Plains Exploration & Production Company (NYSE: PXP) has reported that its development of California and Texas unconventional prospects continues to be active.

In the company's 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, PXP plans to sustain multi-year drilling programs providing future reserves, production and free cash flow.

California is the company'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.

PXP has also seen ongoing activity at its Texas prospects in Eagle Ford, Granite Wash and Haynesville shale plays.

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 (BOE/d) net to PXP and 5,000 BOE/d 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 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.