Spectra Energy Reports Second Quarter 2007 Results

- Second quarter reported net income of $196 million; ongoing net income of $192 million- Reported net income per diluted share (EPS) of $0.31; ongoing EPS of $0.30- Well positioned to achieve 2007 financial goals- Significant progress made toward $3 billion 2007-2009 capital expansion including 80 percent increase in year to date capital spend.- Quarterly dividend of $0.22 paid

Spectra Energy today reported second quarter 2007 net income of $196 million, or $0.31 diluted earnings per share, compared with net income of $320 million in second quarter 2006.

Results include the positive effect of special items and discontinued operations of $4 million in second quarter 2007, and the positive effect of special items and discontinued operations of $56 million in the prior year quarter. Excluding these factors in both periods, ongoing net income was $192 million this quarter compared with $264 million in the second quarter 2006. The prior year period benefited from a $30 million tax rate reduction, which was not repeated in the second quarter 2007. The decline in earnings from Field Services and Western Canada Transmission & Processing largely accounted for the remaining variance.

The second quarter 2007 results reflect strong ongoing operations in our Distribution business and continued solid U.S. Transmission results, offset by lower Earnings Before Interest and Taxes (EBIT) in the Western Canada Transmission & Processing and Field Services businesses. Western Canada was affected by two scheduled plant maintenance turnarounds and Field Services experienced severe thunderstorms resulting in power outages. The affected plants at both Western Canada and Field Services were back on-line by the end of the second quarter.

Spectra Energy Transmission 2007 year-to-date capital spending increased more than 80 percent compared to the prior year period, reflecting significant progress made on the $3 billion expansion program for the 2007-2009 period. A total of approximately $650 million of capital projects are expected to be placed in service before the end of the year, at which time they will start contributing to EBIT.

In July 2007, Spectra Energy completed its initial public offering of Spectra Energy Partners, LP (SEP). Spectra Energy retained an 83 percent equity interest in SEP, and received net cash of $345 million.