Standard & Poor’s Equity Research oil and gas analyst Michael Kay is keeping his Buy recommendation on shares of Plains Exploration & Production Co., Houston, (NYSE: PXP) and cutting the target price per share by $9 to $32.

Kay says Plains has lowered its 2008 capex budget from $1.5 billion to $1.2 billion and sets its 2009 spending at $1.15 billion.

In the third quarter, Plains Oil and gas sales averaged 92,400 barrels of oil equivalent per day, compared with 57,100 in third-quarter 2007. The company reports its third-quarter net income increased to $493.1 million from $32.9 million in the third quarter 2007.

Kay says he has raised his 2008 earnings-per-share estimate by $2.48 to $8.43 on third-quarter results, but on lower prices, cut the 2009 estimate by $2.14 to $2.79.—JAS