OPERATIONAL SUMMARY

Crude oil sales volumes averaged 55.8 thousand barrels per day, a 34% increase, pro forma for the December 2011 asset sales, compared to the second-quarter of 2011. The robust volume growth is driven primarily by strong performance in the Eagle Ford Shale and steady, consistent performance in California.

Natural gas liquids sales volumes averaged 4 thousand barrels per day net to PXP, compared to second-quarter 2011 average volumes of 5 thousand barrels per day net to PXP reflecting the impact of the South Texas and Texas Panhandle asset sales in December 2011.

Natural gas sales volumes averaged 231 million cubic feet ("MMcf") per day net to PXP compared to 295 MMcf per day in the second-quarter 2011. Lower volumes reflect the impact of the December 2011 asset sales and voluntary production curtailments at the Haynesville Shale, partially offset by increased production from the Eagle Ford Shale.

In the Eagle Ford Shale, second-quarter daily sales volumes averaged 25.7 thousand BOE per day net to PXP compared to second-quarter 2011 average daily sales volumes of 2.3 thousand BOE per day net to PXP. At the end of July PXP had 9.1 net drilling rigs operating on its acreage and the number of wells drilled but waiting on completion or connection to pipelines was 27 wells.

In California, second-quarter daily sales volumes averaged 38.7 thousand BOE per day net to PXP compared to the second-quarter 2011 daily sales volume average of 40.5 thousand BOE per day net to PXP. The 2012 development plan is on track and PXP expects to exit the year between 39 – 41 thousand BOE per day. PXP reached total depth on its Point Pedernales Field development well offshore California. The well encountered over 3,500 feet of Monterey section in 5 zones and successfully extended the previously defined reservoir limits.

In the Haynesville Shale, second-quarter daily sales volumes averaged 172.9 MMcf per day net to PXP compared to second-quarter 2011 average daily sales volumes of 181.7 MMcf per day net to PXP. The sales volume decline reflects operator driven production curtailments and reduced drilling activity. At the end of July PXP's primary operator was operating 2 rigs.

DERIVATIVE UPDATE

With higher natural gas production from the Haynesville Shale than originally anticipated, PXP chose to enter into additional swap contracts for 2012. During the three months ended June 30, 2012, PXP entered into natural gas swap contracts on 80,000 MMBtu per day for 2012 with an average price of $2.72 per MMBtu.

MANAGEMENT COMMENT

James C. Flores, Chairman, President and CEO of PXP commented, "We had an impressive quarter with continued robust Eagle Ford expansion and solid California operating performance demonstrating the strength of the Company's underlying oil asset base. Our growing oil sales volumes, our improved crude oil marketing contracts and our hedging strategy are driving higher revenues, stronger cash flow and healthy cash margins. As part of our focused oil growth strategy, we remain committed to aggressively expanding our large, high-margin oil business. In the short-term, PXP is providing stellar execution of its Eagle Ford growth plan. We are not only seeing strong production growth but also beginning to see efficiencies across all aspects of our Eagle Ford activity. Longer-term, PXP is moving forward on its exciting Gulf of Mexico projects that are expected to add significant future production."