PXP. Plains Exploration & Production Company Credit Suisse Energy Summit February 2007

Transcription

1 Plains Exploration & Production Company Credit Suisse Energy Summit February 2007

2 Corporate Information Corporate Headquarters Plains Exploration & Production Company 700 Milam, Suite 3100 Houston, Texas Contacts James C. Flores - Chairman, President & CEO Winston M. Talbert Exec. Vice President & CFO Scott Winters Vice President Investor Relations Joanna Pankey - Investor Relations Analyst Phone: Toll Free: investor@plainsxp.com Web Site: Forward Looking Statements Except for the historical information contained herein, the matters discussed in this presentation are forward-looking statements as defined by the Securities and Exchange Commission. These statements involve certain assumptions made based on its experience and perception of historical trends, current conditions, expected future developments and other factors it believes are appropriate under the circumstances. The forward-looking statements are subject to a number of known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially. These risks and uncertainties include, among other things, uncertainties inherent in the exploration for and development and production of oil & gas and in estimating reserves, unexpected future capital expenditures, general economic conditions, oil and gas price volatility, the success of our risk management activities, competition, regulatory changes and other factors discussed in s filings with the Securities and Exchange Commission. The information in this handout is intended solely for your personal use. It is not for reproduction or distribution to others without s consent. 2

3 Delivering Results 2006 Previously Announced Accomplishments Operationally Participated in THREE significant exploration discoveries Enhanced s GOM Miocene exploration portfolio Generated $1.6 Billion in proceeds from asset sales 3

4 Delivering Results 2006 Previously Announced Accomplishments Financially Strengthened balance sheet Repurchased $100 million or 2.5 million shares as of 7/31/06: $400 million remaining of $500 million authorization Reported 82 percent YOY increase in 3rd QTR cash margin per BOE 4

5 Unaudited Pro Forma Balance Sheet For Announced Transactions ASSETS Current Assets Cash Other Property and Equipment, net Other Assets September 30, 2006 (in millions of dollars) Historical $ , $ 3,216.8 Proforma $ , $ 2,577.8 LIABILITIES AND STOCKHOLDERS'EQUITY Current Liabilities Commodity derivative contracts Other Long-Term Debt Other Long-Term Liabilities Commodity derivative contracts Other Deferred Income Taxes Stockholders'Equity $ $ 3,216.8 $ ,294.3 $ 2, % 100% 90% 40% 5

6 Commodity Price Protection Production Period Instrument Type Daily Volumes Average Price 2007 Crude Oil Put Options 50,000 Bbls 90+ Percent of Est. Production $55.00 Strike Price 2008 Crude Oil Put Options 42,000 Bbls $55.00 Strike Price 6

7 Outlook 2007 Significant exploration potential Large high-return development program Strong balance sheet Downside commodity price protection 7

8 Value Creation Strategy GROWTH Exploration California land value Acquisitions Meaningful value growth per share DEVELOP Legacy California oil fields Substantial cash flow per share Today Future 8

9 $610 $600 $430 $ E 2007E Developm ent Exploration Excludes acquisitions, includes capitalized interest and G&A. Depending on project timing up to $55 million of the 2007 capital budget may be spent in late

10 Development Onshore California 330 MMBOE proved reserves (1) 24 yr R/P Large resource potential 2,500+ future well locations Arroyo Grande San Joaquin Valley Los Angeles Basin (1) 2005 year-end proved reserves adjusted to reflect recently completed asset sale. 10

11 Exploration Miocene Trend Gulf of Mexico Building on historical successes 30 prospects; up to 10 planned for 2007 Flatrock Mound Point South New Orleans Breton Sound Future participation dependent on continued success Experienced partners Hurricane Deep Cas Friesian Caesar Big Foot Discoveries Discoveries Sold Prospects 1 st Qtr Drilling 11

12 Volume Growth Potential from 2007 Risked Exploration Success 55,000 BOEPD* 10% CAGR with 2007 Risked Exploration Success 3% CAGR from Core Asset Development Development Exploration * Mid-point of 2007 guidance. 12

13 Delivering Future Value Operationally Develop Legacy oil fields Grow through Exploration California land value Acquisitions Financially Capital discipline Strong balance sheet through Earnings Monetization of exploration & real estate Share repurchase 13

14 GAAP to Non-GAAP Reconciliation The following table reconciles gross margin before DD&A (GAAP) to cash margin (Non-GAAP) for the three months ended September 30, 2006 and Cash margin is calculated by adjusting gross margin before DD&A to exclude hedging expense included in oil and gas revenues and to deduct cash derivative settlements. 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. management uses this information to analyze operating trends and for comparative purposes within the industry. This measure is not intended to replace the GAAP statistic but to provide additional information that may be helpful in evaluating the Company's operational trends and performance. Three Months Ended September 30, Cash Margin per BOE (1) Oil and gas revenues Costs and expenses Lease operating expenses Steam gas costs Electricity Production and ad valorem taxes Gathering and transportation Gross margin before DD&A (GAAP) Hedging expense included in oil and gas revenues Cash derivative settlements Oil & gas production Natural gas purchases Cash margin (Non-GAAP) 2006 $ (9.03) (2.82) (1.79) (1.25) (0.41) (4.05) (0.52) $ $ (6.41) (3.17) (1.58) (0.90) (0.44) (18.17) - $ (1) In 2005 gas revenues included amounts attributable to buy-sell contracts related to our thermal recovery operations in California and associated costs were included in steam gas costs. As a result of our adoption of EITF effective January 1, 2006, in 2006 certain costs associated with such contracts are reflected as a reduction in gas revenues and the associated volumes are not included in sales volumes. Amounts per BOE reflected in the foregoing table are based on production volumes for 2005 and sales volumes for

15 Plains Exploration & Production Company Credit Suisse Energy Summit February 2007