HOUSTON, Oct. 5 /PRNewswire-FirstCall/ -- Plains
Exploration & Production Company (NYSE: PXP) ("PXP" or the
"Company") provides an operational update and announces a
significant acquisition in the Eagle Ford oil shale trend.
OPERATIONAL UPDATE
- PXP's average daily sales volumes are estimated to be 89
thousand barrels of oil equivalent (BOE) per day for the third
quarter 2010, up approximately 5% from 85 thousand BOE per day in
the second quarter 2010.
- In the Texas Panhandle Granite Wash development, PXP is
currently operating 5 rigs drilling horizontal wells to develop its
inventory of over 150 potential locations. PXP plans to spud up to
19 horizontal wells in 2010 and over 25 wells in 2011. Three wells
have been drilled, completed and are producing, and 3 additional
wells are waiting on completion.
- In California, PXP continues
to develop its onshore projects in both the Los Angeles Basin and the San Joaquin Basin. During the second half of
2010, PXP plans to drill up to 40 wells in the San Joaquin Valley and up to 20 wells in the
Los Angeles Basin. As anticipated,
the Company recently received project approval from the California
Division of Oil, Gas and Geothermal Resources for PXP's next phase
of its diatomite development in the Cymric Field.
EAGLE FORD ACQUISITION
PXP has agreed to acquire interests in approximately 60,000 net
acres in the Eagle Ford oil and gas condensate windows in
South Texas for $578 million in cash. Of the 60,000 net acres,
approximately 20,400 net acres are located in a joint operating
area between PXP and EOG Resources, Inc. (NYSE: EOG). The Eagle
Ford properties are located primarily in Karnes County of South Texas and have net resource potential of
approximately 140 to 175 million BOE, projected net production
capability of approximately 2,000 BOE per day and a year-end 2011
production target exit rate of approximately 5,000 BOE per day net
to PXP.
James C. Flores, Chairman,
President and CEO of PXP commented, "We are pleased to announce
this significant acquisition which enables us to aggressively
expand our large, high-margin onshore oil business. The Eagle Ford
transaction adds a high-quality oil asset with substantial reserve
and oil production growth opportunities to PXP's existing domestic
oil resource position. As part of our focused oil growth strategy,
PXP will operate substantially all of its oil assets, maintain
total company liquids volumes between 50% and 60% of total
production, and continue to deploy a hedge strategy to protect our
cash flows."
The Eagle Ford oil shale acquisition is expected to close during
the fourth-quarter 2010, subject to customary closing conditions
and adjustments, with an effective date of September 1, 2010. J.P. Morgan provided financial
advisory services related to the acquisition. As previously
announced, the data room process for the planned Gulf of Mexico deepwater divestment is
underway with final bids expected in late-October to mid-November.
PXP expects the divestment to close by year-end 2010. Barclays
Capital and Jefferies & Company are assisting PXP in the
Gulf of Mexico deepwater
divestment.
CONFERENCE CALL
PXP will host a conference call today, October 5, 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 14439786. The replay 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:
* completion of the proposed transaction,
* value and completion of the proposed Gulf of Mexico divestments,
* reserve and production estimates,
* oil and gas prices,
* cash flow estimates,
* future financial performance,
* capital and credit market conditions,
* planned capital expenditures, and
* other matters that are discussed in PXP's filings with the
SEC.
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.
SOURCE Plains Exploration & Production Company
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