Plains Exploration & Production Company, Houston, (NYSE: PXP) has reported first-quarter revenues of $430.3 million and net income of $71.0 million, or $0.49 per diluted share, compared to revenues of $384.1 million and net income of $58.5 million, or $0.41 per diluted share, for the first-quarter 2010.

First-quarter income from operations was $133.8 million and net cash provided by operating activities was $290.0 million, a 13% and 31% increase over first-quarter 2010, respectively.

First-quarter daily sales volumes averaged 88 thousand BOE per day, representing a 3% increase over first-quarter 2010 average daily sales volumes or a 19% increase pro-forma for the 2010 asset sale.

"We are pleased with first-quarter operating and financial results," said James C. Flores, chairman, president and chief executive officer. "Revenues, income from operations and cash flow are stronger than first- quarter 2010 and benefitted from increased production, higher crude oil prices and improved oil price realizations."

Operational Update

  • In the Eagle Ford Shale asset area, PXP has 5 drilling rigs operating. First-quarter daily sales volumes averaged approximately 2,240 BOE per day net to PXP and were in excess of 3,000 BOE per day net to PXP at the end of the quarter. The 2011 planned 3 net rig program sales volumes exit rate is expected to be above 5,000 BOE per day net at year-end 2011. However, if the current 6 net rig program continues, PXP expects to exit the year above 10,000 BOE net per day. Currently there are 18 wells waiting on completion or connection to pipelines.
  • 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. First-quarter daily sales volumes averaged approximately 8,940 BOE per day net to PXP, or 12% higher than fourth-quarter 2010. Average daily sales volumes are expected to increase to approximately 17,000 BOE net per day by year-end 2011. There are 4 wells waiting on completion or connection to pipelines.
  • In the Haynesville Shale asset area, PXP’s primary operator is currently operating 33 rigs and expects to reduce the rig count to an average of 25 rigs in 2011, plus PXP expects 15 or more rigs by other operators on its acreage. First-quarter daily sales volumes averaged approximately 162 million cubic feet equivalent (MMcfe) per day net to PXP, or 11% higher than fourth-quarter 2010. The rate of increase in sales volumes is anticipated to slow as the rig count decreases. Average daily sales volumes are expected to be above 170 MMcfe net per day at year-end 2011.
  • In the other asset areas, including the Madden Field in Wyoming and other Texas assets, average daily sales volumes are expected to be above 11,000 BOE net per day by year-end 2011.
  • PXP is making progress on several additional projects. In Wyoming, PXP drilled an initial well on its Mowry Shale position and plans to complete and announce well results in the third quarter. Drilling operations are currently underway on a second well in the Mowry Shale.

"If current market conditions continue, using today’s crude oil price outlook and improved crude oil differentials, we expect to see an average increase in our 2011 full-year cash margin of more than 25% compared to first-quarter 2010 and a more than 30% increase compared to the full-year 2010 average," added Flores. "Operationally, our 2011 growth objectives are on track. In each of our core asset areas we are focused on the execution of the onshore oil drilling and expansion plans and results in each of our project areas have been positive, led by the accelerated pace on our Eagle Ford leasehold. PXP is well positioned for a strong 2011."