El Paso Buys Put Options to Manage Exposure to Gas Prices
Houston-based El Paso Corp. last Tuesday said it purchased put options, which place a floor price on part of its natural gas production to manage the company's exposure to volatile prices.
The put options apply to a portion of El Paso's 2005 and 2006 gas production, according to the diversified energy company. As a result, El Paso said it will receive a minimum of $6/MMBtu for 60 TBtu of 2005 gas production and 120 TBtu of 2006 production.
El Paso also reported that it had debt, net of cash, of $17 billion as of Sept. 30 of this year, down from approximately $22 billion in the year-ago period. The company said it would give further details about its balance sheet and other financial items during a December conference call that will take place in conjunction with the filing of its third quarter Form 10-Q at the Securities and Exchange Commission.
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