HOUSTON, Feb. 24, 2011 /PRNewswire/ -- Plains Exploration
& Production Company (NYSE: PXP) ("PXP" or the "Company")
announces 2010 fourth-quarter and full-year financial and operating
results.
Fourth-Quarter Statistical Highlights
- Revenues of $408.1 million and
net loss of $19.5 million, or
$0.14 per diluted share.
- Adjusted net income of $28.3 million, or
$0.20 per diluted share (a non-GAAP
measure).
- Net cash provided by operating activities of $235.3 million.
- Operating cash flow of $253.6 million (a
non-GAAP measure).
- Average daily sales volumes of 93,000 barrels of oil
equivalent (BOE).
Full-Year Statistical Highlights
- Revenues of $1.5 billion and
net income of $103.3 million, or
$0.73 per diluted share.
- Adjusted net income of $150.2
million, or $1.06 per diluted
share (a non-GAAP measure).
- Net cash provided by operating activities of $912.5 million, an 83% increase
year-over-year.
- Operating cash flow of $976.7
million, a 4% increase year-over-year (a non-GAAP
measure).
- Total production costs per BOE of $14.00.
- Average daily sales volumes of 88,500 BOE, a 7% increase
year-over-year.
- Proved reserves of 416.1 million BOE, a 16% increase
year-over-year.
- All-in finding and development costs of $17.69 per BOE.
- Finding and development costs, excluding acquisition costs,
of $11.15 per BOE (a non-GAAP
measure).
- Reserve replacement ratio of 302%.
PXP reported fourth-quarter revenues of $408.1 million and a net loss of $19.5 million, or $0.14 per diluted share, compared to revenues of
$367.7 million and net income of
$48.1 million, or $0.34 per diluted share, for the fourth-quarter
2009.
The fourth-quarter net loss includes certain items affecting the
comparability of operating results. Those items consist of realized
and unrealized gains and losses on our mark-to-market derivative
contracts and other items. When considering these items, PXP
reports net income of $28.3 million,
or $0.20 per diluted share (a
non-GAAP measure).
PXP reported full-year revenues of $1.5
billion and net income of $103.3
million, or $0.73 per diluted
share, compared to revenues of $1.2
billion and net income of $136.3
million, or $1.09 per diluted
share, for the full-year 2009.
Full-year 2010 net income includes certain items affecting the
comparability of operating results. Those items consist of realized
and unrealized gains and losses on our mark-to-market derivative
contracts, an impairment of our Vietnam properties, a legal recovery, and
other items. When considering these items, PXP reports net income
for 2010 of $150.2 million, or
$1.06 per diluted share (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.
MANAGEMENT COMMENT
James C. Flores, Chairman,
President and CEO of PXP commented, "The fourth-quarter and
full-year financial and operational results highlight the sound
execution of our strategic plan and high-quality asset base. We
navigated a challenging business environment by, once again,
applying experience and innovation and remaining focused on our
long-term goal of value creation. We safely grew production and
reserves, increased operating cash flow, strengthened our financial
position, lowered portfolio geologic risk and aggressively expanded
our onshore oil resource potential.
"In response to market conditions related to the Gulf of Mexico drilling moratorium and as part
of our ongoing portfolio optimization, we initiated a rigorous
strategic evaluation of our Gulf of
Mexico operations and determined the greatest benefit to our
shareholders was to adjust our long-term operational plan to an
onshore versus offshore oil growth strategy. We followed through
and successfully acquired a significant position in the prolific
South Texas Eagle Ford Shale play and reduced our Gulf of Mexico expenses and long lead-time
capital requirements, yet retained upside exposure, by divesting
our shelf assets in exchange for a combination of cash and a
significant equity position in the well-capitalized McMoRan
Exploration Co. The transaction was valued at over $900 million, based on December 30, 2010 closing stock price. Our
previously announced deepwater portfolio divestment aimed at
optimizing the value of those assets remains in process.
"With continued crude oil price strength, countered by slowly
improving economic sentiment and persistently, low natural gas
prices, we remain mindful of the importance to stay balanced
between oil and natural gas, to protect our balance sheet and to
continuously improve operating efficiencies. For 2010, we
maintained our production costs relative to 2009 on a per unit
basis and opportunistically entered into 2011 and 2012 crude oil
and natural gas derivatives to protect the Company's future cash
flows. We ended the year with no near-term debt maturities and
approximately $779 million available
under our revolving credit facility.
"Our balanced, low-risk portfolio of assets, our increased
exposure to onshore oil-liquids focused development, and our
ongoing hedging program will serve us well in the volatile
commodity price environment and allow future potential upside.
These attributes, combined with our financial position and skilled
and dedicated workforce, are the catalysts positioning our program
to grow reserves 15% to 20% and production 10% to 15% per year on
average over the next 5 years."
PROVED RESERVES
Year-end estimated proved reserves of 416.1 million BOE were 54%
oil and 46% natural gas and 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.
In 2010, PXP added total proved reserves of 98.5 million BOE.
These additions replaced 302% of 2010 production at a cost of
$17.69 per BOE. Finding and
development costs, excluding acquisition costs which primarily
reflect the Eagle Ford property acquisition, were $11.15 per BOE.
In 2010, we had a total of 77 million BOE of extensions and
discoveries, including 54 million BOE in the Haynesville Shale
resulting from successful drilling during 2010 that extended and
developed the proved acreage and 17 million BOE in the Panhandle
resulting from successful horizontal development of the
Granite/Atoka Wash area. Positive revisions of 20 million BOE were
primarily related to higher realized oil and gas prices, and proved
reserve additions related to interests acquired in the Eagle Ford
Shale were approximately 1 million BOE.
A summary of the Company's proved reserve reconciliation and
costs incurred for 2010 is included with the financial tables.
OPERATIONAL UPDATE
In the Eagle Ford Shale asset area, PXP has 4 drilling rigs
operating and expects to have 4 to 6 rigs drilling on its acreage
during 2011. There are 10 wells waiting on completion or connection
to pipelines. Sales volume exit rates for the first quarter are
expected to be in excess of 2,500 barrels of oil equivalent per day
(BOEPD) net to PXP and 5,000 BOEPD net by year-end 2011. Two
notable wells recently completed by PXP are as follows:
- The Julie 1H well has been completed with an initial production
rate of approximately 990 barrels of oil per day and 826 thousand
cubic feet per day.
- The Julie 2H well has been completed with an initial production
rate of approximately 920 barrels of oil per day and 756 thousand
cubic feet per day.
PXP has a 100% working interest and a 75% net revenue interest
in these wells.
In our core California asset
area, Platform Irene is shut-in for planned maintenance. The work
began mid-January and is expected to be completed by the end of the
first-quarter 2011. Onshore California, PXP continues its active
development program in the Los
Angeles and San Joaquin Basins. With a large resource
inventory identified for this asset area, it will sustain
multi-year drilling programs providing future reserves, production
and free cash flow. 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. PXP
maintained average daily sales volumes of approximately 40,000 BOE
per day throughout 2010 and expects a 3% to 5% sales volume
increase during 2011.
In the Texas Panhandle asset
area, PXP has 5 drilling rigs operating in the Granite Wash trend
and expects to continue this level of activity through 2011. There
are 7 wells waiting on completion or connection to pipelines.
Fourth-quarter average daily sales volumes were approximately 8,000
BOE per day net to PXP. Average daily sales volumes are expected to
increase to approximately 17,000 BOE net per day by year-end
2011.
In the Haynesville Shale asset area, 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. Fourth-quarter average daily sales volumes were
approximately 146 million cubic feet equivalent (MMcfe) net to PXP.
A record daily sales volume of 155.6 MMcfe net to PXP was reached
in February and average daily sales volumes are expected to
increase to approximately 160 MMcfe net per day by year-end
2011.
CONFERENCE CALL
PXP will host a conference call today, Thursday, February 24, 2011 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, and Louisiana. 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:
* the value and completion of our Gulf of Mexico deepwater divestment,
* reserve and production estimates,
* oil and gas prices,
* the impact of derivative positions,
* production expense estimates,
* 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.
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Plains Exploration &
Production Company
|
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Consolidated Statements of
Income
|
|
(in thousands, except per share
data)
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
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Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Oil sales
|
$
314,070
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|
$
277,324
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|
$ 1,142,760
|
|
$
903,146
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|
|
Gas sales
|
93,680
|
|
89,745
|
|
399,607
|
|
281,978
|
|
|
Other operating
revenues
|
379
|
|
680
|
|
2,228
|
|
2,006
|
|
|
|
|
408,129
|
|
367,749
|
|
1,544,595
|
|
1,187,130
|
|
Costs and
Expenses
|
|
|
|
|
|
|
|
|
|
Lease operating
expenses
|
74,826
|
|
56,352
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|
262,533
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|
250,916
|
|
|
Steam gas costs
|
14,283
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|
16,376
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|
66,449
|
|
53,801
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|
|
Electricity
|
11,552
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|
9,996
|
|
42,794
|
|
43,891
|
|
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Production and ad valorem
taxes
|
8,089
|
|
8,713
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|
29,446
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|
38,708
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|
|
Gathering and transportation
expenses
|
13,038
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|
10,984
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|
50,680
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|
36,651
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|
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General and
administrative
|
34,468
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|
33,520
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|
136,437
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|
144,586
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|
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Depreciation, depletion and
amortization
|
154,006
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|
126,557
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|
533,416
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|
407,248
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Impairment of oil and gas
properties
|
-
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-
|
|
59,475
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-
|
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Accretion
|
4,464
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|
3,704
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|
17,702
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|
14,332
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|
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Legal recovery
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-
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|
-
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(8,423)
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(87,272)
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Other operating expense
(income)
|
851
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|
583
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|
(4,130)
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|
2,136
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|
|
|
|
315,577
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|
266,785
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|
1,186,379
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|
904,997
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|
|
|
|
|
|
|
|
|
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|
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Income from
Operations
|
92,552
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|
100,964
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|
358,216
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|
282,133
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Other (Expense)
Income
|
|
|
|
|
|
|
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|
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Interest expense
|
(31,107)
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|
(19,524)
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|
(106,713)
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|
(73,811)
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Debt extinguishment
costs
|
-
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|
-
|
|
(1,189)
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|
(12,093)
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Loss on mark-to-market
derivative contracts
|
(83,935)
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|
(20,234)
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|
(60,695)
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|
(7,017)
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|
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Other income
|
146
|
|
27,207
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|
14,391
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|
27,968
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(Loss) Income Before Income
Taxes
|
(22,344)
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|
88,413
|
|
204,010
|
|
217,180
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|
|
Income tax benefit
(expense)
|
|
|
|
|
|
|
|
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|
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Current
|
25,331
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|
(11,334)
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|
93,090
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|
(45,091)
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Deferred
|
(22,473)
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|
(28,947)
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|
(193,835)
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|
(35,784)
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Net (Loss) Income
|
$
(19,486)
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|
$
48,132
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|
$
103,265
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|
$
136,305
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(Loss) Earnings per
Share
|
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Basic
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$
(0.14)
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$
0.34
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|
$
0.74
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|
$
1.10
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Diluted
|
$
(0.14)
|
|
$
0.34
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|
$
0.73
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|
$
1.09
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Weighted Average Shares
Outstanding
|
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Basic
|
140,836
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|
139,587
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|
140,438
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|
124,405
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Diluted
|
140,836
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|
140,973
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|
141,897
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|
125,288
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Plains Exploration &
Production Company
|
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Operating Data
(Unaudited)
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|
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Three Months
Ended
|
|
Twelve
Months Ended
|
|
|
|
|
|
December
31,
|
|
December
31,
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2010
|
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2009
|
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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)
|
46,658
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46,890
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|
45,943
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|
48,110
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Gas (Mcf)
|
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Production
|
283,447
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242,687
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260,402
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214,203
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Used as fuel
|
5,428
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|
5,819
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|
5,353
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|
6,461
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Sales
|
278,019
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|
236,868
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|
255,049
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|
207,742
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BOE
|
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|
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Production
|
93,899
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|
87,338
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|
89,343
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|
83,811
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|
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Sales
|
92,994
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|
86,368
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|
88,451
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|
82,734
|
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Unit Economics (in
dollars)
|
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Average NYMEX Prices
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Oil
|
$ 85.24
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|
$ 76.13
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|
$
79.61
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|
$
62.09
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|
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Gas
|
3.81
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|
4.16
|
|
4.38
|
|
3.97
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Average Realized Sales Price
Before Derivative Transactions
|
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Oil (per Bbl)
|
$ 73.17
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|
$ 64.28
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|
$
68.14
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|
$
51.43
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Gas (per Mcf)
|
3.66
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|
4.12
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|
4.29
|
|
3.72
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|
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Per BOE
|
47.66
|
|
46.20
|
|
47.77
|
|
39.25
|
|
|
Cash Margin per BOE
(1)
|
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Oil and gas revenues
|
$ 47.66
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|
$ 46.20
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|
$
47.77
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|
$
39.25
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|
|
Costs and expenses
|
|
|
|
|
|
|
|
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|
|
Lease operating
expenses
|
(8.75)
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|
(7.09)
|
|
(8.13)
|
|
(8.31)
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|
|
Steam gas
costs
|
(1.67)
|
|
(2.06)
|
|
(2.06)
|
|
(1.78)
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|
|
Electricity
|
(1.35)
|
|
(1.26)
|
|
(1.33)
|
|
(1.45)
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|
|
|
Production and ad valorem
taxes
|
(0.95)
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|
(1.10)
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|
(0.91)
|
|
(1.28)
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|
|
|
Gathering and
transportation
|
(1.52)
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|
(1.38)
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|
(1.57)
|
|
(1.21)
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|
|
|
Oil and gas related
DD&A
|
(17.37)
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|
(15.33)
|
|
(15.87)
|
|
(12.79)
|
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|
|
Gross margin (GAAP)
|
16.05
|
|
17.98
|
|
17.90
|
|
12.43
|
|
|
|
|
Oil and gas related
DD&A
|
17.37
|
|
15.33
|
|
15.87
|
|
12.79
|
|
|
|
|
Realized (losses) gains on
derivative instruments (2)
|
(0.77)
|
|
8.19
|
|
(1.02)
|
|
10.30
|
|
|
|
Cash margin
(Non-GAAP)
|
$ 32.65
|
|
$ 41.50
|
|
$
32.75
|
|
$
35.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and gas capital expenditures
accrued ($
in thousands) (3)
|
$ 300,895
|
|
$ 333,168
|
|
$ 1,082,246
|
|
$ 1,582,216
|
|
|
|
|
|
|
|
|
|
|
|
|
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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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|
|
|
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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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|
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|
|
|
|
|
|
|
|
Plains Exploration &
Production Company
|
|
|
|
|
|
|
Reconciliation of GAAP to
Non-GAAP Measure
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, 2010
|
|
|
|
Oil
|
|
Gas
|
|
BOE
|
|
|
|
(per
Bbl)
|
|
(per
Mcf)
|
|
|
|
|
|
|
|
|
|
|
|
Average Realized Sales
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price before
derivative instruments (GAAP) (1)
|
$ 73.17
|
|
$
3.66
|
|
$ 47.66
|
|
|
Realized (losses) gains on
derivative instruments
|
(4.16)
|
|
0.44
|
|
(0.77)
|
|
|
|
|
|
|
|
|
|
Realized cash price including
derivative settlements (non-GAAP)
|
$ 69.01
|
|
$
4.10
|
|
$ 46.89
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended December 31, 2009
|
|
|
|
Oil
|
|
Gas
|
|
BOE
|
|
|
|
(per
Bbl)
|
|
(per
Mcf)
|
|
|
|
|
|
|
|
|
|
|
|
Average Realized Sales
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price before
derivative instruments (GAAP) (1)
|
$ 64.28
|
|
$
4.12
|
|
$ 46.20
|
|
|
Realized (losses) gains on
derivative instruments
|
(2.13)
|
|
3.41
|
|
8.19
|
|
|
|
|
|
|
|
|
|
Realized cash price including
derivative settlements (non-GAAP)
|
$ 62.15
|
|
$
7.53
|
|
$ 54.39
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended December 31, 2010
|
|
|
|
Oil
|
|
Gas
|
|
BOE
|
|
|
|
(per
Bbl)
|
|
(per
Mcf)
|
|
|
|
Average Realized Sales
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price before
derivative instruments (GAAP) (1)
|
$ 68.14
|
|
$
4.29
|
|
$ 47.77
|
|
|
Realized (losses) gains on
derivative instruments
|
(4.22)
|
|
0.41
|
|
(1.02)
|
|
|
|
|
|
|
|
|
|
Realized cash price including
derivative settlements (non-GAAP)
|
$ 63.92
|
|
$
4.70
|
|
$ 46.75
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended December 31, 2009
|
|
|
|
Oil
|
|
Gas
|
|
BOE
|
|
|
|
(per
Bbl)
|
|
(per
Mcf)
|
|
|
|
Average Realized Sales
Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price before
derivative instruments (GAAP) (1)
|
$ 51.43
|
|
$
3.72
|
|
$ 39.25
|
|
|
Realized gains on derivative
instruments (2)
|
0.17
|
|
4.06
|
|
10.30
|
|
|
|
|
|
|
|
|
|
Realized cash price including
derivative settlements (non-GAAP)
|
$ 51.60
|
|
$
7.78
|
|
$ 49.55
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Excludes the impact of
production costs and expenses and DD&A.
|
|
(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.
|
|
|
|
|
|
|
|
|
Plains Exploration &
Production Company
|
|
Consolidated Statements of Cash
Flows
|
|
(in thousands of
dollars)
|
|
|
|
Twelve
Months Ended
|
|
|
|
December
31,
|
|
|
|
2010
|
|
2009
|
|
CASH FLOWS FROM OPERATING
ACTIVITIES
|
|
|
|
|
Net income
|
$ 103,265
|
|
$ 136,305
|
|
Items not affecting cash flows
from operating activities
|
|
|
|
|
|
Depreciation, depletion,
amortization and accretion
|
551,118
|
|
421,580
|
|
|
Impairment of oil and gas
properties
|
59,475
|
|
-
|
|
|
Deferred income tax
expense
|
193,835
|
|
35,784
|
|
|
Debt extinguishment
costs
|
1,189
|
|
12,093
|
|
|
Loss on mark-to-market
derivative contracts
|
60,695
|
|
7,017
|
|
|
Non-cash compensation
|
50,875
|
|
60,490
|
|
|
Other non-cash items
|
2,594
|
|
6,950
|
|
Change in assets and liabilities
from operating activities
|
(110,576)
|
|
(181,173)
|
|
Net cash provided by operating
activities
|
912,470
|
|
499,046
|
|
CASH FLOWS FROM INVESTING
ACTIVITIES
|
|
|
|
|
Additions to oil and gas
properties
|
(1,048,858)
|
|
(1,628,357)
|
|
Acquisition of oil and gas
properties
|
(554,685)
|
|
(1,159,939)
|
|
Proceeds from sales of oil and
gas properties, net of costs and expenses
|
73,965
|
|
-
|
|
Derivative
settlements
|
(29,921)
|
|
1,522,412
|
|
Additions to other property and
equipment
|
(15,809)
|
|
(14,677)
|
|
Other
|
-
|
|
162
|
|
Net cash used in investing
activities
|
(1,575,308)
|
|
(1,280,399)
|
|
CASH FLOWS FROM FINANCING
ACTIVITIES
|
|
|
|
|
Borrowings from revolving credit
facilities
|
3,332,610
|
|
3,513,325
|
|
Repayments of revolving credit
facilities
|
(2,942,610)
|
|
(4,588,325)
|
|
Proceeds from issuance of Senior
Notes
|
300,000
|
|
916,439
|
|
Costs incurred in connection
with financing arrangements
|
(22,771)
|
|
(19,556)
|
|
Derivative
settlements
|
-
|
|
1,392
|
|
Issuance of common
stock
|
-
|
|
648,005
|
|
Other
|
184
|
|
57
|
|
Net cash provided by financing
activities
|
667,413
|
|
471,337
|
|
Net increase (decrease) in cash
and cash equivalents
|
4,575
|
|
(310,016)
|
|
Cash and cash equivalents,
beginning of period
|
1,859
|
|
311,875
|
|
Cash and cash equivalents, end
of period
|
$
6,434
|
|
$
1,859
|
|
|
|
|
|
|
Plains Exploration &
Production Company
|
|
Consolidated Balance
Sheets
|
|
(in thousands of
dollars)
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
2010
|
|
2009
|
|
ASSETS
|
|
|
|
|
Current Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
6,434
|
|
$
1,859
|
|
|
Accounts receivable
|
269,024
|
|
258,585
|
|
|
Commodity derivative
contracts
|
-
|
|
11,952
|
|
|
Inventories
|
24,406
|
|
19,934
|
|
|
Deferred income taxes
|
74,086
|
|
-
|
|
|
Prepaid expenses and other
current assets
|
28,937
|
|
14,305
|
|
|
|
|
402,887
|
|
306,635
|
|
Property and Equipment, at
cost
|
|
|
|
|
|
Oil and natural gas properties -
full cost method
|
|
|
|
|
|
|
Subject to
amortization
|
9,975,056
|
|
9,044,146
|
|
|
|
Not subject to
amortization
|
3,304,554
|
|
3,279,537
|
|
|
Other property and
equipment
|
137,150
|
|
125,667
|
|
|
|
|
13,416,760
|
|
12,449,350
|
|
|
Less allowance for depreciation,
depletion, amortization and impairment
|
(6,196,008)
|
|
(5,616,628)
|
|
|
|
|
7,220,752
|
|
6,832,722
|
|
Goodwill
|
535,144
|
|
535,237
|
|
Investment
|
664,346
|
|
-
|
|
Other Assets
|
71,808
|
|
60,137
|
|
|
|
|
$
8,894,937
|
|
$
7,734,731
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
Accounts payable
|
$
284,628
|
|
$
248,454
|
|
|
Commodity derivative
contracts
|
52,971
|
|
59,176
|
|
|
Royalties and revenues
payable
|
70,990
|
|
78,590
|
|
|
Interest payable
|
49,127
|
|
45,743
|
|
|
Deferred income taxes
|
-
|
|
153,473
|
|
|
Other current
liabilities
|
75,973
|
|
97,115
|
|
|
|
|
533,689
|
|
682,551
|
|
Long-Term Debt
|
3,344,717
|
|
2,649,689
|
|
|
|
|
|
|
|
|
Other Long-Term
Liabilities
|
|
|
|
|
|
Asset retirement
obligation
|
225,571
|
|
214,231
|
|
|
Commodity derivative
contracts
|
24,740
|
|
-
|
|
|
Other
|
28,205
|
|
55,531
|
|
|
|
|
278,516
|
|
269,762
|
|
Deferred Income
Taxes
|
1,355,050
|
|
933,748
|
|
Stockholders'
Equity
|
|
|
|
|
|
Common stock
|
1,439
|
|
1,439
|
|
|
Additional paid-in
capital
|
3,427,869
|
|
3,381,566
|
|
|
Retained earnings
|
148,620
|
|
51,204
|
|
|
Treasury stock, at
cost
|
(194,963)
|
|
(235,228)
|
|
|
|
|
3,382,965
|
|
3,198,981
|
|
|
|
|
$
8,894,937
|
|
$
7,734,731
|
|
|
|
|
|
|
|
Plains Exploration &
Production Company
|
|
Summary of Open Derivative
Positions
|
|
At January 1,
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average
|
|
|
|
|
|
|
Instrument
|
|
Daily
|
|
Average
|
|
Deferred
|
|
|
|
Period
(1)
|
|
Type
|
|
Volumes
|
|
Price
(2)
|
|
Premium
|
|
Index
|
|
Sales of Crude Oil
Production
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jan - Dec
|
|
Put options
(3)
|
|
31,000 Bbls
|
|
$80.00 Floor
with a $60.00 Limit
|
|
$5.023 per
Bbl
|
|
WTI
|
|
|
Jan - Dec
|
|
Three-way
collars (4)
|
|
9,000 Bbls
|
|
$80.00 Floor
with a $60.00 Limit
|
|
$1.00 per
Bbl
|
|
WTI
|
|
|
|
|
|
|
|
$110.00
Ceiling
|
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jan - Dec
|
|
Put options
(3)
|
|
40,000 Bbls
|
|
$80.00 Floor
with a $60.00 Limit
|
|
$6.087 per
Bbl
|
|
WTI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales of Natural Gas
Production
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jan - Dec
|
|
Three-way
collars (5)
|
|
200,000 MMBtu
|
|
$4.00 Floor
with a $3.00 Limit
|
|
-
|
|
Henry
Hub
|
|
|
|
|
|
|
|
|
$4.92
Ceiling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jan - Dec
|
|
Put options
(6)
|
|
160,000 MMBtu
|
|
$4.30 Floor
with a $3.00 Limit
|
|
$0.294 per
MMBtu
|
|
Henry
Hub
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
All of our derivatives are
settled monthly.
|
|
(2)
|
The average strike prices do not
reflect the cost to purchase the put options or collars.
|
|
(3)
|
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.
|
|
(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. 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.
|
|
(5)
|
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.
|
|
(6)
|
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.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 and twelve months ended December 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
|
|
|
|
December
31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
Net (loss) income
(GAAP)
|
$ (19.5)
|
|
$ 48.1
|
|
|
Unrealized loss on
mark-to-market derivative contracts
|
83.9
|
|
20.2
|
|
|
Realized (loss) gain on
mark-to-market derivative contracts (1)
|
(6.6)
|
|
65.1
|
|
|
Other non-operating expense
(income), net
|
1.6
|
|
(23.5)
|
|
|
Adjust income taxes
(2)
|
(31.1)
|
|
(23.3)
|
|
|
|
|
|
|
|
Adjusted net income
(non-GAAP)
|
$ 28.3
|
|
$ 86.6
|
|
|
|
|
|
|
|
|
|
Twelve
Months Ended
|
|
|
|
December
31,
|
|
|
|
2010
|
|
2009
|
|
|
|
(millions of
dollars)
|
|
|
|
|
|
|
|
Net income (GAAP)
|
$ 103.3
|
|
$ 136.3
|
|
|
Unrealized loss on
mark-to-market derivative contracts
|
60.7
|
|
7.0
|
|
|
Realized (loss) gain on
mark-to-market derivative contracts (1) (3)
|
(32.8)
|
|
311.1
|
|
|
Impairment of oil and gas
properties
|
59.5
|
|
-
|
|
|
Legal recovery
|
(8.4)
|
|
(87.3)
|
|
|
Other non-operating income,
net
|
(6.5)
|
|
(23.5)
|
|
|
Adjust income taxes
(2)
|
(25.6)
|
|
(96.0)
|
|
|
|
|
|
|
|
Adjusted net income
(non-GAAP)
|
$ 150.2
|
|
$ 247.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
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.
|
|
(2)
|
Tax rates assumed based upon
adjusted earnings are 50% and 42% for the three months ended
December 31, 2010 and 2009, respectively. Tax rates assumed based
upon adjusted earnings are 46% and 42% for the twelve months ended
December 31, 2010 and 2009. Tax rates exclude the effects of
nonrecurring tax related expenses and benefits.
|
|
(3)
|
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
|
|
|
|
|
|
|
|
|
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 and twelve months
ended December 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 and losses 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
|
|
Twelve
Months Ended
|
|
|
|
|
|
December
31,
|
|
December
31,
|
|
|
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
(millions of
dollars)
|
|
|
Net (loss) income
|
$ (19.5)
|
|
$ 48.1
|
|
$ 103.3
|
|
$ 136.3
|
|
|
Items not affecting operating
cash flows
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion,
amortization and accretion
|
158.5
|
|
130.3
|
|
551.1
|
|
421.5
|
|
|
Impairment of oil and gas
properties
|
-
|
|
-
|
|
59.5
|
|
-
|
|
|
Deferred income tax
expense
|
22.5
|
|
28.9
|
|
193.8
|
|
35.8
|
|
|
Debt extinguishment
costs
|
-
|
|
-
|
|
1.2
|
|
12.1
|
|
|
Unrealized loss on
mark-to-market derivative contracts
|
83.9
|
|
20.2
|
|
60.7
|
|
7.0
|
|
|
Non-cash
compensation
|
14.5
|
|
12.7
|
|
50.9
|
|
60.5
|
|
|
Other non-cash
items
|
0.1
|
|
2.5
|
|
2.6
|
|
7.0
|
|
|
Realized (loss) gain on
mark-to-market derivative contracts (1)
|
(6.4)
|
|
65.2
|
|
(29.9)
|
|
328.0
|
|
|
Legal recovery and
other
|
-
|
|
(23.5)
|
|
(16.5)
|
|
(110.8)
|
|
|
Current income taxes
attributable to derivative contracts
|
-
|
|
11.3
|
|
-
|
|
45.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating cash flow
(non-GAAP)
|
$ 253.6
|
|
$ 295.7
|
|
$ 976.7
|
|
$ 942.5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of non-GAAP to
GAAP measure
|
|
|
|
|
|
|
|
|
|
|
Operating cash flow
(non-GAAP)
|
$ 253.6
|
|
$ 295.7
|
|
$ 976.7
|
|
$ 942.5
|
|
|
|
Legal recovery and
other
|
-
|
|
23.5
|
|
16.5
|
|
110.8
|
|
|
|
Changes in assets and
liabilities from
|
|
|
|
|
|
|
|
|
|
|
|
operating activities
|
(24.7)
|
|
(53.5)
|
|
(110.6)
|
|
(181.2)
|
|
|
|
Realized loss (gain) on
mark-to-market
|
|
|
|
|
|
|
|
|
|
|
|
derivative contracts
(1)
|
6.4
|
|
(65.2)
|
|
29.9
|
|
(328.0)
|
|
|
|
Current income taxes
attributable to derivative
|
|
|
|
|
|
|
|
|
|
|
|
contracts
|
-
|
|
(11.3)
|
|
-
|
|
(45.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities (GAAP)
|
$ 235.3
|
|
$ 189.2
|
|
$ 912.5
|
|
$ 499.0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
Twelve
Months Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2010
|
|
2009
|
|
2010
|
|
2009
|
|
|
|
|
|
|
|
|
|
|
Oil sales
(1)
|
$ (17,854)
|
|
$ (9,198)
|
|
$ (70,834)
|
|
$ 2,923
|
|
Gas
sales
|
11,285
|
|
74,275
|
|
37,996
|
|
308,146
|
|
|
$ (6,569)
|
|
$ 65,077
|
|
$ (32,838)
|
|
$ 311,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010
|
|
2009
|
|
|
|
Amortization of monetized
derivatives (2)
|
|
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 $1.1 billion
monetization in the first quarter 2009.
|
|
(2)
|
Represents the net receipts for
derivatives monetized in the first quarter of 2009 attributable to
their production periods, net of accrued interest on our deferred
premiums.
|
|
|
|
|
|
|
|
|
|
|
Plains Exploration &
Production Company
|
|
Proved Reserves, Reserve
Replacement Ratio, Costs Incurred & Finding and Development
Costs
|
|
|
|
|
Proved Reserves
(MMBOE):
|
|
|
2009 Year-end estimated proved
reserves
|
359.5
|
|
2010 Extensions and
discoveries
|
77.1
|
|
2010 Revisions
|
20.0
|
|
2010 Acquisitions
|
1.4
|
|
2010 Divestments
|
(9.3)
|
|
2010 Production
|
(32.6)
|
|
2010 Year-end estimated proved
reserves
|
416.1
|
|
|
|
|
Reserve Replacement
Ratio (1) (2)
|
302%
|
|
Calculation: Reserve extensions,
discoveries and other additions,
|
|
|
revisions and acquisitions
divided by production
|
|
|
|
|
|
Costs Incurred ($
Millions):
|
|
|
Property acquisition
costs:
|
|
|
Unproved
properties
|
$ 612.5
|
|
Proved
properties
|
48.1
|
|
Exploration costs
|
719.0
|
|
Development costs
|
363.2
|
|
Total costs incurred
(3)
|
$ 1,742.8
|
|
|
|
|
Finding and Development Costs
(F&D) (2) (4)
|
|
|
|
|
|
All-In F&D Costs per
BOE
|
$ 17.69
|
|
Calculation: Total costs
incurred divided by reserve extensions, discoveries,
|
|
|
revisions and
acquisitions
|
|
|
|
|
|
F&D Costs Excluding
Acquisition Costs per BOE
|
$ 11.15
|
|
Calculation: Total costs
incurred minus unproved and proved property
|
|
|
acquisition costs divided by
reserve extensions, discoveries and revisions
|
|
|
|
|
|
|
|
|
|
(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.
|
|
|
|
|
(2)
|
The Reserve
Replacement Ratio and Finding and
Development Costs per BOE are statistical
indicators that have limitations, including their predictive and
comparative value. As such, these metrics should not be
considered in isolation or as a substitute for an analysis of our
performance as reported under GAAP. Furthermore, these
metrics may not be comparable to similarly titled measurements used
by other companies.
|
|
|
|
|
(3)
|
Includes capitalized interest
expense of $128.0 million and capitalized general and
administrative expense of $68.0 million.
|
|
|
|
|
(4)
|
Finding and Development
Costs per BOE is a non-GAAP metric
commonly used in the exploration and production industry. The
calculations presented are described above. This calculation
does not include the future development costs required for the
development of proved undeveloped reserves.
|
|
|
|
SOURCE Plains Exploration & Production Company