HOUSTON, May 6 /PRNewswire-FirstCall/ -- Plains
Exploration & Production Company (NYSE: PXP) (“PXP” or the
“Company”) announces 2010 first quarter financial and operating
results.
FINANCIAL SUMMARY
For the first quarter 2010, revenues of $384.1 million generated $58.5 million of net income, or $0.41 per diluted share compared to revenues of
$228.5 million and net income of
$5.2 million, or $0.05 per diluted share, for the first quarter
2009. These results include certain items affecting comparability
of operating results. Those items consist of realized and
unrealized gains and losses on our mark-to-market derivative
contracts, which exclude the impact of the derivatives monetized in
the first quarter 2009, and other items. When considering these
items, net income for the first quarter 2010 was $43.5 million, or $0.31 per diluted share, compared to $10.0 million, or $0.09 per diluted share, for the first quarter
2009 (a non-GAAP measure).
For the first quarter 2010, net cash provided by operating
activities was $221.8 million and
operating cash flow was $226.2
million compared to net cash used in operating activities of
$29.4 million and operating cash flow
of $164.7 million for the first
quarter 2009 (a non-GAAP measure).
A reconciliation of non-GAAP financial measures used in this
release to comparable GAAP financial measures is included with the
financial tables.
OPERATIONAL HIGHLIGHTS
Average daily sales volumes for the first quarter 2010 were 85.1
thousand barrels of oil equivalent (BOE) or 5% higher than 80.9
thousand BOE in the first quarter 2009. Oil represented
approximately 53% of the first quarter 2010 daily volumes.
Total production costs per BOE were $14.37 in the first quarter 2010 or 10% lower
than $15.89 per BOE in the first
quarter 2009.
In California, PXP continues to
expand the development of incremental Diatomite, Non-Diatomite and
Miocene projects to maintain production volumes. The 2010 plan
includes drilling over 100 onshore wells compared to 12 wells in
2009.
In the Haynesville Shale, first quarter average daily production
increased 19% to approximately 89 million cubic feet equivalent
(MMcfe) net to PXP from approximately 75 MMcfe net per day during
the fourth quarter 2009. Production is expected to continue to
increase to approximately 125 MMcfe net per day by year-end
2010.
In the Gulf of Mexico, an
active appraisal and exploration drilling program is underway.
Gulf of Mexico - Shallow
Water
The Davy Jones offset appraisal well (Davy Jones #2), operated
by McMoRan Exploration Co. (NYSE: MMR) and located on South Marsh
Island Block 234, is currently drilling towards a proposed total
depth of approximately 29,950 feet. Davy Jones #2 is expected to test similar sections
up-dip to the discovery well located on South Marsh Island Block
230. In March 2010, a production
liner was set and the discovery well was temporarily abandoned
until necessary equipment for the completion is
available. PXP’s working interest is 27.7%.
The Blackbeard East exploration well, operated by McMoRan and
located on South Timbalier Block 144, is currently drilling towards
a proposed total depth of approximately 29,950 feet targeting
Middle and Lower Miocene objectives. In addition to drilling the
objective section previously seen below 30,000 feet in the
Blackbeard West well, Blackbeard East is designed to test a younger
Miocene section due to a shallower salt exit point. PXP’s working
interest is 31.5%.
The Lafitte exploration well is expected to commence drilling in
2010. Lafitte, operated by McMoRan and located on Eugene Island Block 223, will target Middle and
Lower Miocene objectives. PXP’s working interest is 26.25%.
The 2010 shallow water exploratory drilling plan includes
sidetracking operations at Blueberry Hill and re-drilling of
Hurricane Deep. The Blueberry Hill sidetrack well, operated by
McMoRan and located on State Lease Block 340, is currently drilling
towards a proposed total depth of 24,000 feet. PXP’s working
interest is 47.9%. The Hurricane Deep sidetrack well, operated by
Chevron Corporation and located on South Marsh Island Block 217,
will be re-drilled during 2010. The operator encountered an
underground flow in the well at approximately 18,450 feet, and PXP
anticipates insurance will cover its share of costs to re-drill to
18,450 feet. PXP’s working interest is 30%.
Gulf of Mexico -
Deepwater
The Lucius #2 appraisal well, operated by Anadarko Petroleum
Corporation (NYSE: APC) and located on Keathley Canyon Block 875,
is currently drilling towards a proposed total depth of 20,256
feet. The Lucius discovery well was announced in December 2009, followed by a successful appraisal
sidetrack in late January 2010, which
confirmed a major oil discovery. PXP’s working interest is
33.3%.
Gulf of Mexico - Lease Sale
213
PXP and its partners are apparent high bidders on 44 blocks on
which they bid at the U.S. Minerals Management Service (MMS)
Central Gulf of Mexico Oil and Gas Lease Sale 213 in March 2010. PXP’s apparent high bids include
interests in 16 shelf blocks and 28 deepwater blocks. The Company's
working interests on the blocks range from 25%-100%, with a net
exposure of approximately $34
million. PXP and its partners expect the leases to be
awarded over the next several months subject to MMS review and
approval.
In the Texas Panhandle, PXP
recently finished drilling and set completion liners on two Granite
Wash horizontal test wells, one in the Wheeler Field and one in the
Marvin Lake Field. Hydrocarbon shows during drilling operations for
both wells were in-line with pre-drill expectations. PXP expects
first production from these wells by the end of the second quarter.
The 2010 plan includes drilling 13 Granite Wash wells from an
inventory of over 100 potential locations.
In the Gulf Coast, drilling operations are underway at the Big
Mac project in Southeast Texas.
The proposed total depth on the first well is approximately 14,770
feet and results are expected by the end of the second quarter. PXP
has approximately 30 to 40 leads, all amplitude driven, associated
with its Big Mac project.
DERIVATIVE SUMMARY
As previously reported, PXP acquired crude oil put option spread
contracts on 31,000 barrels of oil per day in 2011 and 40,000
barrels of oil per day in 2012. Both the 2011 and 2012 put options
have a floor price of $80 with a
limit of $60 per barrel. If the index
price is below $80 per barrel, PXP
will receive the difference between $80 and the index price up to a maximum of
$20 per barrel less the option
premium. If the index price is at or above $80 per barrel, PXP pays only the option
premium.
PXP also acquired crude oil three-way collars that have a floor
price of $80 with a limit of
$60 and a ceiling price of
$110 on 9,000 barrels of oil per day
for 2011. If the index price is below $80 per barrel, PXP will receive the difference
between $80 and the index price up to
a maximum of $20 per barrel less the
option premium. If the index price is greater than $110 per barrel, PXP will pay the difference
between the index price and $110 per
barrel plus the option premium. If the index price is at or above
$80 per barrel but at or below
$110 per barrel, PXP pays only the
option premium.
PXP has elected not to use hedge accounting for these
derivatives and consequently the derivatives will be
marked-to-market each quarter with fair value gains and losses
recognized currently as a gain or loss on mark-to-market derivative
contracts on the income statement. A summary of PXP’s open
commodity derivative positions is included with the financial
tables in this release.
CONFERENCE CALL
PXP will host a conference call today, Thursday, May 6, 2010 at 8:00 a.m. Central time. Investors wishing to
participate in the conference call may dial 1-800-567-9836 or
1-973-935-8460. The conference call and replay ID is: 63883713. The
replay will be available through Thursday,
May 20, 2010 and can be accessed by dialing 1-800-642-1687
or 1-706-645-9291. A live webcast of the conference call will be
available in the Investor Information section of PXP’s website at
www.pxp.com.
PXP is an independent oil and gas company primarily engaged in
the activities of acquiring, developing, exploring and producing
oil and gas in California,
Texas, Louisiana and the Gulf of Mexico. PXP is headquartered in
Houston, Texas.
ADDITIONAL INFORMATION & FORWARD-LOOKING
STATEMENTS
This press release contains forward-looking information
regarding PXP that is intended to be covered by the safe harbor
"forward-looking statements" provided by the Private Securities
Litigation Reform Act of 1995. All statements included in this
press release that address activities, events or developments that
PXP expects, believes or anticipates will or may occur in the
future are forward-looking statement. These include statements
regarding:
* reserve and production estimates,
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* oil and gas prices,
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* the impact of derivative positions,
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* production expense estimates,
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* cash flow estimates,
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* future financial performance,
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* capital and credit market
conditions,
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* planned capital expenditures, and
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* other matters that are discussed in PXP's filings
with the SEC.
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These statements are based on our current expectations and
projections about future events and involve known and unknown
risks, uncertainties, and other factors that may cause our actual
results and performance to be materially different from any future
results or performance expressed or implied by these
forward-looking statements. Please refer to our filings with the
SEC, including our Form 10-K, for a discussion of these
risks.
References to quantities of oil or natural gas may include
amounts that the Company believes will ultimately be produced, but
that are not yet classified as “proved reserves” under SEC
definitions.
All forward-looking statements in this report are made as of
the date hereof, and you should not place undue reliance on these
statements without also considering the risks and uncertainties
associated with these statements and our business that are
discussed in this report and our other filings with the SEC.
Moreover, although we believe the expectations reflected in the
forward-looking statements are based upon reasonable assumptions,
we can give no assurance that we will attain these expectations or
that any deviations will not be material. Except as required by
law, we do not intend to update these forward-looking statements
and information.
Plains Exploration & Production
Company
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Consolidated Statements of
Income
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(in thousands, except per share
data)
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|
|
|
|
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Three Months
Ended
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March
31,
|
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|
|
|
|
2010
|
|
2009
|
|
|
|
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(Unaudited)
|
|
Revenues
|
|
|
|
|
|
Oil sales
|
$
276,004
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|
$
156,614
|
|
|
Gas sales
|
107,739
|
|
71,264
|
|
|
Other operating revenues
|
307
|
|
634
|
|
|
|
|
|
384,050
|
|
228,512
|
|
Costs and Expenses
|
|
|
|
|
|
Lease operating expenses
|
62,503
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|
70,884
|
|
|
Steam gas costs
|
19,663
|
|
15,557
|
|
|
Electricity
|
10,034
|
|
10,942
|
|
|
Production and ad valorem
taxes
|
8,447
|
|
11,621
|
|
|
Gathering and transportation
expenses
|
9,419
|
|
6,647
|
|
|
General and administrative
|
37,390
|
|
37,093
|
|
|
Depreciation, depletion and
amortization
|
122,393
|
|
88,114
|
|
|
Accretion
|
4,411
|
|
3,531
|
|
|
Legal recovery
|
(8,423)
|
|
-
|
|
|
Other operating (income)
expense
|
(569)
|
|
4,457
|
|
|
|
|
|
265,268
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|
248,846
|
|
|
|
|
|
|
|
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|
Income (Loss) from
Operations
|
118,782
|
|
(20,334)
|
|
Other (Expense) Income
|
|
|
|
|
|
Interest expense
|
(21,053)
|
|
(21,997)
|
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|
Debt extinguishment costs
|
(728)
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|
(10,243)
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|
Gain on mark-to-market derivative
contracts
|
7,856
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|
88,139
|
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Other income (expense)
|
1,306
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|
(707)
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Income Before Income
Taxes
|
106,163
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|
34,858
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Income tax (expense)
benefit
|
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Current
|
(4,738)
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(55,791)
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Deferred
|
(42,897)
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|
26,131
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Net Income
|
$
58,528
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|
$
5,198
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Earnings Per Share
|
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Basic
|
$
0.42
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$
0.05
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Diluted
|
$
0.41
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$
0.05
|
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Weighted Average Shares
Outstanding
|
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Basic
|
139,741
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107,755
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Diluted
|
141,940
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108,224
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Plains Exploration & Production
Company
|
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Operating Data
(Unaudited)
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Three Months
Ended
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March
31,
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2010
|
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2009
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Daily Average Volumes
|
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Oil and liquids sales
(Bbls)
|
45,217
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|
49,394
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|
Gas (Mcf)
|
|
|
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Production
|
244,594
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|
195,943
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|
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Used as fuel
|
5,313
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|
7,175
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|
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Sales
|
239,281
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|
188,768
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|
BOE
|
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|
|
|
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Production
|
85,983
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|
82,052
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|
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Sales
|
85,097
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|
80,856
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Unit Economics (in
dollars)
|
|
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Average NYMEX Prices
|
|
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Oil
|
$
78.88
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|
$
43.31
|
|
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Gas
|
5.27
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|
4.87
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Average Realized Sales Price Before
Derivative Transactions
|
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Oil (per Bbl)
|
$
67.82
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|
$
35.23
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Gas (per Mcf)
|
5.00
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|
4.19
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Per BOE
|
50.11
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31.31
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|
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Cash Margin per BOE (1)
|
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Oil and gas revenues
|
$
50.11
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|
$
31.31
|
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Costs and expenses
|
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|
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Lease operating
expenses
|
(8.16)
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|
(9.74)
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Steam gas costs
|
(2.57)
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|
(2.14)
|
|
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Electricity
|
(1.31)
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|
(1.50)
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Production and ad valorem
taxes
|
(1.10)
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|
(1.60)
|
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Gathering and
transportation
|
(1.23)
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|
(0.91)
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Oil and gas related
DD&A
|
(15.33)
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|
(11.49)
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Gross margin (GAAP)
|
20.41
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|
3.93
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Oil and gas related
DD&A
|
15.33
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|
11.49
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Realized (losses) gains on derivative
instruments(2)
|
(1.62)
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12.34
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Cash margin (Non-GAAP)
|
$
34.12
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$
27.76
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|
|
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Oil and gas capital expenditures (in
thousands) (3)
|
$
223,416
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$
350,358
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(1) Cash
margin per BOE (a non-GAAP measure) is calculated by adjusting
gross margin per BOE (a GAAP measure) to include realized gains and
losses on derivative instruments and to exclude DD&A.
Management believes this presentation may be helpful to
investors as it represents the cash generated by our oil and gas
production that is available for, among other things, capital
expenditures and debt service. PXP management uses this
information to analyze operating trends for comparative purposes
within the industry. This measure is not intended to replace
the GAAP statistic but rather to provide additional information
that may be helpful in evaluating trends and performance.
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(2) The 2009
realized gain excludes all cash settlements for the $106 crude oil
puts and the $54 crude oil swaps monetized in the first quarter of
2009. Cash receipts on these instruments were $121.4 million prior
to the $1.1 billion monetization in the first quarter 2009.
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(3)
Additions to oil and gas properties reported in our
consolidated statement of cash flows differ from the accrual basis
amounts reflected above due to the timing of cash payments.
Excludes acquisitions.
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Plains Exploration & Production
Company
|
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|
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Reconciliation of GAAP to Non-GAAP
Measure
|
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|
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|
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|
|
|
|
|
|
|
|
|
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|
Three Months Ended
March 31,
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|
2010
|
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|
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Oil
|
|
Gas
|
|
BOE
|
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|
(per
Bbl)
|
|
(per
Mcf)
|
|
|
|
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Average Realized Sales
Price
|
|
|
|
|
|
|
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Average realized price before
derivative instruments (GAAP) (1)
|
$
67.82
|
|
$
5.00
|
|
$
50.11
|
|
|
|
Realized (losses) gains on derivative
instruments
|
(4.29)
|
|
0.24
|
|
(1.62)
|
|
|
|
|
|
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|
|
|
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|
Realized cash price including
derivative settlements (non-GAAP)
|
$
63.53
|
|
$
5.24
|
|
$
48.49
|
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|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
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|
Three Months Ended
March 31,
|
|
|
|
|
|
|
|
2009
|
|
|
|
|
|
|
|
Oil
|
|
Gas
|
|
BOE
|
|
|
|
|
|
(per
Bbl)
|
|
(per
Mcf)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Realized Sales
Price
|
|
|
|
|
|
|
|
Average realized price before
derivative instruments (GAAP) (1)
|
$
35.23
|
|
$
4.19
|
|
$
31.31
|
|
|
|
Realized gains on derivative
instruments (2)
|
5.73
|
|
3.79
|
|
12.34
|
|
|
|
|
|
|
|
|
|
|
|
|
Realized cash price including
derivative settlements (non-GAAP)
|
$
40.96
|
|
$
7.98
|
|
$
43.65
|
|
|
|
|
|
|
|
|
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|
(1) Excludes
the impact of production costs and expenses and DD&A.
|
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(2) The 2009
realized gain excludes all cash settlements for the $106 crude oil
puts and the $54 crude oil swaps monetized in the first quarter of
2009. Cash receipts on these instruments were $121.4 million prior
to the $1.1 billion monetization in the first quarter 2009.
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Plains Exploration & Production
Company
|
|
|
|
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Consolidated Statements of Cash
Flows
|
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(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
(Unaudited)
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES
|
|
|
|
|
Net income
|
$
58,528
|
|
$
5,198
|
|
Items not affecting cash flows from
operating activities
|
|
|
|
|
|
Depreciation, depletion, amortization
and accretion
|
126,804
|
|
91,645
|
|
|
Deferred income tax expense
(benefit)
|
42,897
|
|
(26,131)
|
|
|
Debt extinguishment costs
|
728
|
|
10,243
|
|
|
Gain on mark-to-market derivative
contracts
|
(7,856)
|
|
(88,139)
|
|
|
Noncash compensation
|
16,900
|
|
14,499
|
|
|
Other noncash items
|
1,371
|
|
1,826
|
|
Change in assets and liabilities from
operating activities
|
(17,594)
|
|
(38,492)
|
|
Net cash provided by (used in)
operating activities
|
221,778
|
|
(29,351)
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES
|
|
|
|
|
Additions to oil and gas
properties
|
(267,015)
|
|
(416,350)
|
|
Acquisition of oil and gas properties
(1)
|
51,065
|
|
-
|
|
Derivative settlements
|
(9,460)
|
|
1,294,157
|
|
Additions to other property and
equipment
|
(2,137)
|
|
(5,819)
|
|
Net cash (used in) provided by
investing activities
|
(227,547)
|
|
871,988
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES
|
|
|
|
|
Borrowings from revolving credit
facilities
|
625,935
|
|
2,240,090
|
|
Repayments of revolving credit
facilities
|
(855,935)
|
|
(3,545,090)
|
|
Proceeds from issuance of Senior
Notes
|
300,000
|
|
337,161
|
|
Costs incurred in connection with
financing arrangements
|
(5,344)
|
|
(6,541)
|
|
Derivative settlements
|
-
|
|
1,392
|
|
Net cash provided by (used in)
financing activities
|
64,656
|
|
(972,988)
|
|
Net increase (decrease) in cash and
cash equivalents
|
58,887
|
|
(130,351)
|
|
Cash and cash equivalents, beginning
of period
|
1,859
|
|
311,875
|
|
Cash and cash equivalents, end of
period
|
$
60,746
|
|
$
181,524
|
|
|
|
|
|
|
|
|
(1) Cash
inflow in 2010 is associated with an adjustment to the final
settlement of the $1.1 billion payment in September 2009 related to
the prepayment of the Haynesville drilling carry.
|
|
|
|
|
|
|
|
|
|
Plains Exploration & Production
Company
|
|
Consolidated Balance
Sheets
|
|
(in thousands of
dollars)
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
ASSETS
|
(Unaudited)
|
|
|
|
Current Assets
|
|
|
|
|
|
Cash and cash equivalents
|
$
60,746
|
|
$
1,859
|
|
|
Accounts receivable
|
193,368
|
|
258,585
|
|
|
Commodity derivative
contracts
|
24,728
|
|
11,952
|
|
|
Inventories
|
17,871
|
|
19,934
|
|
|
Prepaid expenses and other current
assets
|
25,626
|
|
14,305
|
|
|
|
|
|
322,339
|
|
306,635
|
|
Property and Equipment, at
cost
|
|
|
|
|
|
Oil and natural gas properties - full
cost method
|
|
|
|
|
|
|
Subject to amortization
|
9,403,577
|
|
9,044,146
|
|
|
|
Not subject to amortization
|
3,143,352
|
|
3,279,537
|
|
|
Other property and
equipment
|
127,804
|
|
125,667
|
|
|
|
|
|
12,674,733
|
|
12,449,350
|
|
|
Less allowance for depreciation,
depletion, amortization and impairment
|
(5,736,965)
|
|
(5,616,628)
|
|
|
|
|
|
6,937,768
|
|
6,832,722
|
|
Goodwill
|
535,237
|
|
535,237
|
|
Other Assets
|
61,314
|
|
60,137
|
|
|
|
|
|
$
7,856,658
|
|
$
7,734,731
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current Liabilities
|
|
|
|
|
|
Accounts payable
|
$
196,662
|
|
$
248,454
|
|
|
Commodity derivative
contracts
|
54,322
|
|
59,176
|
|
|
Royalties and revenues
payable
|
77,351
|
|
78,590
|
|
|
Interest payable
|
50,542
|
|
45,743
|
|
|
Deferred income taxes
|
109,126
|
|
153,473
|
|
|
Other current liabilities
|
87,320
|
|
97,115
|
|
|
|
|
|
575,323
|
|
682,551
|
|
Long-Term Debt
|
2,720,962
|
|
2,649,689
|
|
|
|
|
|
|
|
|
|
Other Long-Term
Liabilities
|
|
|
|
|
|
Asset retirement obligation
|
218,634
|
|
214,231
|
|
|
Other
|
50,578
|
|
55,531
|
|
|
|
|
|
269,212
|
|
269,762
|
|
Deferred Income Taxes
|
1,020,719
|
|
933,748
|
|
Stockholders'
Equity
|
|
|
|
|
|
Common stock
|
1,439
|
|
1,439
|
|
|
Additional paid-in capital
|
3,361,383
|
|
3,381,566
|
|
|
Retained earnings
|
106,517
|
|
51,204
|
|
|
Treasury stock, at cost
|
(198,897)
|
|
(235,228)
|
|
|
|
|
|
3,270,442
|
|
3,198,981
|
|
|
|
|
|
$
7,856,658
|
|
$
7,734,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plains Exploration & Production
Company
|
|
|
|
|
|
|
|
Summary of Open Derivative
Positions
|
|
|
|
|
|
|
|
|
At April 30, 2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Instrument
|
|
Daily
|
|
Average
|
|
Deferred
|
|
|
|
Period
(1)
|
|
Type
|
|
Volumes
|
|
Price
(2)
|
|
Premium
|
|
Index
|
|
Sales of Crude Oil
Production
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Apr - Dec
|
|
Put
options
|
|
40,000
Bbls
|
|
$55.00 Strike
price
|
|
$5.00 per Bbl
(3)
|
|
WTI
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
Jan - Dec
|
|
Put options
(4)
|
|
31,000
Bbls
|
|
$80.00 Floor with
a $60.00 Limit
|
|
$5.023 per
Bbl
|
|
WTI
|
|
|
Jan - Dec
|
|
Three-way collars
(5)
|
|
9,000
Bbls
|
|
$80.00 Floor with
a $60.00 Limit
|
|
$1.00 per
Bbl
|
|
WTI
|
|
|
|
|
|
|
|
$110.00
Ceiling
|
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
Jan - Dec
|
|
Put options
(4)
|
|
40,000
Bbls
|
|
$80.00 Floor with
a $60.00 Limit
|
|
$6.087 per
Bbl
|
|
WTI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Natural Gas
Production
|
|
|
|
|
|
|
|
|
|
2010
|
|
|
|
|
|
|
|
|
|
|
|
|
Apr - Dec
|
|
Three-way collars
(6)
|
|
85,000
MMBtu
|
|
$6.12 Floor with a
$4.64 Limit
|
|
$0.034 per
MMBtu
|
|
Henry
Hub
|
|
|
|
|
|
|
|
|
$8.00
Ceiling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) All of
our derivative instruments are settled monthly.
|
|
(2) The
average strike prices do not reflect the cost to purchase the put
options or collars.
|
|
(3) In
addition to the deferred premium, a premium averaging $3.86 per
barrel was paid upon entering into these derivative contracts.
|
|
(4) If the
index price is less than the $80 per barrel floor, we receive the
difference between the $80 per barrel floor and the index price up
to a maximum of $20 per barrel less the option premium. If the
index price is at or above $80 per barrel, we pay only the option
premium.
|
|
(5) If the
index price is less than the $80 per barrel floor, we receive the
difference between the $80 per barrel floor and the index price up
to a maximum of $20 per barrel less the option premium. We pay the
difference between the index price and $110 per barrel plus the
option premium if the index price is greater than the $110 per
barrel ceiling. If the index price is at or above $80 per barrel
but at or below $110 per barrel, we pay only the option premium.
|
|
(6) If the
index price is less than the $6.12 per MMBtu floor, we receive the
difference between the $6.12 per MMBtu floor and the index price up
to a maximum of $1.48 per MMBtu less the option premium. We
pay the difference between the index price and $8.00 per MMBtu plus
the option premium if the index price is greater than the $8.00
ceiling.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plains Exploration & Production Company
Reconciliation of GAAP to Non-GAAP Measure
The following table reconciles net income (GAAP) to adjusted net
income (non-GAAP) for the three months ended March 31, 2010 and 2009. Adjusted net income
excludes certain items affecting the comparability of operating
results and the related tax effects. Management believes this
presentation may be helpful to investors. PXP management uses
this information to analyze operating trends and for comparative
purposes within the industry. This measure is not intended to
replace the GAAP statistic but rather to provide additional
information that may be helpful in evaluating the Company's
operational trends and performance.
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (GAAP)
|
|
|
|
|
|
$
58.5
|
|
$
5.2
|
|
|
Unrealized gain on
mark-to-market
derivative contracts
|
|
|
(7.9)
|
|
(88.1)
|
|
|
Realized (loss) gain on
mark-to-market
derivative contracts (1)
(2)
|
|
(12.4)
|
|
89.8
|
|
|
Legal recovery
|
|
|
|
|
|
(8.4)
|
|
-
|
|
|
Adjust income taxes (3)
|
|
|
|
|
13.7
|
|
3.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
(non-GAAP)
|
|
|
|
|
$
43.5
|
|
$
10.0
|
|
|
|
|
|
|
|
|
|
|
(1) The 2009
realized gain excludes all cash settlements for the $106 crude oil
puts and the $54 crude oil swaps monetized in the first quarter of
2009. Cash receipts on these instruments were $121.4 million prior
to the $1.1 billion monetization in the first quarter 2009.
|
|
(2) The
amounts presented in the above table differ from the adjustments
reflected in the calculation of operating cash flow on the
following page due to the accrued amounts reflected in the income
statement versus the actual cash received or paid reflected in the
consolidated statement of cash flows.
|
|
(3) Tax
rates assumed based upon adjusted earnings are 44% and 73% for the
three months ended March 31, 2010 and 2009, respectively. Tax rates
exclude the effects of nonrecurring tax related expenses and
benefits.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plains Exploration & Production Company
Reconciliation of GAAP to Non-GAAP Measure
The following tables reconcile Net Cash Provided by Operating
Activities (GAAP) to Operating Cash Flow (non-GAAP) for the three
months ended March 31, 2010 and 2009.
Management believes this presentation may be useful to
investors. PXP management uses this information for
comparative purposes within the industry and as a means of
measuring the Company's ability to fund capital expenditures and
service debt. This measure is not intended to replace the GAAP
statistic but rather to provide additional information that may be
helpful in evaluating the Company's operational trends and
performance.
Operating cash flow is calculated by adjusting net income to add
back certain non-cash and non-operating items, including unrealized
gains on mark-to-market derivative contracts, to include derivative
cash settlements for realized gains and losses on mark-to-market
derivative contracts that are classified as either investing or
financing activities for GAAP purposes and to exclude certain
items.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
(millions of
dollars)
|
|
|
Net income
|
|
$
58.5
|
|
$
5.2
|
|
|
Items not affecting operating cash
flows
|
|
|
|
|
|
Depreciation, depletion,
amortization and accretion
|
126.8
|
|
91.6
|
|
|
Deferred income tax expense
(benefit)
|
42.9
|
|
(26.1)
|
|
|
Debt extinguishment
costs
|
0.7
|
|
10.2
|
|
|
Unrealized gain on
mark-to-market derivative contracts
|
(7.8)
|
|
(88.1)
|
|
|
Noncash compensation
|
16.9
|
|
14.5
|
|
|
Other noncash items
|
1.4
|
|
1.8
|
|
|
Realized (loss) gain on
mark-to-market derivatives contracts (1)
|
(9.5)
|
|
99.8
|
|
|
Other income items
|
(8.4)
|
|
-
|
|
|
Current income taxes
attributable to derivative contracts
|
4.7
|
|
55.8
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flow
(non-GAAP)
|
$
226.2
|
|
$
164.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of non-GAAP to GAAP
measure
|
|
|
|
|
|
|
Operating cash flow
(non-GAAP)
|
$
226.2
|
|
$
164.7
|
|
|
|
Other income items
|
8.4
|
|
-
|
|
|
|
Changes in assets and liabilities from
operating activities
|
(17.6)
|
|
(38.5)
|
|
|
|
Realized loss (gain) on mark-to-market
derivative contracts (1)
|
9.5
|
|
(99.8)
|
|
|
|
Current income taxes attributable to
derivative contracts
|
(4.7)
|
|
(55.8)
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in)
operating activities (GAAP)
|
$
221.8
|
|
$
(29.4)
|
|
|
|
|
|
|
|
|
|
|
(1) The 2009
realized gain excludes all cash settlements for the $106 crude oil
puts and the $54 crude oil swaps monetized in the first quarter of
2009. Cash receipts on these instruments were $121.4 million prior
to the $1.1 billion monetization in the first quarter 2009.
|
|
|
|
|
|
|
|
|
|
Plains Exploration & Production
Company
|
|
|
|
|
Derivative Settlements
|
|
|
|
|
(in thousands of
dollars)
|
|
|
|
|
|
|
|
|
|
|
The following tables reflect cash
(payments) receipts for derivatives attributable to the
stated
|
|
production periods.
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
Oil sales (1)
|
$
(17,466)
|
|
$
25,492
|
|
|
Natural gas
sales
|
5,089
|
|
64,312
|
|
|
|
|
|
|
|
|
|
$
(12,377)
|
|
$
89,804
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of monetized derivatives
(2)
|
2010
|
|
2009
|
|
|
First quarter
|
$
123,730
|
|
$
57,211
|
|
|
Second quarter
|
125,105
|
|
167,943
|
|
|
Third quarter
|
126,479
|
|
169,788
|
|
|
Fourth quarter
|
126,479
|
|
169,788
|
|
|
|
$
501,793
|
|
$
564,730
|
|
|
|
|
|
|
|
(1) Excludes
all cash settlements for the $106 crude oil puts and the $54 crude
oil swaps monetized in the first quarter of 2009. Cash receipts on
these instruments were $121.4 million prior to the $1.1 billion
monetization in the first quarter 2009.
|
|
(2)
Represents the net receipts for derivatives monetized in the
first quarter of 2009 attributable to these production periods, net
of accrued interest on our deferred premiums.
|
|
|
|
|
|
|
|
|
|
SOURCE Plains Exploration & Production Company