change in fair value of contracts


(51
)


(154
)


(205
)Assignment of contracts






18



18Option premiums
    paid(2)


17







17Net change in contracts
    outstanding during the period


(68
)


(453
)


(521
)Fair value of contracts
    outstanding at June 30, 2007

$
(7
)

$
(909
)

$
(916
)     (1)
    
    During 2007, we settled derivative
    assets of approximately $381 million by applying the
    related cash margin we held against amounts due to us under
    those contracts.(2)
    
    Amounts are net of premiums
    received. 45




---



##### 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 production-related derivative assets (liabilities)June 30, 2007

$
(28
)

$
(149
)

$
(121
)

$
98


$
126December 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
 46




---



##### Table of Contents



Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  and/or
  Changes
    in Internal Control over Financial Reporting
   47




---



##### Table of Contents



PART II 
    OTHER INFORMATION  Item 1.
    Legal
    Proceedings  Form 10-K
  Fort Morgan Storage Field.
  Carlsbad.
  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. 48




---



##### Table of Contents



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      Nominee

For


Against


AbstainJuan Carlos Braniff


524,230,360



69,820,631



7,435,601James L. Dunlap


590,938,620



5,057,478



5,490,495Douglas L. Foshee


590,856,736



5,254,299



5,375,557Robert W. Goldman


526,911,812



67,073,850



7,500,930Anthony W. Hall Jr.


588,005,185



5,976,808



7,504,599Thomas R. Hix


591,705,481



7,518,993



2,262,119William H. Joyce


585,133,888



8,873,651



7,479,053Ronald L. Kuehn, Jr.


583,278,046



10,180,909



8,027,637Ferrell P. McClean


589,138,541



4,745,830



7,602,221Steven J. Shapiro


590,815,874



5,085,510



5,585,208J. Michael Talbert


591,324,552



4,609,761



5,552,280Robert F. Vagt


588,419,487



5,588,412



7,478,694John L. Whitmire


530,598,591



63,449,269



7,438,733Joe B. Wyatt


585,423,004



8,240,383



7,823,205     For


Against


AbstainProposal to ratify the appointment
    of Ernst & Young LLP as our independent registered
    public accounting firm


594,142,504



2,345,444



4,998,644  49




---



##### Table of Contents



By-laws
  For


Against


AbstainStockholder Proposal: Approval of
    request for amendment to the By-Laws related to special
    stockholder meetings


331,393,899



151,429,953



6,941,936Stockholder Proposal: Approval of
    amendment to the By-Laws concerning policy-abandoning decisions


42,991,656



427,418,471



19,453,662   Item 5.
    Other
    Information    Item 6.
    Exhibits  Regulation S-K.
 50




---



##### Table of Contents



SIGNATURES       
         
     51




---



##### Table of Contents



EL PASO
    CORPORATION
    EXHIBIT INDEX
    ExhibitNumber

Description*4.A

Twelfth Supplemental Indenture
    dated as of June 18, 2007 between El Paso Corporation and
    HSBC Bank USA, National Association, as trustee, to
    Indenture dated as of May 10, 1999.*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.  52