Plains Exploration & Production Co. (PXP) said Thursday its second quarter profit declined from last year, hurt by special items and lower realized sales price, partially offset by lower production costs. In addition, the company said it will offer 15 million shares of its common stock in a public offering. The company raised its capital budget for fiscal 2009 and reaffirmed its sales volumes outlook for fiscal 2009 and fiscal 2010.
Net income for the second quarter was $43.6 million or $0.37 per share, compared to $202.9 million or $1.84 per share in the prior year quarter.
The result for the quarter included unrealized gains and losses on mark-to-market derivative contracts, an $87.3 million pre-tax legal settlement recovery, and a beneficial income tax effect from a change in the balance of unrecognized tax benefits.
Adjusted net income was $171 million, down from $217.7 million a year ago. Adjusted earnings were $1.44 per share for the quarter.
On average, 12 analysts polled by Thomson Reuters expected the company to earn $0.32 per share for the second quarter. Analysts' estimates typically exclude one-time items.
Second quarter revenues plunged to $278.7 million from $732.7 million in the same quarter last year. Four analysts had a consensus revenue estimate of $326.28 million for the second quarter.
Daily sales volumes for the second quarter fell to 80.6 thousand BOE from 87.5 thousand BOE in the year-ago quarter, due to the impact of the 2008 divestments. Excluding divestments, sales volumes grew by 9%, due to higher production from the company's Flatrock and Haynesville Shale properties.
The average realized sales price before derivatives was $49.44 per barrel of oil, down from $108.74 per barrel of oil in the second quarter 2008.
Cash margin, a non-GAAP measure, fell to $57.16 per BOE from $68.05 per BOE in the second quarter 2008.
Total production costs decreased 30% to $14.43 per barrel of oil equivalent or BOE for the second quarter 2009.
In a separate development, Plains Exploration & Production said that it will offer 15 million shares of its common stock. The company will grant the underwriters a 30-day option to purchase up to 2.25 million additional shares of common stock from PXP.
The company expects to use net proceeds from the offering for general corporate purposes, including to fund a portion of the payment of the remaining drilling carry under our agreement with Chesapeake Energy Corp. covering Haynesville acreage.
For the first-half of 2009, the company posted net income of $48.8 million or $0.43 per share, compared to $366.4 million or $3.27 per share in the previous year period.
Adjusted net income slipped to $304.8 million from $364.7 million in the prior year period.
Revenues for the year-to-date period dropped to $507.2 million from $1.4 billion in the year-ago period.
For 2009, PXP raised its capital budget to $1.4 billion from $1.05 billion to reflect anticipated additional Haynesville Shale wells and additional acreage purchases. For 2010, PXP is targeting a capital budget of about $1.0 billion of which 45% is uncommitted capital.
In addition, PXP reaffirmed its 2009 and 2010 sales volumes to be in the range of 78,000 to 82,000 BOE, and 86,000 to 90,000 BOE, respectively.
PXP is currently trading at $25.18, down $3.55 or 12.36% on a volume of 5.25 million shares.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.