PXP Announces Sale Of Assets To MMR For Cash And Shares

Plains Exploration & Production Company PXP has announced the sale of its Gulf of Mexico shelf properties to McMoRan Exploration MMR for $75M cash and 51M shares, Dahlman Rose reports. Dahlman writes "At today's closing price of $15.96 for MMR shares, this deal is worth $889MM to Plains. Plains previously announced that it sought to realize $1-2Bn from its Gulf of Mexico asset sales. This transaction puts the company on target toward reaching that goal, and it also gives Plains significant exposure to the home-run potential of the GOM shelf without having to invest additional cash CAPEX. Pro-forma for the transaction and $900MM in convertible securities that MMR intends to offer, Plains will have a 23% interest in McMoRan's fully diluted 223MM shares." Dahlman maintains its Buy rating and $33 price target for Plains Exploration & Production, which closed yesterday at $26.56.