2008-09-02-2008-04-01

Acquired 67,929 gross acres in S.TX, gaining 93 Bcfe/proved.

Plains Exploration & Production Co., Houston, (NYSE: PXP) plans to acquire producing properties in South Texas from an undisclosed privately held company for $335 million. The assets include 67,929 gross acres (34,509 net). Proved reserves are 106 billion cubic feet equivalent with an additional 70 billion of unproved potential. Net production is approximately 33 million cubic feet equivalent per day. Plains intends to fund the majority of the purchase using a tax-deferred like-kind exchange with proceeds from the sale of a 50% interest in properties in the Permian Basin in West Texas and New Mexico and the Piceance Basin in Colorado to Occidental Petroleum Corp., Los Angeles, (NYSE: OXY) for $1.55 billion. Plains president and chief executive James C. Flores says, "Due to the company's superior financial position from high cash flow due to record commodity prices, we are opportunistically acquiring excellent production/development assets in South Texas to expand this strong operating area for PXP." The company's per-share growth strategy remains focused on acquiring significant and growing production/development assets, exploration drilling and repurchasing shares, he adds. Jefferies Randall & Dewey is advisor. The effective date is Jan. 1. Closing is expected during the second quarter. Plains operates in California, the Rockies, Gulf Coast, Texas Panhandle, South Texas and the Permian Basin. As for the Oxy deal, Mariner Energy Inc., Houston, (NYSE: ME) has acquired an additional 5% working interest in the Mariner-operated Spraberry Aldwell Unit in the Permian Basin from Plains for approximately $21.7 million by exercising a preferential right on part of the Oxy package. Net proved reserves are 14 billion cubic feet equivalent. Production is approximately 1.6 million cubic feet equivalent per day.