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Plains Previews 2Q Results

Zacks Equity Research

Oil and gas major, Plains Exploration & Production Co. (PXP) revealed preliminary second quarter 2012 results. The company is scheduled to release its earnings before the bell on August 2, 2012.

The daily sales volume during the second quarter 2012 averaged 98,000 barrels of oil equivalent (“Boe”) per day, 11% higher than 87,873 Boe per day reported in the preceding quarter. The sales volume remained almost flat with 97,700 Boe per day recorded in the year-ago quarter. 61% of the sales volume in the second quarter came from oil and liquid sales while natural gas contributed the remaining 39%.

Average realized crude oil, before derivative transactions, on a per Boe basis, was $99.29 in the second quarter 2012, up 9.8% from $90.42 per barrel in the year-ago quarter. However, natural gas realized prices, before derivative transactions, continued to slide to $2.18 per thousand cubic feet (Mcf) from $4.23 per Mcf in the year-ago quarter.

Total revenue in the second quarter is expected to supersede the year-ago figure, despite the flattish sales volume.  We believe revenue will be boosted by higher liquid volume in the sales mix and better realized price of liquids sold.

The Zacks Consensus earnings per share estimates for the second quarter and fiscal 2012 are presently pegged at 67 cents and $2.81, respectively.

1Q12 Recap

The company reported earnings of 58 cents per share in the first quarter 2012, higher than the prior-year figure of 37 cents per share. However, earnings were a penny lower than the Zacks Consensus Estimate.

Plains Exploration & Production’s first quarter 2012 revenue increased 21.8% year over year to $524.3 million from $430.3 million in the year-ago quarter. The quarterly revenue missed the Zacks Consensus Estimate of $547 million.

Plains Exploration & Production retains a short-term Zacks #3 Rank which translates into a Hold rating. The Zacks #3 Rank is also shared by the company’s peer, Newfield Exploration Co. (NFX).

Based in Houston, Texas, Plains Exploration & Production engages in the acquisition, development, exploration, and production of oil and gas properties primarily in the United States.

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