PXP Strengthens 2013, 2014 and 2015 Crude Oil Derivative Positions
HOUSTON, Sept. 18, 2012 /PRNewswire/ -- Plains Exploration & Production Company (NYSE: PXP) ("PXP" or the "Company") provides an update to its oil derivative positions. PXP continues to implement its crude oil hedging program following the recently announced Gulf of Mexico acquisition and intends to protect up to 90% of the Company's crude oil production for the 2013 through 2015 period. Winston M. Talbert, Executive Vice President and Chief Financial Officer of PXP commented, "PXP is off to a good start in achieving its goal. We look forward to a continued strong futures market to complete our hedging program."
A detailed list of PXP's current derivative positions is included at the end of this release.
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 for "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 acquisition,
* reserve and production estimates,
* oil and gas prices,
* the impact of derivative positions,
* 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 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 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.
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Summary of Open Derivative Positions | |||||||||||
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At September 18, 2012 | |||||||||||
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Average |
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Instrument |
Daily |
Average |
Deferred |
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Period (1) |
Type |
Volumes |
Price (2) |
Premium |
Index | ||||||
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Sales of Crude Oil Production |
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2012 |
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Sept - Dec |
Three-way collars(3) |
40,000 Bbls |
$100.00 Floor with an $80.00 Limit |
- |
Brent | ||||||
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$120.00 Ceiling |
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2013 |
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Jan - Dec |
Swap contracts(4) |
40,000 Bbls |
$109.23 |
- |
Brent | ||||||
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Jan - Dec |
Put options(5) |
13,000 Bbls |
$100.00 Floor with an $80.00 Limit |
$6.800 per Bbl |
Brent | ||||||
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Jan - Dec |
Three-way collars(3) |
25,000 Bbls |
$100.00 Floor with an $80.00 Limit |
- |
Brent | ||||||
|
$124.29 Ceiling |
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Jan - Dec |
Three-way collars(3) |
5,000 Bbls |
$90.00 Floor with a $70.00 Limit |
- |
Brent | ||||||
|
$126.08 Ceiling |
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|
Jan - Dec |
Put options(5) |
17,000 Bbls |
$90.00 Floor with a $70.00 Limit |
$6.253 per Bbl |
Brent | ||||||
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2014 |
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Jan - Dec |
Put options(5) |
5,000 Bbls |
$100.00 Floor with a $80.00 Limit |
$7.110 per Bbl |
Brent | ||||||
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Jan - Dec |
Put options(5) |
30,000 Bbls |
$95.00 Floor with a $75.00 Limit |
$6.091 per Bbl |
Brent | ||||||
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Jan - Dec |
Put options(5) |
75,000 Bbls |
$90.00 Floor with a $70.00 Limit |
$5.739 per Bbl |
Brent | ||||||
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2015 |
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Jan - Dec |
Put options(5) |
25,000 Bbls |
$90.00 Floor with a $70.00 Limit |
$6.720 per Bbl |
Brent | ||||||
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Sales of Natural Gas Production |
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2012 |
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Sept - Dec |
Put options(6) |
120,000 MMBtu |
$4.30 Floor with a $3.00 Limit |
$0.298 per MMBtu |
Henry Hub | ||||||
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Sept - Dec |
Three-way collars(7) |
40,000 MMBtu |
$4.30 Floor with a $3.00 Limit |
- |
Henry Hub | ||||||
|
$4.86 Ceiling |
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Sept - Dec |
Swap contracts(4) |
80,000 MMBtu |
$2.72 |
- |
Henry Hub | ||||||
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2013 |
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Jan - Dec |
Swap contracts(4) |
110,000 MMBtu |
$4.27 |
- |
Henry Hub | ||||||
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2014 |
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Jan - Dec |
Swap contracts(4) |
100,000 MMBtu |
$4.09 |
- |
Henry Hub | ||||||
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(1) |
All of our derivatives are settled monthly. | ||||||||||
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(2) |
The average strike prices do not reflect any premiums to purchase the put options. | ||||||||||
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(3) |
If the index price is less than the per barrel floor, we receive the difference between the per barrel floor and the index price up to a maximum of $20 per barrel. We pay the difference between the index price and the per barrel ceiling if the index price is greater than the per barrel ceiling. If the index price is at or above the per barrel floor but at or below the per barrel ceiling, no cash settlement is required. | ||||||||||
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(4) |
If the index price is less than the fixed price, we receive the difference between the fixed price and the index price. We pay the difference between the index price and the fixed price if the index price is greater than the fixed price. | ||||||||||
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(5) |
If the index price is less than the per barrel floor, we receive the difference between the per barrel floor and the index price up to a maximum of $20 per barrel less the option premium. If the index price is at or above the per barrel floor, we pay only the option premium. | ||||||||||
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(6) |
If the index price is less than the per MMBtu floor, we receive the difference between the per MMBtu floor and the index price up to a maximum of $1.30 per MMBtu less the option premium. If the index price is at or above the per MMBtu floor, we pay only the option premium. | ||||||||||
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(7) |
If the index price is less than the per MMBtu floor, we receive the difference between the per MMBtu floor and the index price up to a maximum of $1.30 per MMBtu. We pay the difference between the index price and the per MMBtu ceiling if the index price is greater than the per MMBtu ceiling. If the index price is at or above the per MMBtu floor but at or below the per MMBtu ceiling, no cash settlement is required. | ||||||||||
SOURCE Plains Exploration & Production Company
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