Plains Exploration & Production Company announces 2010 third quarter results and updates drilling activities.

Financial Summary

For the third quarter 2010, revenues of $387.8 million generated $18.8 million of net income, or $0.13 per diluted share, compared to revenues of $312.2 million and net income of $39.3 million, or $0.30 per diluted share, for the third quarter 2009.

Income from operations was $97.1 million for the third quarter 2010, a 30% increase over third quarter 2009. On a unit of production basis, income from operations increased 19% per barrel oil equivalent (BOE) compared to the third quarter 2009.

Net cash provided by operating activities for the third quarter 2010 was $202.7 million and operating cash flow was $284.4 million compared to net cash provided by operating activities of $168.2 million and operating cash flow of $258.1 million for the third quarter 2009 (a non-GAAP measure).

For the first nine months of 2010, revenues of $1.1 billion generated $122.8 million of net income, or $0.87 per diluted share, compared to revenues of $819.4 million and net income of $88.2 million, or $0.73 per diluted share for the same period in 2009.

James C. Flores, Chairman, President and CEO of PXP commented, "We delivered solid quarterly financial and operating results as average daily sales volumes, income from operations and cash flow each improved significantly from third quarter last year, and our year-to-date production costs per unit sold remain lower than the same period in 2009. For the remainder of 2010, PXP will remain focused on cost control, operational execution and completing the previously announced acquisition and divestment transactions. As we move into 2011, PXP remains well-positioned to continue growing reserves and production. Our $1.2 billion Board of Director approved 2011 capital budget supports our diversified growth strategy with oil focused drilling programs in our key growth asset areas."

Operational Update

Average daily sales volumes for the third quarter 2010 were 90.6 thousand BOE, or 9% higher than the 83.0 thousand BOE in the third quarter 2009. Fourth-quarter 2010 average daily sales volumes are expected to be in line with third quarter volumes reflecting the impact of the Gulf of Mexico shelf asset sale, downtime on certain California and Texas assets and the previously announced repair work following a fire at the Madden Field in Wyoming.

Granite Wash

In the Texas Panhandle Granite Wash development, PXP is currently operating 5 rigs drilling horizontal wells to develop its inventory of over 150 potential locations. PXP plans to spud up to 20 horizontal wells in 2010 and over 25 wells in 2011. Four wells have been drilled, completed and are producing and 4 wells are waiting on completion.

Initial production rates for the two most recent completions are 10.4 million cubic feet per day with 344 barrels of condensate per day and an estimated 1,076 barrels of natural gas liquids per day (2,528 BOE net per day) for the Hanson 29-2H well, and 8.2 million cubic feet per day with 358 barrels of condensate per day and an estimated 773 barrels of natural gas liquids per day (1,993 BOE net per day) for the Sanders 74-1H well.

Haynesville

In the Haynesville Shale, third quarter 2010 average daily sales volumes were 129 million cubic feet equivalent (MMcfe) per day net to PXP, an approximate 22% increase over the 106 MMcfe net per day average rate for the second quarter of 2010. With interests in 45 active drilling rigs, production from this asset area is expected to exceed 135 MMcfe net per day in the fourth quarter 2010.

California

In California, PXP drilled 22 wells in the San Joaquin Valley and 8 wells in the Los Angeles Basin during the third quarter and expects to drill up to 16 wells in the San Joaquin Valley and up to 9 wells in the Los Angeles Basin during the fourth quarter.

Eagle Ford

In the South Texas Eagle Ford, the previously announced acquisition is on track for a November closing. Currently, four rigs are operating on the properties and 20 gross wells have been drilled, completed or are producing. Once closed, PXP will have a net acreage position of approximately 60,000 acres, an estimated 140 to 175 million BOEs of net resource potential and approximately 500 net well locations. This asset area is poised to be a significant driver of future production and reserve growth for PXP.