PXP Announces Pricing of $3.0 Billion of Senior Notes

Plains Exploration & Production Company

today announced that it has priced an underwritten public offering of $3.0 billion of senior notes, consisting of $1.5 billion in aggregate principal amount of 6 1/2% Senior Notes due 2020, issued at par, and $1.5 billion in aggregate principal amount of 6 7/8% Senior Notes due 2023, issued at par (collectively, the "notes"). Interest is payable on the notes due 2020 on May 15 and November 15 of each year, beginning on May 15, 2013. Interest is payable on the notes due 2023 on February 15 and August 15 of each year, beginning on February 15, 2013. The first interest payment will consist of interest from the scheduled closing date of October 26, 2012 to May 15, 2013 or February 15, 2013, as applicable. The closing of the offering is subject to the satisfaction of customary closing conditions. The notes are being issued to fund a portion of the consideration for PXP's previously announced acquisition of oil and gas interests in the Gulf of Mexico from BP Exploration & Production Inc. and BP America Production Company (collectively, "BP") and Shell Offshore Inc. Pending the use of proceeds for such purpose, PXP expects to use a portion of the net proceeds from the offering to repay borrowings outstanding under its senior revolving credit facility. If the BP acquisition does not close on or prior to March 15, 2013, or if the BP purchase agreement is terminated at any time prior to consummation thereof, PXP will be required to redeem all the notes of each series in cash at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest to the date of redemption. Additionally, if PXP determines it is reasonably likely that the BP acquisition will not close on or prior to March 15, 2013, or the BP purchase agreement will be terminated at any time prior thereto, PXP may, at its option, redeem all but not less than all of the notes then outstanding in cash at a redemption price equal to 100% of their principal amount, plus accrued and unpaid interest to the date of redemption.