2010-11-16-2010-10-05-2010-11-16

Bought approximately 60,000 net acres in the S TX Eagle Ford oil and gas condensate windows in Karnes County, gaining 2,000 BOE/d, up to 175 MMBOE 3P.

Plains Exploration & Production Co., Houston, (NYSE: PXP) has closed its acquisition of interests in approximately 60,000 net acres in the Eagle Ford oil and gas condensate windows in South Texas from privately held Dan A. Hughes Co. LP, Beeville, Texas, for $578 million in cash.

The Eagle Ford properties are primarily in Karnes County and have projected net production capability of approximately 2,000 barrels of oil equivalent per day and a year-end 2011 production-target-exit rate of approximately 5,000 barrels equivalent per day net. The net resource potential is approximately 140- to 175 million barrels equivalent.

Of the 60,000 net acres, approximately 20,400 net acres are in a joint-operating area between Plains and EOG Resources Inc., Houston (NYSE: EOG).

Plains chairman, president and chief executive James C. Flores says, "We are pleased to announce this significant acquisition which enables us to aggressively expand our large, high-margin onshore oil business. The Eagle Ford transaction adds a high-quality oil asset with substantial reserve and oil production growth opportunities to Plains' existing domestic oil-resource position."

The effective date is Sept. 1. J.P. Morgan was financial advisor to Plains. Porter & Hedges LLP was legal advisor to Dan A. Hughes.

Wells Fargo senior analyst David Tameron has valued the deal at approximately $9,633 per acre.

"EOG's Karnes County acreage, a portion of which we presume was sold, looks to be located primarily in the oil window of the play," says Tameron.