Plains Divests Assets For $1.75 Billion

Houston-based Plains Exploration & Production Co. announced it plans to sell off about $1.75 billion in assets.
According to a company release, Los Angeles-based Occidental Petroleum Corp. will purchase $1.55 billion worth of assets, while the Fort Worth-based XTO Energy Inc. will take control of $200 million.
Among the assets divested to Occidental in the deal are 50 percent of Plains’ working interests in oil and gas properties located in the Permian Basin, West Texas and New Mexico. Plains will retain a 50 percent working interest while the deal calls for Occidental to operate the properties. Plains also sold a 50 percent interest in its oil and gas properties in the Piceance Basin in Colorado to Occidental, but will remain the operating partner.
The Permian Basin properties currently generate sales volumes of about 18,000 barrels of oil equivalent per day and had about 91 million barrels of oil equivalent estimated proved reserves as of December 31, 2006. The Piceance properties currently generate sales volumes of about 9,000 BOEPD and, based on Plains’ estimates, have about 64 million BOE estimated proved reserves.
Plains has also sold its interests in the San Juan Basin in New Mexico and in the Barnett Shale in Texas to XTO Energy.
The properties currently generate sales volumes of about 3,000 BOEPD and have about 17 million BOE estimated proved reserves. Under the terms of the agreement, Plains will receive $180 million of cash and XTO’s 50 percent working interest in the Big Mac 3-D prospect area located on the Texas Gulf Coast.
Plains will have a 100 percent working interest in the Big Mac 3-D prospect area, covering approximately 50,000 net lease acres.



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