Plains Exploration & Production Company
) provided its preliminary third-quarter 2012 production
projections. The company expects preliminary daily sales volumes in
the third quarter of 2012 to average approximately 105 thousand
barrel of oil equivalent per day ("MBoe/d"). This will represent
roughly 60% of its total quarterly sales volumes.
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Plains Exploration & Production expects its third-quarter 2012
production numbers to be benefited owing to few of its Gulf of
Mexico ("GoM") properties acquisitions from
). These assets have already exhibited their production-potentials
with generation of 59,500 barrels of oil equivalent net per day at
the end of July 2012.
In addition, the company expects its forthcoming
production-increase to come up from Eagle Ford shale.
2Q12 Production Recap
Daily sales volumes of Plains Exploration & Production inched
up 0.6% year over year to 98,336 barrels of oil equivalent per day
("Boe/d") in the second quarter of 2012. Average daily oil and
liquids sales volume increased 23.2% year over year to 59,780
barrels per day in the reported quarter.
During second-quarter 2012 earnings call, Plains Exploration &
Production forecasted sales volume in the range of 95 - 97 MBoe/d
for 2012. Last month, the company entered into two significant
agreements, totaling $6.11 billion, with BP plc and
Royal Dutch Shell plc
) to acquire some of their oilfields in the GoM. These assets have
strong production profile along with solid proven reserves and we
believe that these acquisitions will help the company meet its
annual projected volume.
We appreciate Plains Exploration & Production's strong balance
sheet and liquidity position, liquid-rich profile, higher realized
oil prices, strong asset rebalancing strategy, and development of
onshore assets in California along with the Eagle Ford Shale, which
offer ample upside potential over the long term.
However, we are skeptical about uncertainty related to drilling
results and regulatory restrictions, and volatile commodity prices.
Plains Exploration & Production Company currently retains a
short-term Zacks #3 Rank (Hold Rating).
Houston, Texas-based Plains Exploration & Production engages in
the acquisition, development, exploration, and production of oil
and gas properties, primarily in the United States.