By Ben Fox Rubin
Plains Exploration & Production Co.'s (>> Plains Exploration & Production Company) fourth-quarter profit soared as the oil-and-gas exploration company's oil revenue surged.
Freeport-McMoRan Copper & Gold Inc. (>> Freeport-McMoRan Copper & Gold Inc.) in December agreed to buy McMoRan Exploration Co. (>> Mcmoran Exploration Co) and Plains Exploration--two oil companies with which it shares close ties--for roughly $9 billion in cash and stock. The deal marked a shift for the mining giant towards U.S. energy exploration. The transactions are expected to close in the second quarter.
Plains has been shifting to higher-priced crude and natural gas liquids as natural gas prices have been languishing near record lows. The company recently agreed to buy BP PLC's (BP, BP.LN) deepwater Gulf of Mexico oil and gas properties for $5.55 billion, in line with a strategy to focus on mature oil fields with existing reserves.
Plains reported income of $218.6 million, or $1.65 a share, up from $97.7 million, or 69 cents a share, a year earlier. Excluding unrealized gains on investment in McMoRan Exploration stock and other impacts, per-share earnings rose to 41 cents from 20 cents.
Revenue was up 68% to $869.2 million.
Analysts polled by Thomson Reuters had recently forecast per-share earnings of 47 cents on revenue of $775 million.
Oil sales were up 91% at $798 million, while gas sales shrank 27% to $70.3 million.
Average realized sales prices, before derivative impacts, were up 7.2% for oil and down 3.3% for gas.
Shares closed at $45.55 on Wednesday and were inactive premarket. The stock is up 29% over the past three months on the recent acquisition activity.
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