September 26, 2008
PXP to Divest Permian and Piceance Interests to Oxy for $1.25 Billion
Plains Exploration & Production has executed a definitive purchase and sale agreement to sell its interests in oil and gas properties located in the Permian and Piceance basins for $1.25 billion to Occidental Petroleum.
The interests to be sold to Occidental Petroleum (Oxy) generate sales volumes net to Plains Exploration & Production (PXP) of approximately 13,000 barrels of oil equivalent per day and had approximately 92 million barrels of oil equivalent proved reserves net to PXP as of December 31, 2007.
James Flores, chairman, president and CEO of PXP, said: "Pursuant to our commitment to strengthen PXP's financial profile, this transaction increases the company's oil weighting for both reserves and production for 2009 and protects a significant portion of our remaining production with our superior hedge put position insuring positive cash flow even in a lower commodity price environment.
"Additionally, this transaction reduces our corporate debt by at least $1 billion and enables us to lower our projected 2009 capital expenditures to $1.35 billion plus have a pro forma target compounded annual production growth rate in excess of 15% for 2008-2012."