HOUSTON, Jan. 31, 2011 /PRNewswire/ -- Plains Exploration
& Production Company (NYSE: PXP) ("PXP" or the "Company") today
reported preliminary 2010 operational results.
PROVED RESERVES & PRODUCTION
Year-end estimated proved reserves of 416.1 million BOE were 54%
oil and 46% natural gas. Further, estimated proved reserves were
57% developed and 43% undeveloped. The estimated reserves are based
on the twelve-month average West Texas Intermediate oil price of
$79.43 per barrel and Henry Hub
natural gas price of $4.38 per
million British thermal units. A detailed breakdown of reserves and
costs incurred for 2010 will be provided when PXP reports full-year
results on February 24, 2011. The
following table provides a summary reconciliation of the Company's
proved reserves.
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Proved Reserves
(MMBOE):
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2009 Year-end estimated proved
reserves
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359.5
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2010 Extensions, discoveries and
other additions
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78.5
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2010 Revisions
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20.0
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2010 Divestments
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(9.3)
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2010 Production
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(32.6)
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2010 Year-end estimated proved
reserves
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416.1
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Reserve replacement ratio
(1)
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302%
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Calculation: Reserve extensions,
discoveries, other additions,
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and revisions divided by
production.
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(1) The Reserve
Replacement Ratio is an indicator of our ability
to replace annual production volume and grow our reserves. It is
important to economically find and develop new reserves that will
offset produced volumes and provide for future production given the
inherent decline of hydrocarbon reserves as they are produced.
This statistical indicator has limitations, including its
predictive and comparative value. As such, this metric should not
be considered in isolation or as a substitute for an analysis of
our performance as reported under GAAP. Furthermore, this metric
may not be comparable to similarly titled measurements used by
other companies.
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PXP's 2010 fourth-quarter daily sales volumes averaged
approximately 93,000 BOE per day, a 3% increase over 2010
third-quarter average volumes and a 9% increase over first-quarter
2010 average daily volumes.
PXP's 2010 full-year daily sales volumes averaged approximately
88,500 BOE per day, a 7% increase over full-year 2009.
OPERATIONAL UPDATE
- In our core California asset
area, PXP maintained average daily sales volumes of approximately
40,000 BOE per day throughout 2010 and expects a 3% to 5% increase
throughout 2011. California is
PXP's largest asset area with approximately 211 million BOE of
proved reserves at year-end 2010 of which over 95% is oil. With
a large resource inventory identified in the San Joaquin Valley, the Arroyo Grande Field,
and the Los Angeles Basin, these
asset areas will sustain multi-year drilling programs providing
future reserves, production and free cash flow.
- In the Haynesville Shale, PXP continues to experience
outstanding drilling results. Fourth-quarter average daily
sales volumes of approximately 146 million cubic feet equivalent
(MMCFE) net to PXP reflect a 65% increase from the first-quarter
2010. Sales volumes are expected to continue to increase to
approximately 160 MMCFE net per day by year-end 2011. PXP's primary
operator is currently operating 31 rigs and expects to operate an
average of 25 rigs in 2011, plus PXP expects 15 or more rigs by
other operators on its acreage. As of year-end 2010, PXP has
established held-by-production status on over 65% of its core area
acreage through 586 production units consisting of producing wells,
wells waiting on completion, and wells currently drilling.
- In the Texas Panhandle,
fourth-quarter average daily sales volumes of approximately 8,000
BOE per day net to PXP reflect a 66% increase from the first
quarter of 2010. Sales volumes are expected to increase to
approximately 17,000 BOE net per day by year-end 2011. PXP is
currently operating 5 rigs drilling horizontal development wells in
the prolific Granite Wash trend and expects to continue this level
of activity through 2011.
- In our recently acquired Eagle Ford asset area, PXP has 4
drilling rigs operating and 12 additional wells waiting on
completion or connection to pipelines. Four of these completed
wells are scheduled to begin producing shortly for an expected
first quarter net exit rate in excess of 2,500 barrels of oil per
day (BOPD), an increase from our current net sales volume rate of
approximately 1,800 BOPD. Sales volumes are expected to increase to
approximately 5,000 BOPD net by year-end 2011.
DEPRECIATION, DEPLETION AND AMORTIZATION
Fourth-quarter depreciation, depletion and amortization
(DD&A) is expected to be $18.00
per BOE. For the full-year 2010, DD&A is expected to be
$16.52 per BOE which is within the
2010 full-year guidance range of $16.00 -
$18.00 per BOE.
For the full-year 2011, PXP estimates DD&A expense to be
$16.00 to $18.00 per BOE. The 2011
full-year financial and operational guidance is included at the end
of this release.
2010 EARNINGS CONFERENCE CALL
PXP is scheduled to release 2010 fourth-quarter and year-end
results on Thursday, February 24,
2011 before the market opens and will host its quarterly
conference call that same day 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: 36795961. The replay can be
accessed by dialing 1-800-642-1687 or 1-706-645-9291. A live
webcast of the conference call and a slide presentation 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,
* 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.
Plains Exploration &
Production Company
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Full-Year 2011 Operating and
Financial Guidance
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Year
Ended
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December 31,
2011
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Production Volumes
(MBOE/day)
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Production volumes
sold
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95.0
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—
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100.0
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% Oil
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50%
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—
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52%
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% Gas
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50%
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—
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48%
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Price Realization % Index
(Unhedged)
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Oil - NYMEX
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84%
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—
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86%
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Gas - Henry Hub
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93%
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—
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95%
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Production Costs per
BOE
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Lease operating
expense
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$ 7.90
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—
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$
8.30
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Steam gas costs (1)
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$ 1.90
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—
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$
2.85
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Electricity
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$ 1.20
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—
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$
1.50
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Production and ad valorem taxes
(2)
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$ 1.70
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—
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$
2.00
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Gathering and
transportation
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$ 1.90
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—
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$
2.10
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Depreciation, Depletion and
Amortization per BOE
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$ 16.00
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—
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$
18.00
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General and Administrative
Expenses (in millions)
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Cash
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$
96
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—
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$
101
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Stock based compensation
(3)
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$
38
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—
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$
43
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Interest Expense
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Average revolver
balance
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30 Day LIBOR
+ 1.75%—2.75%
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$600 Million Senior
Notes
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7.750%
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$565 Million Senior
Notes
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10.000%
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$500 Million Senior
Notes
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7.000%
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$400 Million Senior
Notes
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7.625%
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$400 Million Senior
Notes
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8.625%
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$300 Million Senior
Notes
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7.625%
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Effective Tax
Rate
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42%
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—
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44%
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Weighted Average Equivalent
Shares Outstanding (in thousands)
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Basic
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141,600
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Diluted
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142,900
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Targeted Capital Expenditures
(in millions) (4)
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$
1,200
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Derivative
Instruments
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Crude Oil Put options-2011
(5)
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Bbls / day
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31,000
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Floor
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$80.00
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Floor Limit
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$60.00
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Option premium and interest
($/Bbl)
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$5.023
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Crude Oil Three-way
Collars - 2011 (6)
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Bbls / day
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9,000
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Ceiling
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$110.00
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Floor
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$80.00
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Floor Limit
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$60.00
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Option premium and interest
($/Bbl)
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$1.00
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Crude Oil Put options-2012
(5)
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Bbls / day
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40,000
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Floor
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$80.00
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Floor Limit
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$60.00
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Option premium and interest
($/Bbl)
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$6.087
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Natural Gas Three-way
Collars - 2011 (7)
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MMBtu / day
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200,000
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Ceiling
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$4.92
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Floor
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$4.00
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Floor Limit
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$3.00
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Option premium and interest
($/MMBtu)
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-
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Natural Gas Put
options-2012 (8)
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MMBtu / day
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160,000
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Floor
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$4.30
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Floor Limit
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$3.00
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Option premium and interest
($/MMBtu)
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$0.294
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(1)
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Steam gas costs assume a base
SoCal Border index price of $4.81 per MMBtu. The purchased
volumes are anticipated to be 42,000 - 45,000 MMBtu per day.
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(2)
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Production and ad valorem taxes
assume base index prices of $85.00 per barrel and $5.00 per MMBtu.
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(3)
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Based on current outstanding and
projected awards and current stock price.
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(4)
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Includes capitalized interest
and general and administrative expenses.
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(5)
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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.
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(6)
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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.
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(7)
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If the index price is less than
the $4.00 per MMBtu floor, we receive the difference between the
$4.00 per MMBtu floor and the index price up to a maximum of $1.00
per MMBtu. We pay the difference between the index price and
$4.92 per MMBtu if the index price is greater than the $4.92 per
MMBtu ceiling. If the index price is at or above $4.00 per
MMBtu but at or below $4.92 per MMBtu, no cash settlement is
required.
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(8)
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If the index price is less than
the $4.30 per MMBtu floor, we receive the difference between the
$4.30 per MMBtu floor and the index price up to a maximum of $1.30
per MMBtu less the option premium. If the index price is at
or above $4.30 per MMBtu, we pay only the option premium.
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SOURCE Plains Exploration & Production Company