El Paso Corp. dipped into the energy well and named Douglas L. Foshee, 44, the new CEO on Wednesday. Foshee, former CEO of Nuevo Energy Co., has been Halliburton’s COO since last March.

Foshee, also elected by the board of directors as president and a director, takes the reins on Sept. 2. Because of the election, El Paso said it would delay the release of its long-range planning process to allow Foshee to participate in the plan’s completion.

Current El Paso CEO Ronald L. Kuehn Jr., who will continue as the company’s chairman, has served as interim CEO since last March, when long-time chief William Wise was fired (see Daily GPI, March 13 ). Kuehn’s tenure has been tumultuous, as he presided over an ailing company and a proxy fight that threatened to topple the board. However, the incumbent board survived, and the company is continuing its work to restructure its operations.

Foshee first joined Halliburton in August 2001 as CFO and executive vice president. Halliburton said Wednesday it had no plans to replace the COO position. “We regret Doug’s decision to resign, as he has added significant value to the company during the past two years,” said Halliburton CEO Dave Lesar. He added that Foshee had been “instrumental in helping Halliburton manage through its asbestos difficulties.”

Before moving to the global energy services company, Foshee had been CEO of Nuevo Energy Co., resigning for personal reasons in May 2001 (see Daily GPI, May 14, 2001). The Houston-based producer is the largest independent in California, and its domestic operations are located onshore and offshore California and in West Texas.

From 1993 to 1997, Foshee also worked at Torch Energy Advisors Inc., as both CEO and earlier as COO. He also held various positions in finance and new business ventures with ARCO International Oil and Gas Co., and spent seven years in commercial banking, primarily as an energy lender.

El Paso’s dissident shareholders, who had been pushed to action about several issues, including the compensation El Paso executives received, may be somewhat appeased by the package offered Foshee. He will earn a base salary of $900,000, which matches the base suggested by the dissidents in their proxy battle earlier this year (see Daily GPI, June 5).

However, Foshee also would be entitled to a maximum target bonus of twice his annual salary, and he would receive an initial grant of 1 million El Paso stock options. He also is eligible for 300,000 restricted shares of company stock if he meets performance targets. In addition, Foshee will receive a one-time signing bonus of $1.75 million, half in El Paso shares that he must keep for two years, which will compensate him for the earnings he would have received through his $2.07 million contract with Halliburton.

In 2001, former CEO Wise received a $1.3 million annual salary, a $3.4 million bonus, and $210,481 in other annual compensation. He also had more than $2.4 million in restricted stock awards and securities options in 2001 (see Daily GPI, March 6).

“I am joining El Paso with a true sense of excitement about its future,” said Foshee on Wednesday. “El Paso’s leading pipeline, production, and midstream operations along with its dedicated employees make it the company best positioned to take advantage of the many opportunities emerging in the North American natural gas market. El Paso has made great strides in the past six months, but I recognize that there is more to be done. I am eager to reach out to the company’s employees, customers, and investors and work with them to realize the potential of this great company.”

Kuehn said Foshee “brings to El Paso the attributes of a great CEO — excellent leadership skills, experience in handling difficult and dynamic situations, and the ability to develop effective strategies and deliver results.” He said that when the board began its search process, it was determined to select a “world-caliber executive with strong energy industry experience and proven leadership qualities. We have found that combination with Doug, given his extensive experience in the energy sector.” Kuehn said he planned to work closely with Foshee during the transition.

Reaction to the announcement was mixed, with El Paso’s share price rising then falling slightly later in the day. Analysts led by Curt Launer of Credit Suisse First Boston called the appointment “favorable” because “we regard Mr. Foshee as a proven and successful manager with financial and ‘crisis management’ skills that are important to EP’s present and future issues.”

There was no reaction from any of the members of the dissident shareholder group.

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