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EX-99.1 - PLAINS EXPLORATION & PRODUCTION COMPANY PRESS RELEASE DATED AUGUST 2, 2012 - PLAINS EXPLORATION & PRODUCTION COd387292dex991.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 2, 2012

 

 

PLAINS EXPLORATION & PRODUCTION COMPANY

(Exact name of registrant as specified in charter)

 

 

 

Delaware     33-0430755
(State of Incorporation)    

(I.R.S. Employer

Identification No.)

001-31470

(Commission File No.)

700 Milam, Suite 3100

Houston, Texas 77002

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code: (713) 579-6000

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02 Results of Operations and Financial Condition

Item 7.01 Regulation FD Disclosure

On August 2, 2012, Plains Exploration & Production Company (“PXP”) issued a press release announcing second quarter 2012 results. The press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.

Pursuant to Item 7.01, PXP is updating its 2012 full-year operating and financial guidance.

The information presented herein under Item 2.02 and Item 7.01 shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such a filing.

Statement Regarding Forward-Looking Statements

This Report on Form 8-K contains forward-looking information regarding PXP that is intended to be covered by the safe harbor “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. All statements included in this Report that address activities, events or developments that PXP expects, believes or anticipates will or may occur in the future are forward-looking statements. These factors include, among other things:

 

   

reserve and production estimates;

 

   

oil and gas prices;

 

   

the impact of derivative positions;

 

   

production expense estimates;

 

   

cash flow estimates;

 

   

future financial performance;

 

   

capital and credit market conditions;

 

   

planned capital expenditures; and

 

   

other matters that are discussed in PXP’s filings with the SEC.

These statements are based on our current expectations and projections about future events and involve known and unknown risks, uncertainties, and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. Please refer to our filings with the SEC, including our Form 10-K, for a discussion of these risks.

All forward-looking statements in this report are made as of the date hereof, and you should not place undue reliance on these statements without also considering the risks and uncertainties associated with these statements and our business that are discussed in this report and our other filings with the SEC. Moreover, although we believe the expectations reflected in the forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material. Except as required by law, we do not intend to update these forward-looking statements and information.

Guidance Update

PXP updated its 2012 full-year operating and financial guidance to reflect higher sales volumes, higher oil volumes as a percentage of total volumes, updated oil price realizations, and higher depreciation, depletion and amortization expense per barrel of oil equivalent.

The following table and accompanying notes reflect current estimates of certain results for the full year 2012 for PXP. These estimates are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management’s assumptions and our future performance are both subject to a wide range of business risks and uncertainties and there is no assurance

 

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that these goals and estimates can or will be met. Any number of factors could cause actual results to differ materially from those in the following table and accompanying notes, including but not limited to the factors discussed above. The estimates set forth below are given as of the date hereof and are only based on information available as of the date hereof. Further information on risks and uncertainties is available in our filings with the SEC, and we encourage you to review these filings.

Plains Exploration & Production Company

Full-Year 2012 Operating and Financial Guidance

 

    Year Ended
December 31, 2012

Production Volumes (MBOE/day)

     

Total Production volumes sold

    95 — 97  

Oil

    57% — 60%  

NGLs

    3% — 4%  

Natural Gas

    40% — 36%  

Product Price Realization (Unhedged)

     

Oil - Brent

    94% — 96%  

Oil - Transportation expense

    $5.00  

NGLs - WTI

    40%  

Gas - Henry Hub

    100%  

Gas - Transportation expense

    $0.15  

Production Costs per BOE

     

Lease operating expense

    $9.50 — $10.50  

Steam gas costs (1)

    $1.25 — $1.75  

Electricity

    $1.20 — $1.40  

Production and ad valorem taxes (2)

    $2.00 — $2.25  

Gathering and transportation

    $1.50 — $2.00  

Depreciation, Depletion and Amortization per BOE

    $26 — $28  

General and Administrative Expenses (in millions)

     

Cash

    $107 — $111  

Stock-based compensation (3)

    $40 — $46  

Interest Expense

     

Average revolver balance

    30 Day     LIBOR + 1.50%    - 2.50%

$185 Million Senior Notes

    10.000%  

$400 Million Senior Notes

    7.625%  

$750 Million Senior Notes

    6.125%  

$400 Million Senior Notes

    8.625%  

$300 Million Senior Notes

    7.625%  

$600 Million Senior Notes

    6.625%  

$1,000 Million Senior Notes

    6.750%  

Effective Tax Rate

    38% — 40%  

Weighted Average Equivalent Shares Outstanding (in thousands)

     

Basic

    127,600  

Diluted

    129,300  

Capital Expenditures (in millions) (4)

     

PXP

    $1,366  

Gulf of Mexico - Plains Offshore

         234  
   

 

 

Total

    $1,600  
   

 

 

 

(1) 

Steam gas costs assume a base SoCal Border index price of $3.84 per MMBtu. The purchased volumes are anticipated to be 43,000 - 45,000 MMBtu per day.

(2) 

Production and ad valorem taxes assume base index prices of $110.00 per barrel and $4.00 per MMBtu. (Note: Brent index price for Oil)

(3) 

Based on current outstanding and projected awards and current stock price.

(4) 

Includes capitalized interest and general and administrative expenses.

Item 9.01 Financial Statements and Exhibits

 

  (d) Exhibit 99.1    Plains Exploration & Production Company press release dated August 2, 2012.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

      PLAINS EXPLORATION & PRODUCTION COMPANY
Date: August 2, 2012      

/s/ Nancy I. Williams

      Nancy I. Williams
      Vice President—Accounting, Controller and Chief Accounting Officer


EXHIBIT INDEX

 

Exhibit 99.1 Plains Exploration & Production Company press release dated August 2, 2012.