Nov. 5, 2009 (PR Newswire) --

HOUSTON, Nov. 5 /PRNewswire-FirstCall/ -- Plains Exploration & Production Company (NYSE: PXP) ("PXP" or the "Company") announces third quarter 2009 financial and operating results and files full-year 2010 guidance with the SEC on a Form 8-K.

Revenues of $312.2 million generated $39.3 million of net income, or $0.30 per diluted share, in the third quarter 2009. Net income including realized gains and losses and excluding unrealized gains and losses on our mark-to-market derivative contracts was $185.3 million, or $1.40 per diluted share (a non-GAAP measure). Net cash provided by operating activities was $168.2 million and operating cash flow was $427.9 million (a non-GAAP measure).

A reconciliation of non-GAAP financial measures used in this release to comparable GAAP financial measures is included with the financial tables in this release.

James C. Flores, Chairman, President and CEO of PXP commented, "We delivered solid results for the third quarter and are financially and operationally well positioned to continue delivering strong and consistent reserve and production growth. PXP reports significant progress in lowering costs, increasing production, strengthening liquidity and expanding its resource potential during today's challenging environment. Excluding the impact of our 2008 divestments, increased production from the Haynesville Shale and Flatrock properties resulted in an 8% increase in sales volumes in the first nine months of 2009 compared to the same period a year ago. Lease operating expenses per unit decreased 7% for the first nine months due to the success of our cost reduction program. The favorable quarterly results again highlight our sound execution of the strategic plan, successful hedge program, and high-quality asset base.

"Our 2010 capital spending plan leverages on those strengths and allocates capital to asset areas with the greatest returns and highest growth prospects. PXP's Board of Directors approved a $900 million to $1.1 billion 2010 capital budget versus an estimated $1.55 billion 2009 capital budget. The 2010 capital investment is predominately focused on the continued development of our substantial Haynesville Shale acreage position, our large, high free-cash flow California oil business and our Texas Panhandle, South Texas and Gulf of Mexico asset areas. Approximately 10% of the 2010 capital plan is allocated to Gulf of Mexico exploration. We continue to target reserve growth of 20% through 2011 and production growth of 8-10% in 2010 and 2011 driven by the Haynesville Shale layered on top of our stable oil production base. PXP remains focused on cost control, operational execution and reserve and production growth from its balanced portfolio of excellent assets."

OPERATIONAL HIGHLIGHTS

-- Outstanding drilling results continue in the Haynesville Shale and
production from this resource base is growing quickly. Third quarter
average daily production of approximately 48 million cubic feet
equivalent (MMCFE) net to PXP has ramped up from 14 MMCFE per day net
during the first quarter 2009 and 28 MMCFE per day net in the second
quarter. Production is expected to continue to increase and exceed
approximately 70 MMCFE per day net by year-end 2009 and approximately
125 MMCFE net per day by year-end 2010. PXP and its partner, and
operator, Chesapeake Energy Corporation (NYSE: CHK) are currently
operating 35 rigs and expect to operate an average of 40 rigs in 2010,
plus 15 or more rigs operated by others on our acreage consistent with
this year's activity.

Two notable Haynesville Shale wells completed by Chesapeake are as
follows: The Caspiana 13-15-12 H-1 in Caddo Parish, LA achieved a
peak rate of 20.2 million cubic feet (MMCF) per day; and The Bradway
24-15-12 H-1 in Caddo Parish, LA achieved a peak rate of 18.6 MMCF
per day.

-- The Flatrock area wells averaged 59 MMCFE per day net to PXP in the
third quarter of 2009.  As previously reported, the Flatrock #5 well
was re-completed in the primary Rob-L zone in September 2009. The
Flatrock #3 well is currently offline and will be re-completed in the
fourth quarter of 2009. The Flatrock #4 well was shut in during August
2009 because of a mechanical (not reservoir) issue associated with the
well bore and is expected to recommence production by year-end 2009.

-- Positive drilling results at the Blueberry Hill exploratory well,
operated by McMoRan and located on Louisiana State Lease 340 in the
Gulf of Mexico, indicate a discovery. A second sidetrack well was
drilled to a total depth of 21,942 feet in October 2009. The operator
plans to temporarily abandon the sidetrack #2 well and drill an offset
appraisal well approximately 2,000 feet southeast with a proposed total
depth of 21,850 feet. Offset drilling operations are expected to
commence in November 2009. Development planning is underway. Blueberry
Hill is located 11 miles southeast of Flatrock. PXP holds a 47.9%
working interest.

-- The Hurricane Deep sidetrack well, operated by Chevron and located on
South Marsh Island 217, on the southern flank of the Flatrock structure
has a proposed total depth of 21,750 feet and is targeting the
significant Gyro sand encountered in the Hurricane Deep well. The
operator plans to commence sidetrack operations in the fourth quarter
of 2009. PXP holds a 30.0% working interest.

-- Three significant Gulf of Mexico exploration prospects with a total
reserve potential of more than 200 million BOE net to PXP are currently
drilling:

-  The Davy Jones exploration prospect, operated by McMoRan and located
on South Marsh Island Block 230 is drilling towards a proposed total
depth of 28,000 feet. PXP holds a 27.7% working interest.

-  The Rickenbacker exploration prospect, operated by Anadarko and
located on Keathley Canyon Block 470, is drilling towards a
proposed total depth of approximately 33,700 feet. PXP holds a
15.0% working interest.

-  The Lucius exploration prospect, operated by Anadarko and located on
Keathley Canyon Block 875, began drilling operations in October and
is drilling towards a proposed total depth of 21,000 feet. PXP holds
a 33.3% working interest.

-- The Northwood exploration prospect, operated by Chevron and located on
Green Canyon Block 945, was drilled to a total depth of 35,955 feet and
is being plugged and abandoned.

DERIVATIVE SUMMARY

Approximately 80% of our 2009 estimated sales volumes, using the mid-point of our annual guidance, are protected by oil and natural gas derivative positions and natural gas physical purchases. For 2009, natural gas volumes are protected with $10 by $20 collars on 150,000 MMBtu per day while crude oil volumes have put options with a $55 strike price on 32,500 barrels per day. Approximately 68% of our 2010 estimated sales volumes, using the mid-point of our annual guidance, are protected by oil and natural gas derivative positions and natural gas physical purchases. For 2010, natural gas volumes are protected by three-way collars having a $6.12 floor with $4.64 limit and an $8.00 ceiling on 85,000 MMBtu per day, and crude oil volumes for 2010 have put options with a $55 strike price on 40,000 barrels per day. A summary of PXP's open commodity derivative positions is included with the financial tables in this release.

2010 FULL-YEAR GUIDANCE

PXP filed full-year 2010 guidance with the SEC in a Form 8-K.

CONFERENCE CALL

PXP will host a conference call today, Thursday, November 5, 2009 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: 34949709. The replay can be accessed by dialing 1-800-642-1687 or 1-706-645-9291. 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 "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 statement. These include statements regarding:

* 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, for the year ended December 31, 2008, for a discussion of these risks.

All forward-looking statements in this report 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 report 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.