Plains Exploration & Production (PXP) , a developer of oil and gas properties, swung to profit in its third quarter due to a gain on sale of oil and gas properties and a mark-to-market loss in the year-ago period.
The company posted a profit of $272.7 million, or $3.50 a share, in the quarter, compared with a loss of $31.8 million, or 41 cents a share, a year ago. Third-quarter earnings included a $345.5 million pre-tax gain on the sale of oil and gas properties. Excluding gains related to the sale of oil and gas properties and mark-to-market derivative contracts and charges related to oil and gas hedges and stock options expenses, earnings were 91 cents a share. Analysts polled by Thomson First Call were expecting earnings of 93 cents a share.
Third-quarter revenue rose 7% from a year-ago period to $280.9 million vs. analysts' estimate of $301.7 million.
Oil sales were up 16.6% to $253.8 million. Revenue from sale of gas was down 39.6% at $26.7 million.
For the quarter, sales volumes were 60,634 barrels of oil equivalent a day, compared with 59,196 in the year-ago period. Sales price a barrel of oil equivalent was $56.85, before derivative transactions, compared with $51.03 in the year-ago period.
For the fourth quarter, the company reaffirmed its production guidance of 54 million to 60 million barrels of oil equivalent a day.
The Houston-based company expects production volumes of 52 million to 58 million barrels of oil equivalent a day for 2007. PXP approved a $600 million capital budget for 2007 with about 50% to be utilized for continued development of its California oil fields and the balance for high impact exploration projects.
The company completed the sale of two 2006 Gulf of Mexico Miocene trend discoveries on Nov. 1, for total cash consideration of $706 million. The transaction is effective Sept. 1 and the company expects to record a gain in the fourth quarter.
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