September 22, 2010 (FinancialWire) — Plains Exploration & Production Co. (NYSE: PXP) said that it and certain of its subsidiaries have executed an agreement with McMoRan Exploration Co. (NYSE: MMR) to divest PXP's interests in properties located in Gulf of Mexico shallow water for a combination of cash and stock.

Under the deal, PXP will receive $75 million in cash and 51 million shares of McMoRan common stock in exchange for PXP's interests in all of its Gulf of Mexico leasehold located in less than 500 feet of water ($818 million total consideration using McMoRan's stock price of $14.57 on September 17, 2010). According to PXP, the properties are currently producing around 45 million cubic feet of natural gas equivalents per day net to PXP and include estimated proved reserves of around 63.9 billion cubic feet of natural gas equivalents as of June 30, 2010.

In conjunction with the transaction, McMoRan has secured $900 million of committed financing from an investor group and PXP will have the right to designate two directors to McMoRan's board of directors.

Separately, PXP has begun the process of marketing the company's Gulf of Mexico deepwater assets.

Texas-based 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, Louisiana and the Gulf of Mexico.

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