Plains Exploration & Production to Acquire Oil and Gas Fields in Gulf of Mexico from BP for $5.55 Billion – The Acquisition will Increase PXP’s Daily Production of Oil and Gas by around 60%

Pages: 7 Published: September 01, 2012 Report Code: GDGE0411M&A

  • Overview
  • Contents
  • Tables
  • Figures
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Plains Exploration & Production Company (PXP) agreed to acquire certain deepwater oil and gas fields in the US Gulf of Mexico, from BP Exploration & Production Inc. and BP America Production Company, both subsidiaries of BP p.l.c (BP), for a purchase consideration of $5.55 billion in cash. The transaction will have an effective date of October 1, 2012. PXP will finance the acquisition cost through senior secured revolving and term loan credit facilities provided by J.P. Morgan Securities LLC, J.P. Morgan Chase Bank, N.A., Bank of America, N.A., BMO Capital Markets, Barclays Bank PLC, Citigroup Global Markets Inc., Royal Bank of Canada, The Bank of Nova Scotia, TD Securities, and Wells Fargo Bank, N.A. J.P. Morgan Securities LLC and Barclays Capital Inc. are acting as financial advisors to PXP in the transaction. The acquisition will enable PXP to expand its oil exploration and production asset base in the Gulf of Mexico. The transaction is expected to be completed on November 30, 2012, and is subject to preferential rights, title and environmental due diligence, and other customary closing conditions.

Scope

Rationale behind PXP acquiring stake in deepwater fields in Gulf of Mexico.

Rationale behind BP divesting its stake in the fields.

Geography Covered- US (Gulf of Mexico).

Reasons to Buy

Develop a sound understanding of PXP's acquisition plan of liquid rich assets in the Gulf of Mexico.

To understand BP's divestment plan of non strategic assets.

To know BP's divestment plan to fund the Gulf of Mexico Oil Spill Disposal Program

Table of Contents

1 Table of Contents

1 Table of Contents 1

1.1 List of Tables 1

1.2 List of Figures 1

2 Plains Exploration & Production to Acquire Oil and Gas Fields in Gulf of Mexico from BP for $5.55 Billion 1

2.1 Deal Overview 1

2.2 Deal in Brief 1

2.3 Acquisition of Liquid Rich Assets from BP in Gulf of Mexico to Increase PXP’s Daily Production of Oil and Gas by around 60% 2

2.4 BP Divests its Stake in Non Strategic Assets in Accordance to its Global Strategy 4

2.4 BP Divests its Stake in Non Strategic Assets in Accordance to its Global Strategy 4

2.5 Exploration and Production Companies are Focusing on the Prolific Deepwater Areas of the Gulf of Mexico 5

2.6 Deal Financials and Valuations 6

3 Appendix 7

3.1 Sources 7

3.2 Methodology 8

3.3 Contact Us 9

3.4 Disclaimer 9

List of Tables

List of Tables

Table 1: Oil and Gas Industry, PXP, Major Acquisitions, 2010 to Present 3

Table 2: BP, Major Divestments around the World, 2011–September 2012 4

Table 3: Oil and Gas Industry, Gulf of Mexico, Major Acquisitions, 2011 to Present 5

Table 4: Companies Involved 6

Table 5: Financials of the Deal 6

Table 6: Advisor Information 6

Table 7: Target Information 6

Table 8: Target’s Production and Reserves Information 6

Table 9: Company Valuation Multiples 6

Table 10: Commodity Prices in $, Last Close 6

Table 11: Acquirer Information 7

Table 12: Vendor Information 7

Table 13: Vendor Information 7

List of Figures

List of Figures

Figure 1: PXP, Expected Increase in Production due to Acquisition of Assets in Gulf of Mexico, Mboepd, 2012 2

Figure 2: Gulf of Mexico, Location of Assets to be Acquired by PXP, 2012 3

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