El Paso Corp. (EP) , the pipeline company being bought by Kinder Morgan Inc. (KMI), has agreed to sell its oil and natural-gas fields in Egypt to an unidentified buyer, reducing its first-quarter results by about $62 million.
El Paso didn’t disclose terms of the deal, reached on April 30, according to a statement today. The transaction resulted in a non-cash charge of about $62 million, the Houston-based company said. Its exploration and production unit is being sold to a group led by Apollo Global Management (APO) for $7.15 billion.
El Paso has an interest in two blocks in Egypt totaling 774,000 acres, the size of the state of Rhode Island. The blocks didn’t produce oil or gas in 2011, according to its annual report. The company sought government approval for a partner in one of the blocks in 2011, but was delayed “due to political unrest.” Egypt’s long-time president, Hosni Mubarak, was forced from office in 2011 by pro-democracy protests.
Kinder Morgan intends to keep El Paso’s gas pipelines. The transaction is worth about $23.8 billion and is expected to close by the end of this month. Most of El Paso’s oil and gas production comes from onshore fields in the U.S.
Richard Wheatley, a spokesman for El Paso, declined to comment beyond the statement, according to an e-mail.
Source: Bloomberg Businessweek