On Feb. 18, 2004, Standard&Poor's Ratings Services lowered its corporate credit rating on natural gas pipeline and production company El Paso Corp. and subsidiaries (including Southern Natural Gas Co.) to 'B-' from 'B' to reflect a larger-than-expected write-down of the company's oil and natural gas reserves. The large revision to El Paso's proved reserves, amounting to more than 40% of the company's reserve base, and the resulting ceiling-test write-down of about $1 billion is greater than what had been factored into the ratings. While there is no immediate cash flow effect related to this action, it does suggest that future production and likely cash flow will be weakened in 2005 and beyond. The negative outlook will continue until
