Plains Exploration & Production Company has executed definitive purchase and sale agreements to sell oil and gas properties for approximately $1.75 billion to a subsidiary of Occidental Petroleum Corporation and XTO Energy. PXP also announced today its Board of Directors approved increasing the Company's share repurchase authorization to $1.0 billion. Additionally, the Board approved a $1.15 billion 2008 capital budget. Detailed operational and financial guidance for the full-year 2008 was filed today with the SEC via Form 8-K.
"The oil and gas property divestments balance PXP's asset portfolio and align operator strengths to specific assets maximizing efficiencies and returns," PXP Chairman, President and Chief Executive Officer Jim Flores said. "We are pleased with the values being realized today through these transactions with Oxy and XTO which are significantly higher than our properties are currently valued in our stock price allowing us to use the proceeds to buy back PXP common shares and reduce debt. The 2008 capital plan supports PXP's diversified growth strategy by funding drilling programs in each of our key asset areas and maintains capital discipline since we anticipate capital expenditures to be funded from internal cash
PXP and certain of its subsidiaries have entered into a definitive purchase and sale agreement with a subsidiary of Oxy to sell 50 percent of PXP's working interests in oil and gas properties located in the Permian Basin, West Texas and New Mexico, to Oxy and retain a 50 percent working interest in these properties. Oxy will be the operator of all the assets currently operated by PXP and will apply its CO2 expertise to enhance future development and production growth; and 50 percent of PXP's working interests in oil and gas properties located in the Piceance Basin in Colorado to Oxy and retain a 50 percent working interest in these properties. PXP will remain the operator and expects to deliver multi-year production growth.
The Permian Basin properties currently generate sales volumes of approximately 18,000 barrels of oil equivalent per day (BOEPD) and had approximately 91 million barrels of oil equivalent (BOE) estimated proved reserves as of December 31, 2006 (PXP 50%, 9,000 BOEPD, 45.5 million BOE, respectively). The Piceance properties currently generate sales volumes of approximately 9,000 BOEPD and, based on PXP's estimates, had approximately 64 million BOE estimated proved reserves on the date of PXP's acquisition (PXP 50%, 4,500 BOEPD, 32 million BOE, respectively). The transaction effective date is January 1, 2008 and is expected to close on or before the end of the first quarter 2008 subject to customary closing conditions and adjustments.
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