Sandell Seeks a Concrete Plan and Immediate Action at Plains Exploration Post-Closing of the Pogo Acquisition

Oct 19, 2007, 01:00 ET from Sandell Asset Management Corp.

    NEW YORK, Oct. 19 /PRNewswire/ -- Sandell Asset Management Corp.
 ("Sandell") today sent a letter to Mr. James Flores, Chairman, President,
 and CEO of Plains Exploration and Production Company ("Plains," "PXP" or
 the "Company") (NYSE:   PXP). Sandell also disclosed beneficial ownership of
 5.1% of shares of Plains' common stock in a Schedule 13D filed with the
 Securities and Exchange Commission today. In the letter to Mr. Flores,
 Sandell stated that while it is inclined to support the Pogo transaction,
 it is concerned by Plains' management's inability to provide a strategic
 plan for the combined company post-closing. The letter further states that
 Sandell insists the Company provide such a plan and take the following
 actions immediately after the close of the transaction:
     -- Asset sales -- PXP should immediately prepare for a large asset
        divestiture in the 4th quarter of 2007 with all sale proceeds dedicated
        to share repurchases.  Further, the Company should continue to
        opportunistically monetize Gulf of Mexico reserves and non-core assets
        consistent with management's prior commitments.
     -- MLP creation -- Prior to the announcement of the Pogo deal, PXP was
        reviewing the formation of an MLP for virtually all of the reserves in
        California and the Piceance basin.  In PXP's recent press release dated
        10/9/07, the language on MLP formation remained vague, doing little to
        inform PXP investors.  Investors need a definitive plan and timetable
        for MLP creation and drop-downs by which management can be held
     -- Stock repurchases -- Historically, PXP has been an aggressive purchaser
        of its own shares.  Sandell is concerned that potential complications
        related to the Pogo transaction, asset sale delays or an unwillingness
        to repurchase shares may contribute to further share price
        underperformance. Aggressive share repurchases must be a key part of
        the value realization plan going forward.
     "Plains is an excellent company and has historically created a lot of
 value for investors. We believe the recent underperformance is related to
 confusion in the market regarding the plan for the combined Company post-
 closing including the timetable for asset sales and an MLP," said Thomas E.
 Sandell, Chief Executive Officer of Sandell Asset Management Corp. "We
 believe that management has an opportunity to create significant value for
 investors of up to $90 per share, but that this value can only be
 accomplished through aggressive execution of the actions we have
     For further information, contact:
     Mr. Thomas E. Sandell
     Sandell Asset Management Corp.
     (212) 603-5700
     About Sandell Asset Management Corp.
     Sandell Asset Management Corp. is a multi-billion dollar global
 investment management firm, founded by Thomas E. Sandell, that focuses on
 global corporate events and restructurings throughout North America,
 Continental Europe, the United Kingdom, Latin America and Asia. Sandell
 frequently will take an "active involvement" in facilitating financial or
 organization improvements accruing to the benefit of investors.
     This release is for general informational purposes only. It does not
 have regard to the specific investment objective, financial situation,
 suitability, or the particular need of any specific person who may view it,
 and should not be taken as advice on the merits of any investment decision.
 The views expressed herein represent the opinions of Sandell and are based
 on or derived from publicly-available information and third party reports
 with respect to Plains Exploration and Production Company ("the Issuer").
     Sandell has not sought or obtained consent from any third party to use
 any statements or information as having been obtained or derived from
 statements made or published by third parties. Any such statements or
 information should not be viewed as indicating the support of such third
 party for the views expressed herein. No warranty is made that data or
 information, whether derived or obtained from publicly-available sources or
 from any third party, are accurate.
     Sandell shall not be responsible or have any liability for any
 misinformation contained in any publicly-available sources or third party
 report. There is no assurance or guarantee with respect to the prices at
 which any securities of the Issuer will trade, and such securities may not
 trade at prices that may be implied from this letter. Any estimates,
 projections and pro forma information set forth are based on assumptions
 that Sandell believes to be reasonable, but there can be no assurance or
 guarantee that actual results or performance of the Issuer will not differ,
 and such differences may be material. Sandell does not recommend the
 purchase or sale of any security.
     Under no circumstances is this letter to be used or considered an offer
 to sell or a solicitation of an offer to buy any security. Sandell
 currently holds shares of common stock of the Issuer. Sandell manages funds
 and accounts that are in the business of buying and selling public
 securities. It is possible that there will be developments in the future
 that cause Sandell from time to time to sell all or a portion of its shares
 in open market transactions or otherwise (including via short sales), buy
 additional shares (in open market or privately negotiated transactions or
 otherwise), or trade in options, puts, calls or other derivative
 instruments relating to such shares.

SOURCE Sandell Asset Management Corp.