Plains Exploration & Production Company
PXP provides updates on 2012 third-quarter
preliminary production estimates and on initial financing of the previously
announced Gulf of Mexico acquisition.
PRODUCTION UPDATE
PXP's 2012 third-quarter preliminary daily sales volumes averaged
approximately 105 thousand barrels of oil equivalent per day. Estimated
third-quarter average daily oil/liquids sales volumes increased approximately
5% compared to second-quarter 2012 and represented approximately 60% of total
quarterly sales volumes.
ACQUISITION FINANCING UPDATE
PXP has successfully syndicated $7.0 billion of committed financing to a group
of banks and institutional lenders for the $6.11 billion proposed acquisition.
The $7.0 billion of committed financing will be comprised of a $3.0 billion
senior secured five-year revolving credit facility, a $750.0 million senior
secured five-year term loan, a $1.25 billion senior secured seven-year term
loan and a $2.0 billion senior unsecured bridge facility. The new senior
secured credit facilities of $5.0 billion will be governed by a borrowing base
initially set at $5.3 billion. The pricing and terms of the credit facilities
are consistent with what was originally offered, with pricing on the
seven-year term loan being flexed tighter as a result of strong demand.
The pricing on the revolving credit facility is the same as PXP's existing
facility except there is a 0.25% increase while either the five-year or
seven-year term loans are outstanding. The five-year term loans bear interest
at a rate per year of Eurodollar Rate plus 3.00%. The seven-year term loans
originally were to bear interest at a rate per year of Eurodollar Rate plus
3.25%-3.50%, which we expect to tighten given demand, with a minimum
Eurodollar Rate of 1.00%. The financing is subject to the execution of
satisfactory definitive documentation and other customary closing conditions.
Winston M. Talbert, Executive Vice President and Chief Financial Officer of
PXP commented, "PXP is pleased with the overwhelming response to the Company's
Gulf of Mexico acquisition financing plan. The plan is supported by the strong
oil production profile from the Gulf of Mexico assets and underpinned by our
growing onshore oil business. As previously reported we are well underway on
our hedging program and have now completed the bank and term loan facilities
syndication process to facilitate the closing of the Gulf of Mexico
acquisition in the fourth quarter."
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