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PXP Chairman's Letter To Shareholders

HOUSTON, May 13, 2013 /PRNewswire/ -- Plains Exploration & Production Company (NYSE:PXP)

Dear Shareholder,

I would like to take this opportunity to urge your support of the merger of Plains Exploration & Production Company (PXP) with Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX) and to share why I believe that it is in the best interest of the PXP shareholder.

There are several factors that positively favor the transaction. They include:
  • The strategic nature of the transaction, including the fact that the combination of the PXP, FCX and McMoRan Exploration Co. (MMR) businesses is expected to (1) create the largest diversified U.S.-based natural resource company with an enterprise value in the top five among global mining peers, (2) increase geographic diversification of the combined company within the U.S. and (3) increase commodity diversification for the combined company.
  • The scale of the combined company, which will enable it to compete more effectively than either PXP, FCX or MMR on a standalone basis, through increased cash flow and lower cost of capital investment in future development projects, exploration and acquisitions.
  • The expected lower cost of borrowing, given the investment grade rating currently carried and expected to be maintained by FCX after completion of the merger, which was utilized in funding the cash portion of the merger consideration and will be advantageous in future projects.
  • The financial and operational strength of the combined businesses, which will allow for accelerated value creation across the entire asset portfolio. The attractive, top-tier and complementary growth profiles of both the oil and gas and mining operations combined with strong margins and cash flows will drive near- and long-term stock appreciation.
  • The analyses provided by Institutional Shareholder Services and Glass Lewis represent superficial views based on hearsay. I urge investors not to rely on such reports, but on the opinion of third-party investment banks resulting from months of analysis by independent financial, engineering and geoscience experts. We continue to believe that the analysis and opinion of Barclays Capital, utilizing its own resources and those of third party professionals and set forth in-depth in the Company's proxy materials dated April 18, 2013 available on the Company's website, continues to be the proper conclusion regarding the transaction. A detailed review of the third party expert opinions and other proxy materials, rather than cursory reports, properly presents the correct professional analysis of the value of the transaction to PXP's shareholders and the conclusion that shareholders should rely on to support this transaction.

The PXP board of directors, management and I remain committed to our shareholders and continue to use our best efforts to deliver exemplary value to our shareholders. Please do not lose sight of what we believe will drive premium future share price growth, and that is the power of the combined organization. With the value creation drivers described above, I strongly affirm and support our proposed transaction with FCX and ask that you also vote in favor of the merger.

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