Plains Has Until Friday to Modify Stone Offer

Stone Energy announced that its board has determined that the definitive offer that it received on June 15 from Energy Partners, Ltd. (EPL) is a "Target Superior Proposal" as defined in the existing merger agreement dated as of April 23, 2006, by and among Plains Exploration & Production Co., Plains Acquisition Corp., and Stone. Plains now has five businesses days to modify the terms of its offer.

Under the terms of the proposed merger agreement with EPL, each share of Stone common stock would be converted into the right to receive, at the election of the holder: (i) $51 in cash or (ii) shares of EPL common stock equivalent to the ratio determined by dividing $51 by the market price of shares of EPL common stock (based on a 20-day trading average prior to the third trading day preceding the closing), provided that the exchange ratio would not be greater than 2.525 or less than 2.066 shares of EPL common stock per share of Stone common stock.

The election of cash or stock would be subject to a limit on total cash consideration of approximately $723 million (which includes approximately $15.5 million attributable to stock options) and a limit on the total number of shares of EPL common stock to be issued of approximately 35 million. Based on the closing price of EPL common stock on June 16, 2006, of $18.75 per share, the EPL consideration would equate to a blended average of $49.17 per share of Stone common stock. On June 16, 2006, the closing price of Stone's common stock was $46.75.

The proposed EPL merger agreement is, except for the proposed consideration, substantially similar to the terms of the Plains merger agreement.

Stone also said that it has notified Plains of the definitive terms of the proposed EPL merger agreement and that its board is prepared to terminate the Plains merger agreement and enter into the proposed EPL merger agreement.

Plains has five business days, from today through Friday, June 23, 2006, to make any adjustments to the terms and conditions of the Plains merger agreement that Stone's board determines are at least as favorable to Stone's stockholders as the EPL merger agreement. Barring a revised Plains merger agreement, Stone intends to terminate the Plains proposal and EPL's offer. In the event of such a termination by Stone, Plains will be entitled to a $43.5 million termination fee from Stone, which EPL has agreed to furnish to Plains, subject to possible reimbursement by Stone, in whole or in part, under certain circumstances.

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