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Press release from PR Newswire

PXP Provides an Update on Deepwater Asset Separation Process

Thursday, March 24, 2011

PXP Provides an Update on Deepwater Asset Separation Process08:24 EDT Thursday, March 24, 2011HOUSTON, March 24, 2011 /PRNewswire/ -- Plains Exploration & Production Company (NYSE: PXP) ("PXP") announces today it continues to evaluate alternatives to separate its deepwater and onshore businesses, which include separately capitalizing its deepwater business through a joint venture or outside capital and then either spinning-off or divesting these assets.James C. Flores, Chairman, President and CEO of PXP commented, "The planned separation of our Gulf of Mexico and onshore businesses is aimed at optimizing the value of PXP's assets, both onshore and offshore. However, to-date, the deepwater separation process reflects a discounted value due to the current regulatory uncertainties, permit delays, and reduced activity for Gulf of Mexico exploration and development, rather than the underlying long-term value of this oil-weighted asset, especially in this strong energy commodity market. "We believe it prudent to allow time for the regulatory uncertainties to abate and to complete the Lucius well test operations before proceeding. Our Lucius operator, Anadarko Petroleum Corporation (NYSE: APC), recently received approval to conduct well test operations beginning late March 2011. The flow test is a key milestone to possible project sanctioning in 2011, which results in significant discovered resources becoming proved reserves. Prior to separation, potential additional drilling could occur on the current leasehold on 50,000 acres covering 10 OCS blocks to further de-risk the Lucius-Phobos complex."PXP anticipates capital exposure for these properties in 2011 of approximately $50-$60 million net to PXP with the easing of Gulf of Mexico activity curtailments.PXP is an independent oil and gas company primarily engaged in the activities of acquiring, developing, exploring and producing oil and gas in California, Texas and Louisiana. PXP is headquartered in Houston, Texas.ADDITIONAL INFORMATION & FORWARD-LOOKING STATEMENTSThis press release contains forward-looking information regarding PXP that is intended to be covered by the safe harbor "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. All statements included in this press release that address activities, events or developments that PXP expects, believes or anticipates will or may occur in the future are forward-looking statement. These include statements regarding:* completion and results of the well test operations,* value and completion of the separation of our deepwater assets,*reserve and production estimates,* oil and gas prices,* cash flow estimates,* future financial performance,* capital and credit market conditions,* planned capital expenditures, and* other matters that are discussed in PXP's filings with the SEC.These statements are based on our current expectations and projections about future events and involve known and unknown risks, uncertainties, and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. Please refer to our filings with the SEC, including our Form 10-K, for a discussion of these risks.All forward-looking statements in this press release are made as of the date hereof, and you should not place undue reliance on these statements without also considering the risks and uncertainties associated with these statements and our business that are discussed in this press release and our other filings with the SEC. Moreover, although we believe the expectations reflected in the forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material. Except as required by law, we do not intend to update these forward-looking statements and information.SOURCE Plains Exploration & Production CompanyFor further information: Investors, Hance Myers, +1-713-579-6291, hmyers@pxp.com, or Media, Scott Winters, +1-713-579-6190, swinters@pxp.com, both of Plains Exploration & Production Company