(By Balaseshan) Plains Exploration & Production Co. (NYSE:PXP)
said it has agreed to buy certain oil and natural gas interests in Gulf
of Mexico from BP Plc (NYSE:BP) for $5.55 billion in cash.
PXP will buy interests in and near the Holstein, Diana-Hoover, Horn
Mountain, Marlin Hub and Ram Powell Fields located in the Gulf of
Mexico, from BP Exploration & Production Inc. and BP America
Under the terms of the BP purchase and sale agreement, PXP made a
performance deposit of $555 million with BP, which BP will be permitted
to retain as liquidated damages if it terminates the agreement under
PXP expects that the acquisition of oil and natural gas interests
will close on November 30, 2012, and will be effective as of October 1,
2012; however, there can be no assurance that all of the conditions to
closing the BP Acquisition will be satisfied.
In a separate release, PXP has agreed to acquire the balance 50%
working interest in the Holstein Field, located in the Gulf of Mexico,
from Royal Dutch Shell Plc's (NYSE:RDS.A) unit Shell Offshore Inc., in
exchange for $560 million in cash.
Certain financial institutions have agreed to provide PXP with senior
secured revolving and term loan credit facilities in an aggregate
amount of $5.0 billion, with an initial Borrowing Base of $5.3 billion.
The parties have also agreed to provide PXP with senior unsecured loans
of up to $2.0 billion pursuant to a new senior unsecured bridge credit
The proceeds of the credit facilities are expected to be applied to
refinance certain existing indebtedness of PXP, to pay the cash
consideration for the acquisitions, to pay the fees and expenses
incurred in connection with the acquisitions and related financing
transactions, and other general corporate purposes.
PXP closed Friday's regular session up 1.43% at $40.33, while BP ended up 1.82% at $41.93.