Each one in plain English, with the numbers worked through for a shareholder.
1 June 2005asset acquisition disposition● NeutralMajor
The $350 million sale of about 275 net active wells to XTO Energy closed May 31, 2005, with PXP receiving $335.5 million in net proceeds after sale costs and closing adjustments. This resolves the XTO sale thread. Separately, PXP paid about $293 million on May 31, 2005 to eliminate all its existing oil price swaps and collars ($147 million for swaps, $146 million for collars). Pro forma results in the filing show the sale reducing March 2005 quarter revenue by $20.0 million; the filing does not say how the proceeds will be used.
On May 16, 2005 PXP amended and restated its credit agreement with JPMorgan Chase Bank as agent, raising its revolving credit facility from $500 million to $750 million with a $750 million borrowing base and extending maturity to May 16, 2010. Borrowings are secured by pledged subsidiary shares and mortgages on at least 80% of the present value of domestic oil and gas properties. The filing says PXP was in compliance with covenants at March 31, 2005 and could have borrowed the full amount then available.
This amendment files pro forma 2004 results for the Nuevo merger and shows what happened after closing: Nuevo's $150 million 9 3/8% notes were repurchased June 29, 2004 (tender cost $169.1 million), its $115 million TECONs redeemed for $117.0 million, and the Congo operations sale closed July 30, 2004. This resolves the Congo sale thread and the earlier assumed-debt items. Pro forma income from continuing operations was $1.1 million after $22.7 million of debt-extinguishment losses.
PXP agreed on April 1, 2005 to sell 275 net active wells to XTO Energy, Inc. for $350 million. The properties had about 27 million barrels of equivalent proved reserves at year-end 2004 (81% developed) and produce about 5,800 barrels per day; closing is expected in the second quarter, subject to customary conditions. Updated guidance puts 2005 production at 68,000-72,000 BOE per day and 2006 at 76,000-80,000, reflecting this sale and the Bentley-Simonson purchase. The filing does not say how proceeds will be used.
PXP agreed (effective March 14, 2005) to buy oil and gas properties from Bentley-Simonson, Inc. for $119 million in cash, mainly in the onshore Los Angeles Basin with some in adjacent Ventura County. The same filing gives 2005 guidance: production of 72,000-80,000 BOE per day for the year, with operational capital spending of about $350 million (excluding acquisitions) and basic shares of 77,000 thousand. Closing is not yet confirmed.
The compensation committee set 2004 cash bonuses to be paid in late February 2005: $800,000 for CEO James Flores and $400,000 each for Thorington, Wombwell and Gladney. The filing says the bonuses are discretionary and based on financial, operational and individual performance measures.
The board set up an arrangement, effective December 31, 2004, letting non-employee directors defer their restricted stock awards and receive restricted stock units instead, paid out in PXP shares when they leave the board. The filing gives no dollar amounts; it is a director pay-mechanics change.
PXP signed an agreement to sell 11 offshore California platforms and three related onshore facilities to Dos Cuadras Offshore Resources, LLC for $112.5 million, and said it is also selling essentially all its South Texas and New Mexico assets for about $40 million. Both sets of sales are expected to close by the end of 2004; the California sale needs regulatory approvals. This follows through on the earlier thread of possible non-core asset sales. PXP says the properties are about 11% of production but about 20% of cash production expenses, and it expects the sales to cut unit operating costs by about $0.85 per barrel (company expectation).
PXP filed to swap $250 million of 7 1/8% senior notes due 2014, sold privately on June 30, 2004, for freely tradable notes with substantially identical terms. PXP receives no proceeds, and Nuevo-related subsidiaries and Plains E&P Company are listed as guarantors. This is a routine follow-up to the June 2004 note sale; the part of the filing shown does not say how the proceeds were used.
14 June 2004asset acquisition disposition● NeutralMajor
PXP filed the pro forma combined financials for the Nuevo merger. It assumed $256 million of net debt and $115 million of TECONs (the convertible securities), versus $234 million of net debt estimated at signing. Pro forma March 31, 2004 total assets were about $2.8 billion, with long-term debt of about $840 million. The filing also notes Nuevo's April 8, 2004 agreement to sell its Congo operations, and that PXP expects about $20 million of annual cost savings from the merger (a company expectation, not in the pro forma figures).
28 May 2004asset acquisition disposition● NeutralMajor
PXP completed its acquisition of Nuevo Energy on May 14, 2004, resolving the pending deal announced in February. About 36.5 million new PXP shares were issued, giving Nuevo holders about 48% of the company, and PXP had 77.0 million shares outstanding after closing. Nuevo had 208 MMBOE of proved reserves at year-end 2003, mostly California and West Texas. Financial statements and pro forma figures were still to come.
PXP amended the Nuevo merger registration statement. It sets both shareholder meetings for May 14, 2004 (record date April 12) and updates the deal value to about $1.0 billion at PXP's $18.64 close on March 31. The exchange ratio (1.765) and the 48%/52% ownership split are unchanged, and registered shares rise slightly to 42,344,572.
PXP filed the registration statement and joint proxy for the Nuevo merger. Nuevo holders get 1.765 PXP shares per share, valued at about $995 million at PXP's $17.26 close on March 9, 2004. Nuevo holders would own about 48% and PXP holders about 52% of the combined company. Registers up to 42,261,109 PXP shares. PXP holders must also vote on raising authorized shares from 100 million to 150 million, a 2004 Stock Incentive Plan, five directors and the auditor.
PXP announced a definitive agreement on February 12, 2004 to buy Nuevo Energy Company in an all-stock deal valued at about $945 million (based on the Feb 11 close). Nuevo holders would get 1.765 PXP shares per share (up to 37.4 million new PXP shares), and PXP would assume $234 million of net debt and $115 million of convertible preferred securities, with closing expected in the second quarter of 2004. The same filing gives 2004 guidance excluding Nuevo: production of 13,400-14,500 MBOE, capital spending of $163-177 million and about 40.2 million basic shares, and says PXP may sell Illinois assets effective February 1, 2004 and other non-core assets. This is a second large acquisition following the 3TEC deal, and it would substantially increase the share count.
PXP filed a registration statement to swap $75 million of the 8.75% senior subordinated notes due 2012 sold privately on May 30, 2003 (which helped fund the 3TEC deal) for identical notes that can be freely traded. PXP receives no proceeds and the terms are substantially identical, so this is a routine follow-up to the 3TEC financing and does not change the company's debt.
19 June 2003asset acquisition disposition▲ GoodMajor
PXP completed its acquisition of 3TEC on June 4, 2003, so the pending merger is done and 3TEC is now a PXP subsidiary. Each 3TEC share became 0.85 of a PXP share plus $8.50 cash; PXP paid about $152.4 million in cash to common holders, issued 16.1 million shares (40.3 million outstanding after closing), and paid another $113.1 million to retire 3TEC debt, warrants and preferred stock. It was funded by a $75 million add-on of 8.75% senior subordinated notes due 2012 (issued May 30, 2003) and borrowings on the $500.0 million JPMorgan credit facility ($240 million drawn at closing, borrowing base $402.5 million). The deal adds 3TEC's East Texas and Gulf Coast gas-weighted properties (49 MMBOE proved reserves at end of 2002).
PXP filed an 8-K only to update the pro forma financial statements for the pending 3TEC merger that were in its May 1, 2003 merger filing. The update says a three-year, $500.0 million credit facility with JPMorgan Chase (initial borrowing base $425.0 million) has been arranged and will fund when the merger closes, which resolves the earlier open question about how the cash portion would be funded. Pro forma figures show about 39.9 million basic shares after the merger (15.9 million issued) and $295.1 million of acquisition debt; the merger itself still awaits the June 3 votes.
PXP filed Amendment No. 2 to the merger filing, moving both shareholder meetings to June 3, 2003 (from May 7) and setting the mailing to on or about May 5, 2003. With PXP stock at $8.27 on April 16, 2003, the estimated deal value fell again, to about $306.0 million, or $15.53 per 3TEC share ($8.50 cash plus $7.03 in PXP stock). The 3TEC credit facility balance PXP would assume rose to $106.0 million at March 31, 2003. The merger still awaits both shareholder votes.
PXP amended its merger filing (Amendment No. 1) and set both shareholder meetings for May 7, 2003, with a record date of April 4, 2003. With PXP stock at $8.68 on March 25, 2003, the estimated deal value fell to about $312 million, or $15.88 per 3TEC share ($8.50 cash plus $7.38 in PXP stock), against $16.51 in the earlier filing. PXP would still assume the 3TEC credit facility balance, now $99.0 million at February 28, 2003. The director slate grew from four nominees to five.
PXP filed the registration statement and draft joint proxy for the 3TEC merger, registering up to 15,977,234 PXP shares to be issued to 3TEC holders. Based on PXP's $9.42 close on February 11, 2003, the consideration is estimated at $16.51 per 3TEC share ($8.50 cash plus $8.01 in PXP stock), about $324 million in total, and PXP would also assume the $99.0 million 3TEC credit facility balance. Both companies' shareholders must still vote, and PXP holders are also being asked to vote on a 2002 Stock Incentive Plan, four director elections and the auditor. The meeting dates and record dates are blank in this draft.
Plains Exploration & Production (PXP) agreed on February 2, 2003 to acquire 3TEC Energy Corporation in a deal valued at about $432 million. 3TEC holders would get $8.50 in cash and 0.85 PXP shares per 3TEC share (adjusted if PXP's price falls below $7.65 or rises above $12.35), with the cash to be funded through a new credit facility. After closing, 3TEC holders would own about 40% of the combined company and PXP holders about 60% (subject to the price adjustments), and the deal still needs approval from both companies' stockholders.
