PLAINS EXPLORATION & PRODUCTION COMPANY 
By HOUSTON, May 2, 2013 /PRNewswire/ -- Plains Exploration & Production Company (NYSE:PXP) ("PXP" or the "Company") announces 2013 first-quarter financial and operating results.
2013 HIGHLIGHTS
-- Total daily sales volumes averaged 170.4 thousand barrels of oil
equivalent ("BOE"), a 92% increase per diluted share compared to
first-quarter 2012.
-- Oil daily sales volumes averaged 129.2 thousand barrels, a 158% increase
per diluted share compared to first-quarter 2012.
-- Phobos discovery well announced, encountering approximately 250 net feet
of high-quality lower Tertiary oil pay in the Gulf of Mexico.
-- Total revenues were $1,232 million compared to $524.3 million in the
first-quarter of 2012.
-- Net cash provided by operating activities was $818.7 million compared to
$335.4 million in the first-quarter of 2012.
-- Operating cash flow (a non-GAAP measure) was $789.6 million compared to
$329.2 million in the first-quarter of 2012.
-- Long-term debt, including current maturities, was reduced by $420
million to approximately $9.7 billion at quarter-end 2013 compared to
approximately $10.1 billion at year-end 2012.
-- Income from operations was $397.3 million compared to $171.3 million in
the first-quarter of 2012.
-- Net income attributable to common stockholders was $22.6 million, or
$0.17 per diluted share compared to a first-quarter 2012 net loss
attributable to common stockholders of $82.3 million, or $0.64 per
diluted share.
-- Adjusted net income attributable to common stockholders (a non-GAAP
measure) was $139.6 million, or $1.05 per diluted share, compared to
first-quarter 2012 adjusted net income attributable to common
stockholders of $77.0 million, or $0.58 per diluted share.
FINANCIAL SUMMARY
PXP reported first-quarter revenues of $1.2 billion and net income attributable to common stockholders of $22.6 million, or $0.17 per diluted share, compared to revenues of $524.3 million and a net loss attributable to common stockholders of $82.3 million, or $0.64 per diluted share, for the first-quarter of 2012.
The first-quarter 2013 net income attributable to common stockholders includes certain items affecting the comparability of operating results. Those items consist of realized and unrealized gains and losses on our mark-to-market derivative contracts resulting in a net loss of $202.0 million due in large part to higher crude oil forward prices, a $15.5 million unrealized gain on investment in McMoRan Exploration Co. ("McMoRan") common stock, debt extinguishment costs of $18.1 million, and other items. When considering these items, PXP reports adjusted net income attributable to common stockholders of $139.6 million, or $1.05 per diluted share (a non-GAAP measure), compared to $77.0 million, or $0.58 per diluted share, for the same period in 2012.
A reconciliation of non-GAAP financial measures used in this release to comparable GAAP financial measures is included with the financial tables.
OPERATIONAL UPDATE
PXP's 2013 first-quarter daily sales volumes averaged 170.4 thousand BOE per day compared to 87.9 thousand BOE in the first-quarter of 2012.
Crude oil sales volumes averaged 118.9 thousand barrels per day, compared to first-quarter 2012 average volumes of 47.8 thousand barrels per day. Volume growth is driven primarily by the addition of the deepwater Gulf of Mexico assets acquired in November 2012 and strong Eagle Ford Field performance.
Natural gas liquids sales volumes averaged 10.3 thousand barrels per day, compared to first-quarter 2012 average volumes of 1.8 thousand barrels per day. The increase reflects the addition of the deepwater Gulf of Mexico assets and strong Eagle Ford Field performance.
Natural gas sales volumes averaged 246.9 million cubic feet ("MMcf") per day compared to 229.3 MMcf per day in the first-quarter 2012. The increase reflects the addition of the deepwater Gulf of Mexico assets and increased production from the Eagle Ford Field, partially offset by decreased production from the Haynesville Field.
In the Gulf of Mexico, first-quarter daily sales volumes averaged 60.7 thousand BOE per day net to PXP. The Company closed the acquisition of interests in certain deepwater Gulf of Mexico oil and gas properties in late 2012. In early 2013, PXP acquired lease blocks near its newly acquired infrastructure and secured drilling rig capacity to accelerate its top-tier deepwater Gulf of Mexico program beginning in the second half of 2014. There have been additional producer wells drilled at Lucius and a significant discovery was announced at Phobos.
At the Lucius development in Keathley Canyon, four of the six planned producer wells have been drilled with two producer wells remaining to drill this year. In December 2011, the operator and its working interest partners sanctioned development of Lucius, a subsea development consisting of a truss spar hull located in 7,200 feet of water with a topside capacity of 80 thousand barrels of oil per day and 450 MMcf of gas per day. First production is anticipated in 2014. Anadarko Petroleum Corporation is the operator. PXP has a 23.33% working interest.
At the Phobos prospect, located in Sigsbee Escarpment block 39, the operator and its partners recently announced a discovery at the Phobos-1 well which encountered approximately 250 net feet of high-quality oil pay in Lower Tertiary-aged reservoirs. The Phobos discovery was drilled to a total depth of 28,675 feet in approximately 8,500 feet of water, approximately 11 miles south of the Lucius development. Anadarko Petroleum Corporation is the operator and is currently incorporating the data from the Phobos well to determine future activities. PXP has a 50% working interest.
In March 2013, PXP participated in the Gulf of Mexico Outer Continental Shelf Lease Sale 227 and was the apparent high bidder on 11 deepwater blocks. Of the 11 blocks, 7 blocks are located near PXP's Holstein Hub and 3 blocks are located near PXP's Horn Mountain Hub. The sum of PXP's high bids was approximately $82.6 million. If all high bids are awarded, the Company's deepwater Gulf of Mexico portfolio will include interests in 152 blocks containing 60 prospects or leads in the Pliocene, Miocene, Tertiary and Cretaceous reservoirs. PXP has also contracted for two latest-generation, ultra-deep capable drill ships to accelerate the expansion of the Company's deepwater Gulf of Mexico program. The Noble Sam Croft drill ship and the Noble Tom Madden drill ship are currently under construction with delivery to PXP expected mid-year 2014 and early 2015, respectively.
PXP has been notified that the Pascagoula Gas Processing Plant, located in Pascagoula, Mississippi, operated by BP America Corporation and responsible for processing production from wells in the eastern corridor of the deepwater Gulf of Mexico, will shut down for approximately 36 days starting on or about May 3, 2013 during which time required maintenance will be performed. This activity will disrupt processing system wide from several operators, including PXP. The PXP operated Horn Mountain platform and the PXP operated Marlin Hub will be impacted by the work at the gas processing plant. PXP holds a 100% working interest in the Horn Mountain and Marlin Fields. Oil and gas production could be shut-in while the gas processing plant undergoes its required maintenance. PXP's net average daily sales volumes from these facilities were 44.0 thousand BOE per day in the first quarter of 2013.
Despite the second-quarter impact on sales volumes from the required plant shut down, PXP maintains its total company full-year 2013 oil and natural gas sales volume mid-point guidance of 156.3 thousand BOE per day.
In the Eagle Ford Field, first-quarter daily sales volumes averaged 44.7 thousand BOE per day net to PXP compared to first-quarter 2012 average daily sales volumes of 13.9 thousand BOE per day net to PXP. At the end of March, PXP had 7 drilling rigs operating and 31 wells drilled but waiting on completion or connection to pipelines.
In California, first-quarter daily sales volumes averaged 37.2 thousand BOE per day net to PXP compared to the first-quarter 2012 daily sales volume average of 38.6 thousand BOE per day net to PXP. At the end of March, PXP had 4 drilling rigs operating onshore.
In the Haynesville Field, first-quarter daily sales volumes averaged 134.2 MMcf per day net to PXP compared to first-quarter 2012 average daily sales volumes of 173.5 MMcf per day net to PXP. The sales volume decline reflects significantly lower drilling activity. At the end of March, there were 4 drilling rigs operating in which PXP had a working interest.
CAPITAL SPENDING
For the first-quarter of 2013, PXP had cash expenditures of approximately $499.5 million for additions to oil and gas properties and leasehold acquisitions of which $106.1 million was funded by Plains Offshore Operations Inc., PXP's consolidated subsidiary.
COMMODITY PRICES
During the first-quarter of 2013, Brent crude oil price averaged $112.60 per barrel compared to $118.42 per barrel in the first-quarter 2012. PXP's 2013 first-quarter crude oil average realized price per barrel before derivative transactions was $105.16 per barrel, or approximately 93% of Brent, compared to $105.87 per barrel in the first-quarter 2012, or approximately 89% of Brent. Including the impact of derivative transactions, the first-quarter 2013 crude oil average realized price was $102.45 per barrel, or approximately 91% of Brent, compared to $104.38 per barrel in the first-quarter 2012, or 88% of Brent.
During the first-quarter of 2013, the oil average realized price per barrel before derivative transactions, which includes 10.3 thousand barrels per day net to PXP of natural gas liquids, was $99.60 per barrel, or approximately 88% of Brent, compared to $103.45 per barrel in the first-quarter 2012, or 87% of Brent. Including the impact of derivative transactions, the average realized price in the first-quarter 2013 was $97.10 per barrel, or 86% of Brent, compared to $102.01 per barrel in the first-quarter 2012, or 86% of Brent.
During the first-quarter of 2013, NYMEX gas price averaged $3.34 per million British thermal units ("MMBtu") compared to $2.73 per MMBtu in the first-quarter 2012. PXP's 2013 first-quarter natural gas average realized price before derivative transactions was $3.25 per MMBtu, or approximately 97% of NYMEX, compared to $2.56 per MMBtu in the first-quarter 2012, or 94% of NYMEX. Including the impact of derivative transactions, the average realized price in the first-quarter 2013 was $3.67 per MMBtu, or approximately 110% of NYMEX, compared to $3.29 per MMBtu in the first-quarter 2012, or 121% of NYMEX.
MANAGEMENT COMMENT
James C. Flores, Chairman, President and CEO of PXP commented, "The first quarter results confirm the strong growth we have been projecting. Production, revenues, net cash provided by operating activities and earnings saw significant increases during the quarter led by the high rate-of-return crude oil production in the deepwater Gulf of Mexico, the Eagle Ford Field, and California. Our diversified growth strategy, underpinned by a unique combination of oil and natural gas assets and our on-going risk management program, remains our competitive advantage. The Company is centered on executing its highly profitable, lower-risk, long-term, oil-focused growth plan which is complementary to the growth profile and cash margins of the large, low-cost, expandable asset base characteristics of Freeport-McMoRan Copper & Gold Inc. with whom we have entered into a merger transaction."
CONFERENCE CALL
PXP will host a conference call today, Thursday, May 2, at 8:00 a.m. Central time. Investors wishing to participate in the conference call may dial 1-800-567-9836 or 1-973-935-8460. The conference call and replay ID is: 36577090. The replay can be accessed by dialing 1-855-859-2056 or 1-404-537-3406. A live webcast of the conference call will be available in the Investor Information section of PXP's website at www.pxp.com.
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 proposed merger,
-- reserve and production estimates,
-- oil and gas prices,
-- the impact of derivative positions,
-- production expense estimates,
-- 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 and Forms 10-Q, for a discussion of these risks.
References to quantities of oil or natural gas may include amounts that the Company believes will ultimately be produced, but that are not yet classified as "proved reserves" under SEC definitions. In this press release, the Company uses the terms "possible reserves" and "resource potential" to describe the Company's internal estimates of volumes of oil and gas that are not classified as proved reserves but are potentially recoverable through exploratory drilling or additional drilling or recovery techniques. Resource potential is a broader description of potentially recoverable volumes than probable and possible reserves, as defined by the SEC regulations. SEC guidelines prohibit us from including resource potential in filings with the SEC. References in this press release to oil include crude oil, condensate, and natural gas liquid volumes.
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.
IMPORTANT ADDITIONAL INFORMATION ABOUT THE PROPOSED MERGER AND WHERE TO FIND IT:
In connection with the proposed business combination transaction between PXP and FCX, FCX has filed with the SEC a registration statement on Form S-4 that contains a definitive proxy statement of PXP that also constitutes a prospectus of FCX. THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS CONTAIN IMPORTANT INFORMATION ABOUT PXP, FCX, THE PROPOSED TRANSACTION AND RELATED MATTERS. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS CAREFULLY. Investors and security holders may obtain free copies of the registration statement and the proxy statement/prospectus and other documents filed with the SEC by PXP and FCX through the web site maintained by the SEC at www.sec.gov. In addition, investors and security holders may obtain free copies of the registration statement and the proxy statement/prospectus by phone, e-mail or written request by contacting the investor relations department of PXP or FCX at the following:
Plains Exploration & Production Company
700 Milam, Suite 3100
Houston, TX 77002
Attention: Investor Relations
Phone: (713) 579-6000
Email: investor@pxp.com
Freeport-McMoRan Copper & Gold Inc.
333 N. Central Ave.
Phoenix, AZ 85004
Attention: Investor Relations
Phone: (602) 366-8400
Email: ir@fmi.com
PARTICIPANTS IN THE SOLICITATION
PXP and FCX, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies in respect of the proposed transactions contemplated by the merger agreement. Information regarding directors and executive officers of PXP is contained in the proxy statement/prospectus dated April 18, 2013, which is filed with the SEC. Information regarding FCX's directors and executive officers is contained in FCX's definitive proxy statement dated April 27, 2012, which is filed with the SEC.
This document shall not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Plains Exploration & Production Company
Consolidated Statements of Income
(in thousands, except per share data)
Three Months Ended
March 31,
---------
2013 2012
---- ----
(Unaudited)
Revenues
Oil sales $1,158,438 $467,488
Gas sales 72,331 53,524
Other operating revenues 1,346 3,263
-----
1,232,115 524,275
--------- -------
Costs and Expenses
Lease operating expenses 170,233 83,006
Steam gas costs 14,604 11,124
Electricity 11,056 11,374
Production and ad valorem taxes 28,632 12,631
Gathering and transportation
expenses 22,618 16,272
General and administrative
G&A 44,765 38,382
Acquisition and merger related costs 1,199 -
Depreciation, depletion and
amortization 530,460 177,697
Accretion 10,015 3,753
Other operating expense (income) 1,196 (1,261)
-----
834,778 352,978
------- -------
Income from Operations 397,337 171,297
Other (Expense) Income
Interest expense (140,998) (45,253)
Debt extinguishment costs (18,053) -
Loss on mark-to-market derivative
contracts (202,023) (109,050)
Gain (loss) on investment measured
at fair value 15,544 (135,930)
Other income (expense) 395 (405)
---
Income (Loss) Before Income
Taxes 52,202 (119,341)
Income tax (expense) benefit
Current (4,790) (19)
Deferred (15,618) 46,057
Net Income (Loss) 31,794 (73,303)
Net income attributable to
noncontrolling interest (9,209) (9,016)
in the form of preferred stock of
subsidiary
Net Income (Loss) Attributable
to Common Stockholders $22,585 $(82,319)
======= ========
Earnings (Loss) per Common Share
Basic $0.17 $(0.64)
Diluted $0.17 $(0.64)
Weighted Average Common Shares Outstanding
Basic 130,284 129,348
=====
Diluted 132,930 129,348
=======
Plains Exploration & Production Company
Operating Data
Three Months Ended
March 31,
---------
2013 2012
---- ----
(Unaudited)
Daily Average Volumes
Oil and liquids
sales (Bbls) 129,233 49,657
Gas (Mcf)
Production 250,044 234,001
Used as fuel 3,140 4,705
Sales 246,904 229,296
BOE
Production 170,907 88,657
Sales 170,384 87,873
Unit Economics (in dollars)
Average Index
Prices
ICE Brent Price
per Bbl $112.60 $118.42
NYMEX Price per
Bbl 94.36 103.03
NYMEX Price per
Mcf 3.34 2.73
Average Realized
Sales Price Before
Derivative
Transactions
Oil (per Bbl) $99.60 $103.45
Gas (per Mcf) 3.25 2.56
Per BOE 80.26 65.16
Cash Margin per BOE
(1)
Oil and gas
revenues $80.26 $65.16
Costs and
expenses
Lease operating
expenses (11.10) (10.38)
Steam gas costs (0.95) (1.39)
Electricity (0.72) (1.42)
Production and
ad valorem
taxes (1.87) (1.58)
Gathering and
transportation (1.47) (2.03)
Oil and gas
related DD&A (33.81) (21.64)
------ ------
Gross margin
(GAAP) 30.34 26.72
Oil and gas related DD&A 33.81 21.64
Realized (loss) gain on
derivative instruments (1.29) 1.08
-----
Cash margin
(non-GAAP) $62.86 $49.44
====== ======
Oil and gas capital expenditures accrued ($ in
thousands) (2) $472,711 $439,939
(1) Cash margin per BOE
(a non-GAAP
measure) is
calculated by
adjusting gross
margin per BOE (a
GAAP measure) to
include the
realized gain and
loss on derivative
instruments and to
exclude DD&A.
Management
believes this
presentation may
be helpful to
investors as it
represents the
cash generated by
our oil and gas
production that is
available for,
among other
things, capital
expenditures and
debt service. PXP
management uses
this information
to analyze
operating trends
for comparative
purposes within
the industry.
This measure is
not intended to
replace the GAAP
statistic but
rather to provide
additional
information that
may be helpful in
evaluating trends
and performance.
(2) Additions to oil
and gas properties
reported in our
consolidated
statement of cash
flows differ from
the accrual basis
amounts reflected
above due to the
timing of cash
payments.
Excludes
acquisitions.
Plains Exploration & Production Company
Reconciliation of GAAP to Non-GAAP
Measure
Three Months Ended March 31,
2013
-----------------------------
Oil Gas BOE
--- --- ---
(per Bbl) (per Mcf)
Average Realized Sales
Price
Average realized price
before derivative
instruments (GAAP) (1) $99.60 $3.25 $80.26
Realized (loss) gain on
derivative instruments (2.50) 0.42 (1.29)
------
Realized cash price
including derivative
settlements (non-GAAP) $97.10 $3.67 $78.97
====== ===== ======
Three Months Ended March 31,
2012
-----------------------------
Oil Gas BOE
--- --- ---
(per Bbl) (per Mcf)
Average Realized Sales
Price
Average realized price
before derivative
instruments (GAAP) (1) $103.45 $2.56 $65.16
Realized (loss) gain on
derivative instruments (1.44) 0.73 1.08
------
Realized cash price
including derivative
settlements (non-GAAP) $102.01 $3.29 $66.24
======= ===== ======
(1) Excludes
the impact
of
production
costs and
expenses
and DD&A.
Plains Exploration & Production Company
Consolidated Statements of Cash Flows
(in thousands of dollars)
Three Months Ended
March 31,
---------
2013 2012
---- ----
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $31,794 $(73,303)
Items not affecting cash flows from operating
activities
Depreciation,
depletion,
amortization and
accretion 540,475 181,450
Deferred income tax
expense (benefit) 15,618 (46,057)
Debt extinguishment
costs (4,903) -
Loss on mark-to-
market derivative
contracts 202,023 109,050
(Gain) loss on
investment
measured at fair
value (15,544) 135,930
Non-cash
compensation 13,496 18,232
Other non-cash
items 2,706 1,421
Change in assets
and liabilities
from operating
activities 33,058 8,688
------ -----
Net cash provided
by operating
activities 818,723 335,411
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to oil
and gas properties (467,737) (401,311)
Acquisition of oil
and gas properties (31,748) (16,573)
Proceeds from sales
of oil and gas
properties, net of - 42,656
costs and expenses
Derivative
settlements (13,516) 9,321
Additions to other
property and
equipment (7,909) (2,904)
Other (681) -
Net cash used in
investing
activities (521,591) (368,811)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings from
revolving credit
facilities 3,328,700 2,515,500
Repayments of
revolving credit
facilities (3,573,500) (2,440,500)
Principal payments
of long-term debt (171,180) -
Costs incurred in
connection with
financing
arrangements (697) (125)
Purchase of
treasury stock - (88,490)
Distributions to
holders of
noncontrolling
interest in the (6,750) (6,750)
form of preferred stock of
subsidiary
---
Net cash used in
financing
activities (423,427) (20,365)
-------- -------
Net decrease in
cash and cash
equivalents (126,295) (53,765)
Cash and cash
equivalents,
beginning of
period 180,565 419,098
------- -------
Cash and cash
equivalents, end
of period $54,270 $365,333
======= ========
Plains Exploration & Production Company
Consolidated Balance Sheets
(in thousands of dollars)
March 31, December 31,
2013 2012
---- ----
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $54,270 $180,565
Accounts receivable 563,313 584,722
Commodity derivative contracts 2,892 56,208
Inventories 33,830 27,672
Investment 833,767 818,223
Deferred income taxes 227,051 150,876
Prepaid expenses and other current assets 45,062 21,464
------
1,760,185 1,839,730
--------- ---------
Property and Equipment, at cost
Oil and natural gas properties - full cost method
Subject to amortization 19,236,999 18,814,337
Not subject to amortization 3,700,129 3,631,475
Other property and equipment 164,890 153,344
-------
23,102,018 22,599,156
Less allowance for depreciation, depletion,
amortization and impairment (8,392,756) (7,870,356)
-----------
14,709,262 14,728,800
---------- ----------
Goodwill 535,140 535,140
------- -------
Commodity Derivative Contracts - 903
--- ---
Other Assets 185,787 193,710
------- -------
$17,190,374 $17,298,283
=========== ===========
LIABILITIES AND EQUITY
Current Liabilities
Accounts payable $421,405 $431,422
Commodity derivative contracts 62,569 18,942
Royalties and revenues payable 165,520 139,717
Interest payable 142,285 105,440
Other current liabilities 113,384 120,192
Current maturities of long-term debt 164,288 164,288
-------
1,069,451 980,001
--------- -------
Long-Term Debt 9,559,247 9,979,369
--------- ---------
Other Long-Term Liabilities
Asset retirement obligation 579,089 565,989
Commodity derivative contracts 118,427 26,810
Other 17,837 19,105
-----
715,353 611,904
------- -------
Deferred Income Taxes 1,863,678 1,770,568
--------- ---------
Equity
Stockholders' equity
Common stock 1,439 1,439
Additional paid-in capital 3,413,932 3,437,826
Retained earnings 658,772 637,411
Treasury stock, at cost (533,920) (560,198)
---------
3,540,223 3,516,478
Noncontrolling interest
Preferred stock of subsidiary 442,422 439,963
------- -------
3,982,645 3,956,441
--------- ---------
$17,190,374 $17,298,283
=========== ===========
Plains Exploration & Production Company
Summary of Open Derivative Positions
At May 1, 2013
Average
Instrument Daily Average Deferred
Period (1) Type Volumes Price (2) Premium Index
--------- ---- ------- -------- ------- -----
Sales of Crude Oil Production
2013
May - Dec Swap contracts(3) 40,000 Bbls $109.23 - Brent
May - Dec Put options(4) 13,000 Bbls $100.00 Floor with an $80.00 Limit $6.800 per Bbl Brent
May - Dec Three-way collars(5) 25,000 Bbls $100.00 Floor with an $80.00 Limit - Brent
$124.29 Ceiling
May - Dec Three-way collars(5) 5,000 Bbls $90.00 Floor with a $70.00 Limit - Brent
$126.08 Ceiling
May - Dec Put options(4) 17,000 Bbls $90.00 Floor with a $70.00 Limit $6.253 per Bbl Brent
2014
Jan - Dec Put options(4) 5,000 Bbls $100.00 Floor with an $80.00 Limit $7.110 per Bbl Brent
Jan - Dec Put options(4) 30,000 Bbls $95.00 Floor with a $75.00 Limit $6.091 per Bbl Brent
Jan - Dec Put options(4) 75,000 Bbls $90.00 Floor with a $70.00 Limit $5.739 per Bbl Brent
2015
Jan - Dec Put options(4) 84,000 Bbls $90.00 Floor with a $70.00 Limit $6.889 per Bbl Brent
Sales of Natural Gas Production
2013
May - Dec Swap contracts(3) 110,000 MMBtu $4.27 - Henry Hub
2014
Jan - Dec Swap contracts(3) 100,000 MMBtu $4.09 - Henry Hub
(1) All of our
derivatives
are
settled
monthly.
(2) The average
strike
prices do
not
reflect
any
premiums
to
purchase
the put
options.
(3) 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.
(4) 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.
(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.
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.
Derivative Settlements
(in thousands of dollars)
The following table reflects cash
(payments) receipts for derivatives
attributable to the stated production
periods.
Three Months Ended
March 31,
---------
2013 2012
---- ----
Oil sales $(29,086) $(6,509)
Natural gas sales 9,225 15,177
$(19,861) $8,668
======== ======
Plains Exploration & Production
Company
Reconciliation of GAAP to Non-GAAP
Measure
The following table reconciles net
income (loss) (GAAP) to adjusted net
income and adjusted net income
attributable to common stockholders
(non-GAAP) for the three months
ended March 31, 2013 and 2012.
Adjusted net income and adjusted net
income attributable to common
stockholders exclude certain items
affecting the comparability of
operating results and the related tax
Three Months Ended
March 31,
---------
2013 2012
---- ----
(millions of
dollars)
Net income (loss) (GAAP) $31.8 $(73.3)
Unrealized loss on mark-to-market derivative contracts 202.0 109.1
Realized (loss) gain on mark-to-market derivative contracts (1) (19.9) 8.7
Unrealized (gain) loss on investment measured at fair value (15.5) 135.9
Debt extinguishment costs 18.1 -
Acquisition and merger related costs 1.2 -
Adjust income taxes (2) (68.9) (94.4)
------
Adjusted net income (non-GAAP) $148.8 $86.0
Net income attributable to noncontrolling interest in the form (9.2) (9.0)
of preferred stock of subsidiary
Adjusted net income attributable to common stockholders (non-GAAP) $139.6 $77.0
====== =====
(1) The amounts
presented in
the above
table differ
from the
adjustments
reflected in
the
calculation
of operating
cash flow on
the
following
page due to
the accrued
amounts
reflected in
the income
statement
versus the
actual cash
received or
paid
reflected in
the
consolidated
statement of
cash flows.
(2) Tax rates
assumed
based upon
adjusted
earnings are
38% and 36%
for the
three months
ended March
31, 2013 and
2012,
respectively.
Tax rates
exclude the
effects of
nonrecurring
tax related
expenses and
benefits.
Plains Exploration & Production Company
Reconciliation of GAAP to Non-GAAP
Measure
The following table reconciles Net Cash
Provided by Operating Activities (GAAP)
to Operating Cash Flow (non-GAAP) for
the three months ended March 31, 2013
and 2012. Management believes this
presentation may be useful to investors.
PXP management uses this information
for comparative purposes within the
industry and as a means of measuring the
Company's ability to fund capital
expenditures and service debt. This
Operating cash flow is calculated by
adjusting net income to add back certain
non-cash and non-operating items,
including debt extinguishment costs, the
unrealized gain and loss on mark-to-
market derivative contracts, to include
derivative cash settlements for the
realized gain and loss on mark-to-
market derivative contracts that are
classified as investing activities for
GAAP purposes, to exclude the unrealized
Three Months Ended
March 31,
---------
2013 2012
---- ----
(millions of
dollars)
Net income (loss) $31.8 $(73.3)
Items not affecting operating cash flows
Depreciation, depletion, amortization and
accretion 540.5 181.4
Deferred income tax expense (benefit) 15.6 (46.0)
Debt extinguishment costs 18.1 -
Unrealized loss on mark-to-market derivative
contracts 202.0 109.1
Unrealized (gain) loss on investment measured at
fair value (15.5) 135.9
Acquisition and merger related costs 1.2 -
Non-cash compensation 13.5 18.2
Other non-cash items 2.7 1.4
Realized (loss) gain on mark-to-market
derivative contracts (13.5) 9.3
Distributions to holders of noncontrolling
interest in the
form of preferred stock of subsidiary (6.8) (6.8)
Operating cash flow (non-GAAP) $789.6 $329.2
====== ======
Reconciliation of non-GAAP to GAAP measure
Operating cash flow (non-GAAP) $789.6 $329.2
Changes in assets and liabilities from operating activities 33.0 8.7
Realized loss (gain) on mark-to-market derivative contracts 13.5 (9.3)
Acquisition and merger related costs (1.2) -
Cash portion of debt extinguishment costs (23.0) -
Distributions to holders of noncontrolling interest in the
form of preferred stock of subsidiary 6.8 6.8
--- ---
Net cash provided by operating activities (GAAP) $818.7 $335.4
====== ======
SOURCE Plains Exploration & Production Company
