UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 2, 2012
PLAINS EXPLORATION & PRODUCTION COMPANY
(Exact name of registrant as specified in charter)
| | | | |
| Delaware | | | | 33-0430755 |
| (State of Incorporation) | | | | (I.R.S. Employer Identification No.) |
001-31470
(Commission File No.)
700 Milam, Suite 3100
Houston, Texas 77002
(Address of Principal Executive Offices)
(Zip Code)
Registrant’s telephone number, including area code: (713) 579-6000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 Results of Operations and Financial Condition
Item 7.01 Regulation FD Disclosure
On August 2, 2012, Plains Exploration & Production Company (“PXP”) issued a press release announcing second quarter 2012 results. The press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein.
Pursuant to Item 7.01, PXP is updating its 2012 full-year operating and financial guidance.
The information presented herein under Item 2.02 and Item 7.01 shall not be deemed “filed” under the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such a filing.
Statement Regarding Forward-Looking Statements
This Report on Form 8-K contains forward-looking information regarding PXP that is intended to be covered by the safe harbor “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. All statements included in this Report that address activities, events or developments that PXP expects, believes or anticipates will or may occur in the future are forward-looking statements. These factors include, among other things:
| | • | | reserve and production estimates; |
| | • | | the impact of derivative positions; |
| | • | | production expense estimates; |
| | • | | future financial performance; |
| | • | | capital and credit market conditions; |
| | • | | planned capital expenditures; and |
| | • | | other matters that are discussed in PXP’s filings with the SEC. |
These statements are based on our current expectations and projections about future events and involve known and unknown risks, uncertainties, and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. Please refer to our filings with the SEC, including our Form 10-K, for a discussion of these risks.
All forward-looking statements in this report are made as of the date hereof, and you should not place undue reliance on these statements without also considering the risks and uncertainties associated with these statements and our business that are discussed in this report and our other filings with the SEC. Moreover, although we believe the expectations reflected in the forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material. Except as required by law, we do not intend to update these forward-looking statements and information.
Guidance Update
PXP updated its 2012 full-year operating and financial guidance to reflect higher sales volumes, higher oil volumes as a percentage of total volumes, updated oil price realizations, and higher depreciation, depletion and amortization expense per barrel of oil equivalent.
The following table and accompanying notes reflect current estimates of certain results for the full year 2012 for PXP. These estimates are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management’s assumptions and our future performance are both subject to a wide range of business risks and uncertainties and there is no assurance
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that these goals and estimates can or will be met. Any number of factors could cause actual results to differ materially from those in the following table and accompanying notes, including but not limited to the factors discussed above. The estimates set forth below are given as of the date hereof and are only based on information available as of the date hereof. Further information on risks and uncertainties is available in our filings with the SEC, and we encourage you to review these filings.
Plains Exploration & Production Company
Full-Year 2012 Operating and Financial Guidance
| | | | | | | | |
| | | Year Ended
December 31, 2012 |
Production Volumes (MBOE/day) | | | | | | | | |
Total Production volumes sold | | | | | | 95 — 97 | | |
Oil | | | | | | 57% — 60% | | |
NGLs | | | | | | 3% — 4% | | |
Natural Gas | | | | | | 40% — 36% | | |
Product Price Realization (Unhedged) | | | | | | | | |
Oil - Brent | | | | | | 94% — 96% | | |
Oil - Transportation expense | | | | | | $5.00 | | |
NGLs - WTI | | | | | | 40% | | |
Gas - Henry Hub | | | | | | 100% | | |
Gas - Transportation expense | | | | | | $0.15 | | |
Production Costs per BOE | | | | | | | | |
Lease operating expense | | | | | | $9.50 — $10.50 | | |
Steam gas costs(1) | | | | | | $1.25 — $1.75 | | |
Electricity | | | | | | $1.20 — $1.40 | | |
Production and ad valorem taxes(2) | | | | | | $2.00 — $2.25 | | |
Gathering and transportation | | | | | | $1.50 — $2.00 | | |
Depreciation, Depletion and Amortization per BOE | | | | | | $26 — $28 | | |
General and Administrative Expenses (in millions) | | | | | | | | |
Cash | | | | | | $107 — $111 | | |
Stock-based compensation(3) | | | | | | $40 — $46 | | |
Interest Expense | | | | | | | | |
Average revolver balance | | | 30 Day | | | LIBOR + 1.50% | | - 2.50% |
$185 Million Senior Notes | | | | | | 10.000% | | |
$400 Million Senior Notes | | | | | | 7.625% | | |
$750 Million Senior Notes | | | | | | 6.125% | | |
$400 Million Senior Notes | | | | | | 8.625% | | |
$300 Million Senior Notes | | | | | | 7.625% | | |
$600 Million Senior Notes | | | | | | 6.625% | | |
$1,000 Million Senior Notes | | | | | | 6.750% | | |
Effective Tax Rate | | | | | | 38% — 40% | | |
Weighted Average Equivalent Shares Outstanding (in thousands) | | | | | | | | |
Basic | | | | | | 127,600 | | |
Diluted | | | | | | 129,300 | | |
Capital Expenditures (in millions)(4) | | | | | | | | |
PXP | | | | | | $1,366 | | |
Gulf of Mexico - Plains Offshore | | | | | | 234 | | |
| | | | | | | | |
Total | | | | | | $1,600 | | |
| | | | | | | | |
| (1) | Steam gas costs assume a base SoCal Border index price of $3.84 per MMBtu. The purchased volumes are anticipated to be 43,000 - 45,000 MMBtu per day. |
| (2) | Production and ad valorem taxes assume base index prices of $110.00 per barrel and $4.00 per MMBtu. (Note: Brent index price for Oil) |
| (3) | Based on current outstanding and projected awards and current stock price. |
| (4) | Includes capitalized interest and general and administrative expenses. |
Item 9.01 Financial Statements and Exhibits
| | (d) | Exhibit 99.1 Plains Exploration & Production Company press release dated August 2, 2012. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | | | | | |
| | | | | | PLAINS EXPLORATION & PRODUCTION COMPANY |
| | | |
| Date: August 2, 2012 | | | | | | /s/ Nancy I. Williams |
| | | | | | Nancy I. Williams |
| | | | | | Vice President—Accounting, Controller and Chief Accounting Officer |
EXHIBIT INDEX
| Exhibit 99.1 | Plains Exploration & Production Company press release dated August 2, 2012. |
