El Paso To Sell Exploration And Production Business For $7.15 Billion

   DOW JONES NEWSWIRES 
 

El Paso Corp. (EP) said it will sell its oil-and-gas exploration unit for approximately $7.15 billion to a group led by private-equity firm Apollo Group Management LLC.

Last year, Kinder Morgan Inc. (KMI) agreed to buy El Paso Corp. for $21 billion, and said it would sell the company's exploration and production unit to help finance its bid. Kinder Morgan's deal to purchase El Paso is expected to close by the second quarter of this year.

The sale of the unit--EP Energy Corp.--is also expected to close about the same time as the Kinder Morgan-El Paso merger.

"We are pleased that this pending sale will allow the El Paso exploration and production assets to be kept intact as a single entity," said Kinder Morgan Chairman and CEO Richard D. Kinder.

The Wall Street Journal reported earlier Friday that the Apollo-led group, which also includes energy-focused private-equity firm Riverstone Holdings and Len Blavatnik's Access Industries, was nearing a deal for EP Energy for about $7 billion, citing people familiar with the matter.

El Paso shares rose by 8 cents to $27.24 in recent after hours trading while Kinder Morgan shares were up by 29 cents at $33.53.

-By Nathalie Tadena, Dow Jones Newswires; 212-416-3287; [e-mail]