Each one in plain English, with the numbers worked through for a shareholder.
25 Sept 2008material agreement● NeutralMajor
On September 24, 2008 PXP agreed to sell OXY its remaining 50% working interests in the Permian and Piceance Basins for $1.25 billion cash, effective December 1, 2008, subject to closing conditions including antitrust clearance. OXY also agrees to end its right of first refusal on the Los Angeles Basin fields (Packard, San Vicente, Inglewood, Las Cienegas, Montebello). This is the second half of the 50% sale to OXY that closed in February 2008. The press release states the sale will cut corporate debt by at least $1 billion and that the properties produced about 13,000 BOE per day net to PXP with about 92 million BOE of proved reserves at December 31, 2007.
On July 23, 2008 PXP signed Amendment No. 3 to its credit agreement, raising lender commitments by $400 million to $2.7 billion and the borrowing base to $3.1 billion, subject to redetermination. Other terms are substantially unchanged. This increases borrowing capacity following the Haynesville purchase. The filing gives no explanation for the step beyond the amounts. The earlier $2.3 billion figure was the accordion exercise and this is a further amendment.
8 July 2008asset acquisition disposition● NeutralMajor
PXP closed the Haynesville deal with Chesapeake on July 7, 2008, paying $1.375 billion of the $1.65 billion price from its credit facility. The remainder is due by October 30, 2008, subject to adjustments. The Participation Agreement is now signed, committing PXP to fund 50% of Chesapeake's drilling and completion costs on future wells, up to another $1.65 billion, with an option on 20% of additional leasehold in a defined area. This resolves the acquisition itself, while the drilling funding and remaining payment stay open. The filing also includes an updated and corrected investor presentation.
PXP agreed on July 1, 2008 to buy a 20% interest in Chesapeake's Haynesville Shale leasehold (about 110,000 net acres, no material proved reserves) for about $1.65 billion cash, to close July 7 and be funded by its credit facility. It also agreed to fund 50% of Chesapeake's drilling and completion costs on future wells over several years, up to another $1.65 billion. To help pay, PXP will exercise the $400 million accordion, taking commitments from $1.9 billion to $2.3 billion. This is a major new gas-shale commitment, partly using the cash raised from the earlier sales.
PXP sold $400 million of 7 5/8% Senior Notes due 2018, completed May 23, 2008, with net proceeds of about $394.2 million used to repay revolver borrowings. The filing says those borrowings had been used to settle derivative positions, buy properties and for other purposes including the stock repurchase program. This adds fixed-rate debt and reduces revolver debt.
PXP closed the South Texas purchase from Samson Lone Star and PYR Energy on April 17, 2008, covering 28,024 net acres. It paid $288 million in cash after third-party preferential rights and closing adjustments, below the $335 million announced on March 3 for 34,509 net acres. It was funded mainly with proceeds from the recent divestments through a like-kind exchange. Historical and pro forma financials, if required, will follow by amendment.
3 Mar 2008asset acquisition disposition● NeutralMajor
PXP closed the OXY sale on February 29, 2008, selling 50% of its Permian Basin and 50% of its Piceance Basin working interests and receiving about $1.53 billion in cash after adjustments (versus $1.55 billion in the December agreement). PXP keeps the other 50% of each and stays operator in the Piceance; OXY operates the Permian assets. The pro forma figures say the 2008 sales (OXY and XTO) raised $1.71 billion net of $21 million of fees, with $300 million put in escrow for a possible tax-deferred exchange and the rest used to repay the revolver. The same filing announces an agreement to buy South Texas producing properties (34,509 net acres) from a private company for $335 million, mostly funded by sale proceeds via a like-kind exchange, and raises 2008 sales volume guidance to 92,000-96,000 BOE per day. This resolves the OXY sale thread; the credit commitments and borrowing base now step down to $1.9 billion and $2.5 billion, which also opens the $1.0 billion buyback.
20 Feb 2008asset acquisition disposition● NeutralMajor
PXP closed the XTO sale of its San Juan Basin and Barnett Shale interests on February 15, 2008 for about $200 million cash, compared with $180 million in the December agreement. It will buy XTO's 50% interest in the Big Mac prospect for $20 million to hold 100%, expected to close before the end of Q1 2008. The credit facility was amended on February 13: once the XTO and OXY sales close, commitments fall by $1.0 billion to $1.9 billion and the borrowing base falls by $400 million to $2.5 billion, and PXP may buy back up to $1.0 billion of its stock. The OXY sale is not reported as closed. The board's compensation committee also raised base salaries (Flores to $1,200,000; Bourgeois, Talbert and Wombwell to $650,000, from March 1, 2008) and set 2007 bonuses equal to those amounts.
On December 14, 2007 (announced December 17) PXP signed two sale agreements. One is with a subsidiary of Occidental Petroleum (OXY) to sell 50% of its Permian Basin and 50% of its Piceance Basin working interests for $1.55 billion cash; OXY will operate the Permian assets and PXP will stay operator in the Piceance. The other is with XTO Energy to sell its San Juan Basin (New Mexico) and Barnett Shale (Texas) interests for $180 million cash plus XTO's 50% working interest in the Big Mac prospect. PXP also granted OXY a right of first refusal on certain Los Angeles Basin fields. The press release, per the filing, announces $1.75 billion of divestitures, a $1.0 billion share repurchase authorization, a 2008 capital budget and 2008 guidance, but the figures are not in the excerpt. Both sales are subject to closing conditions. The Piceance stake is part of the Laramie purchase in May 2007.
26 Nov 2007security holder rights change● NeutralMajor
Pogo's subsidiary, now owned by PXP, closed its tender offers and consent solicitations for its three series of senior subordinated notes (7.875% due 2013, 6.625% due 2015, 6.875% due 2017). It paid about $1,291.2 million to noteholders plus about $10.4 million of accrued interest, and amended each indenture to remove many of its protective covenants. After the final 6.625% notes were tendered, the 6.625% indenture no longer applies to Pogo. This is a follow-on to the Pogo acquisition, handling the debt Pogo brought with it, similar to the November 2006 tender of PXP's own 8.75% notes.
6 Nov 2007asset acquisition disposition● NeutralMajor
PXP completed the Pogo acquisition on November 6, 2007, after both companies' shareholders approved it at meetings that day. The price was about $3.4 billion: $1,461,540,030.26 in cash (funded by bank borrowings) and 40,063,702 PXP shares, which is lower than the roughly $3.6 billion first announced. PXP also replaced its credit facility with one of $2.9 billion commitments (expandable to $3.3 billion) and a $2.9 billion borrowing base, falling to $2.6 billion on the earliest of the first anniversary of the Pogo closing, a new permitted senior note issue, or certain asset sales plus equity issuance totalling $300 million or more. The facility matures November 6, 2012. The board grew from 7 to 9 with two former Pogo directors, Thomas A. Fry III and Charles G. Groat. The press release says total shares outstanding are about 113 million, and the authorized-share increase was approved. This resolves the Pogo merger thread.
PXP filed Amendment No. 2 to the Pogo merger registration statement. The terms are unchanged: each Pogo share gets 0.68201 PXP shares plus $24.88 cash, with PXP and Pogo holders expected to own 66% and 34% of the combined company. The record date remains September 25, 2007 and the meeting dates and places are still blank, so both votes are still pending, including the vote to raise authorized PXP shares from 150 million to 250 million.
PXP filed Amendment No. 1 to the Pogo merger registration statement; the excerpt shows the same terms as before. It sets a record date of September 25, 2007 for voting at both companies' special meetings, though meeting dates are still blank. No new deal terms are visible in the text provided.
PXP filed the registration statement and joint proxy for the Pogo merger, registering up to 40,944,754 PXP shares. It also asks PXP holders to vote to raise authorized common shares from 150 million to 250 million if the merger occurs. The meeting dates were left blank, so shareholder votes are still pending. This advances the Pogo deal and revises the earlier proposed 200 million authorized share figure.
PXP agreed on July 17, 2007 to acquire Pogo Producing in a deal valued at about $3.6 billion: each Pogo share gets 0.68201 PXP shares plus $24.88 cash (about 40 million PXP shares and $1.5 billion cash in total). PXP holders are expected to own about 66% of the combined company. It needs approval from both companies' shareholders, is expected to close in Q4 2007, and PXP also said it hired Lehman Brothers to evaluate a possible MLP filing. This is a large new deal after the Laramie purchase, and the earlier Stone Energy deal is not mentioned.
PXP sold $600 million of 7 3/4% Senior Notes due 2015, completed June 19, 2007, with net proceeds of about $593 million to repay revolver borrowings used for the Laramie purchase and general purposes. This swaps bank debt for longer-term fixed-rate debt, following the March 2007 $500 million notes.
1 June 2007asset acquisition disposition▲ GoodMajor
PXP closed the Laramie Energy Piceance Basin (Colorado) purchase on May 31, 2007, paying $900 million cash, issuing 1 million shares and paying about $58 million of closing adjustments, funded mainly by bank borrowings. The same day it restated its credit facility, raising commitments to $1.3 billion (expandable to $1.55 billion) with a $1.3 billion borrowing base that drops to $1.15 billion on the first anniversary of the Laramie closing or when PXP issues additional permitted senior notes, whichever is earlier. This completes the pending deal from the prior context. The press release says Piceance output is about 36 MMcf/d, scheduled to rise above 70 MMcf/d in Q4.
PXP agreed on April 18, 2007 to buy Laramie Energy's Piceance Basin (Colorado) gas properties and a 25% interest in the Collbran Valley Gathering System for $900 million cash plus one million PXP shares (about $946 million total), with closing expected in late May 2007. Separately, on April 23 it replaced its credit facility with a new $1.0 billion revolver (expandable to $1.15 billion) maturing April 23, 2012. This is a new Rocky Mountain asset, following the Gulf Coast and California sales and in place of the Stone Energy deal, which this filing does not mention. The CFO in the presentation is now Winston M. Talbert.
PXP sold $500 million of 7% senior notes due March 15, 2017 to the public at par, closing March 13, 2007, with net proceeds of about $492 million. The money is to repay revolving credit borrowings (which funded, among other things, its stock repurchases) and for general corporate purposes. This is new long-term debt replacing bank borrowings.
7 Nov 2006asset acquisition disposition▲ GoodMajor
Original report of the same events: the Statoil sale of Big Foot, Caesar and Big Foot North closed Nov 1, 2006 for about $706 million cash (the agreed $700M, now with adjustments). PXP redeemed its $250M 7.125% senior notes on Nov 3 (about $269M plus $6.8M interest), and the 8.75% subordinated notes tender drew about 99.95% of the notes, with the covenant-removing supplemental indenture becoming operative Nov 3. The pro forma exhibit also mentions that the 2007-2008 oil collars were settled by payments on Oct 31 and Nov 2, 2006, and that the credit facilities were paid down on Sept 29, 2006 (the text is cut off after that).
7 Nov 2006asset acquisition disposition▲ GoodMajor
This amendment to the November 2006 report re-files the same news with revised pro forma financial information (Exhibit 99.2). The news: PXP sold its Big Foot, Caesar and Big Foot North deepwater interests to a Statoil subsidiary on Nov 1, 2006 for about $706 million cash, resolving the September agreement. On Nov 3 it redeemed its $250M 7.125% senior notes (about $269M plus $6.8M accrued interest), and about $274.9M (99.95%) of the 8.75% subordinated notes were tendered (about $292M plus $8.2M interest), so the stripped-down covenants took effect. The pro forma figures were truncated, so their changes are not shown.
On October 20, 2006 PXP signed a supplemental indenture removing most protective covenants and several default events from the 8.75% senior subordinated notes due 2012. This follows the tender offer launched in October: holders of about $274.8 million (99.93%) of the notes tendered by the consent deadline and will receive $1,062.07 per $1,000 (including a $20 consent payment), with payment expected November 3, 2006. The tender is conditioned on PXP completing the redemption of its 7.125% senior notes, and the amendments become operative once tendered notes are accepted for payment.
4 Oct 2006asset acquisition disposition● NeutralMajor
The $865 million sale of non-strategic onshore California and West Texas properties to Occidental closed on September 29, 2006, resolving the August agreement. PXP also amended its credit agreement (second amendment, Sept 28) to permit redeeming its 7.125% senior notes and tendering for its 8.75% subordinated notes, and cut its borrowing base from $1.2 billion to $1.0 billion until the next redetermination on November 1, 2006 (commitments stay at $750 million). It called the $250 million senior notes for redemption on November 3, 2006 at roughly $270 million (about $20 million premium, based on the Sept 29 treasury rate) and launched a tender offer and consent solicitation for the $275 million subordinated notes. Fourth-quarter guidance shows production of 54-60 MBOE/d, and 2006 capital spending was raised from $526 million to $610 million, mainly for deepwater Gulf of Mexico. The filing does not mention the Stone merger.
On September 15, 2006 PXP agreed to sell its working interests in the Bigfoot and Caesar deepwater Gulf of Mexico discoveries and the Bigfoot North prospect (four blocks) to Statoil Gulf of Mexico LLC for $700 million in cash, with closing expected in early November 2006. PXP also gave Statoil a right of first negotiation on certain other deepwater leases. The press release says proceeds will complete the remaining $400 million of the authorized stock purchase program and go to debt reduction, and that PXP keeps 15 deepwater prospects, including Norman and Friesian which are currently drilling. The sale is subject to post-closing adjustments and preferential rights.
PXP signed a deal on August 6, 2006 to sell its non-strategic oil and gas properties, mainly in California and Texas, to Occidental Petroleum subsidiaries for $865 million in cash, effective October 1, 2006. The press release lists the Asphalto, Buena Vista and Mt. Poso fields in the San Joaquin Valley, Sansinena in the LA Basin, Pakenham in West Texas and minor properties, producing about 7,200 BOE/d with about 45 million equivalent barrels of proved reserves at Dec 31, 2005. Closing is expected on or before September 30, 2006 and depends on conditions including antitrust clearance and lien releases. Management says it intends to use the proceeds for debt reduction and continued share repurchases. The filing does not mention the pending Stone Energy merger.
PXP filed the registration statement (Form S-4) for up to 34,514,861 new shares to be issued to Stone holders in the merger, continuing the April 2006 deal. The draft says the deal is now estimated at $1.8 billion including $563 million of assumed debt, at a PXP price of $34.47 on May 16, 2006. PXP holders would vote on the share issuance, on raising authorized shares from 150 million to 200 million, and on raising the 2004 Stock Incentive Plan from 5 million to 12 million shares. The meeting dates are blank and the document is not yet effective.
PXP signed a deal on April 23, 2006 to buy Stone Energy in an all-stock merger valued at about $1.46 billion: Stone holders get 1.25 PXP shares per Stone share (about 34.5 million new PXP shares) and PXP assumes $483 million of net debt. Closing is expected in Q3 2006 and needs approval from both companies' stockholders; after closing PXP holders would own about 70% of the combined company. PXP also said it arranged to eliminate its 2007 and 2008 oil collars at a pre-tax cost of about $600 million, assuming payment in Q2 2006, continuing the 2005 hedge removal. It also bought $55 puts for 2008 on 32,000 barrels per day.
PXP's subsidiaries signed three consulting agreements with Cook Hill Properties LLC (headed by former ARCO chairman Lodwrick Cook) to help win development approvals for the surface land of its Montebello, Lompoc and Arroyo Grande oilfields. Cook Hill would earn 15% of net profits from a sale of each property (less $10M, $5M and $2.5M respectively), rising to 20% (less $15M, $7.5M, $3.75M) if proceeds exceed $450M, $225M and $112.5M; no fee if approval is not achieved before January 1, 2013. The same filing's press release estimates Q4 2005 at a $6.9 million pre-tax derivative charge (with $90.7 million of cash settlements), a $4.2 million pre-tax credit on stock appreciation rights, and production of about 62.9 thousand barrels of oil equivalent per day. It also shows 2006 oil protection as $55 put options on 50,000 barrels per day, with premiums of about $7.5 million per month.
PXP amended its $750 million credit facility with JPMorgan Chase: it changed the restricted payments covenant and replaced the minimum tangible net worth covenant with a debt-to-EBITDAX covenant. After the scheduled review, the borrowing base rose from $750 million to $1.2 billion. This continues the May 2005 credit facility thread; the filing does not say whether any more will be drawn.
