PXP Executes Agreement to Sell Two Deepwater Gulf of Mexico Discoveries and One Exploration Prospect for $700 Million

Search Blogs that Mention this News Release
Click this link to view linked Bookmarking Services
Click this link to view linked Blogging Services
PXP Executes Agreement to Sell Two Deepwater Gulf of Mexico Discoveries and One Exploration Prospect for $700 Million
    HOUSTON, Sept. 18 /PRNewswire-FirstCall/ -- Plains Exploration &
Production Company (NYSE: PXP) ("PXP" or the "Company") announced today it
has entered into an agreement with a subsidiary of Statoil ASA whereby such
subsidiary will pay PXP $700 million to acquire PXP's working interests in
two deepwater Gulf of Mexico discoveries, Big Foot and Caesar, and one
deepwater exploration prospect, Big Foot North, comprising a total of four
deepwater lease blocks, Green Canyon blocks 683 and 952 and Walker Ridge
blocks 28 and 29. In addition, PXP has granted Statoil certain negotiation
rights with respect to future sales of other PXP Gulf of Mexico exploration
assets. PXP's remaining deepwater portfolio consists of 15 prospects
covering an area in excess of 50 deepwater blocks. Two of these prospects,
Norman and Friesian, are currently drilling.
    "This sale illustrates the value created by our initial exploration
efforts in the deepwater Gulf of Mexico to date and we are continuing our
strategy of delivering that value to the PXP shareholders. Proceeds from
the sale will be used to complete the remaining $400 million of the
authorized stock purchase program and for debt reduction. The agreement
between PXP and Statoil allows PXP to accelerate the early stage
development of PXP's remaining prospects in the Miocene trend in the
deepwater Gulf of Mexico, and Statoil is contractually positioned to
purchase additional leasehold interests at market value from PXP.
Therefore, Statoil would be able to mature those projects through full
scale development and initial production. We look forward to expanding our
new relationship with Statoil as we continue to develop a premium
exploration project inventory in the Gulf of Mexico," said James C. Flores,
PXP's Chairman, President and Chief Executive Officer.
    The transaction has an effective date of September 1, 2006, is expected
to close early November, 2006, and is subject to customary post-closing
adjustments and the exercise of preferential rights related to the
properties. The Company expects to recognize a material gain in the fourth
quarter in connection with this transaction and was advised by Lehman
Brothers Inc., J.P. Morgan and Harrison Lovegrove L.P.
    CONFERENCE CALL
    PXP will host a conference call today September 18, 2006 at 8:00 a.m.
Central to discuss these developments and other forward-looking items.
Investors wishing to participate may dial 1-800-567-9836 or 1-973-935-8460.
The replay will be available through October 2, 2006 and can be accessed by
dialing 1-877-519-4471 or 1-973-341-3080, Replay ID: 7876938. A live
webcast and slides for the conference call will be available in the
Investor Information section of PXP's website, http://www.plainsxp.com,
during the conference call and for 60 days after the event date.
    PXP is an independent oil and gas company primarily engaged in the
upstream activities of acquiring, developing, exploiting, exploring and
producing oil and gas in its core areas of operation: onshore and offshore
California, and the Gulf Coast region of the United States. 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 statements.
These include statements regarding:
    * closing of the announced sale,
    * reserve and production estimates,
    * oil and gas prices,
    * the impact of derivative positions,
    * production expense estimates,
    * cash flow estimates,
    * future financial performance,
    * 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 the year ended December 31, 2005,
for a discussion of these risks.
    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 for any
obligation to disclose material information under the Federal securities
laws, we do not intend to update these forward-looking statements and
information.
SOURCE Plains Exploration & Production Company
http://www.plainsxp.com
CONTACT:
Scott D. Winters, Vice President - Investor
Relations, +1-713-579-6190, or +1-800-934-6083