PXP Announces Pricing of $3.0 Billion of Senior Notes

HOUSTON, Oct. 23, 2012 /PRNewswire/ -- Plains Exploration & Production Company (NYSE: PXP) today announced that it has priced an underwritten public offering of $3.0 billion of senior notes, consisting of $1.5 billion in aggregate principal amount of 6 1/2% Senior Notes due 2020, issued at par, and $1.5 billion in aggregate principal amount of 6 7/8% Senior Notes due 2023, issued at par (collectively, the "notes").  Interest is payable on the notes due 2020 on May 15 and November 15 of each year, beginning on May 15, 2013. Interest is payable on the notes due 2023 on February 15 and August 15 of each year, beginning on February 15, 2013. The first interest payment will consist of interest from the scheduled closing date of October 26, 2012 to May 15, 2013 or February 15, 2013, as applicable. The closing of the offering is subject to the satisfaction of customary closing conditions.

The notes are being issued to fund a portion of the consideration for PXP's previously announced acquisition of oil and gas interests in the Gulf of Mexico from BP Exploration & Production Inc. and BP America Production Company (collectively, "BP") and Shell Offshore Inc. Pending the use of proceeds for such purpose, PXP expects to use a portion of the net proceeds from the offering to repay borrowings outstanding under its senior revolving credit facility. If the BP acquisition does not close on or prior to March 15, 2013, or if the BP purchase agreement is terminated at any time prior to consummation thereof, PXP will be required to redeem all the notes of each series in cash at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest to the date of redemption. Additionally, if PXP determines it is reasonably likely that the BP acquisition will not close on or prior to March 15, 2013, or the BP purchase agreement will be terminated at any time prior thereto, PXP may, at its option, redeem all but not less than all of the notes then outstanding in cash at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest to the date of redemption. 

J.P. Morgan Securities LLC, Barclays Capital Inc., BMO Capital Markets Corp., Citigroup and Wells Fargo Securities, LLC are acting as joint book-running managers of the offering. The offering will be made only by means of a prospectus supplement and accompanying base prospectus, copies of which may be obtained from: J.P. Morgan Securities LLC, Attention:  High Yield Syndicate, 383 Madison Avenue, New York, NY 10179 (phone: (800) 245-8812); Barclays Capital Inc., c/o Broadridge Financial Solutions, Inc., 1155 Long Island Avenue, Edgewood, NY 11717 (phone: (888) 603-5847 and e-mail: [email protected]); BMO Capital Markets Corp., Attention:  High Yield Syndicate, 3 Times Square, 28^th Floor, New York, NY 10036 (phone: (800) 414-3627 and e-mail: [email protected]); Citigroup, c/o Broadridge Financial Solutions, Inc., 1155 Long Island Avenue, Edgewood, NY 11717 (phone: (800) 831-9146); and Wells Fargo Securities, LLC, Attention: Client Support, MAC D1086-070, 550 South Tryon Street, 7^th Floor, Charlotte, NC 28202 (phone: (800) 326-5897 and e-mail: [email protected]).

When filed, an electronic copy of the final prospectus supplement and accompanying base prospectus may also be obtained at no charge at the Securities and Exchange Commission's website at http://www.sec.gov.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

PXP is an independent oil and gas company primarily engaged in the activities of acquiring, developing, exploring and producing oil and gas in California, Texas, Louisiana and the Gulf of Mexico. PXP is headquartered in Houston, Texas.

ADDITIONAL INFORMATION & FORWARD-LOOKING STATEMENTS

This press release 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 press release that address activities, events or developments that PXP expects, believes or anticipates will or may occur in the future are forward-looking statements.  These include statements regarding:

* completion of the proposed offering,

* completion of the proposed Gulf of Mexico acquisition,

* capital and credit market conditions, 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 Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2011, for a discussion of these risks.

All forward-looking statements in this press release 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 press release and our other filings with the Securities and Exchange Commission. 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.

SOURCE Plains Exploration & Production Company