Independent oil and gas company Plains Exploration & Production Company (PXP) commenced an offer of senior notes due in 2020 in an underwritten public offering. The offering is priced at an interest rate of 7 5/8% and the total value of the offering aggregates $300 million. The notes are being sold to the public at par.
The company intends to use the net proceeds of the offering to repay debt under its senior revolving credit facility and general corporate purposes.
The company will pay interest on the notes on April 1 and October 1 of each year. The first interest payment will be made on October 1, 2010, and will consist of interest from closing to that date.
The offering is expected to close on March 29, 2010, subject to the satisfaction of customary closing conditions.
Headquartered in Houston, Texas, Plains Exploration & Production Company is engaged in acquiring, developing, exploring and producing oil and gas.
The company’s core areas of operation include oil and gas properties located in Onshore and Offshore California; the Gulf of Mexico; the Gulf Coast Region, including the Haynesville Shale and South and East Texas; the Mid-Continent Region in Texas and Oklahoma; and the Rocky Mountains, as well as an interest in an exploration prospect offshore Vietnam.
The company has made several strides to bolster its balance sheet, keeping it financially flexible and adequately liquid, while strengthening its operating profile. We believe PXP looks attractive due to its efforts to strengthen the balance sheet and liquidity profile. Additionally, its asset rebalancing has given a good mix of low cost, repeatable oil and gas production for the long-term.
Read the full analyst report on “PXP”
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