Filed by Plains Exploration & Production Company Pursuant to Rule 425 of the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934
Subject Company: Nuevo Energy Company Commission File No: 001-10537
The following presentation was made by Plains Exploration & Production Company on March 31, 2004:
P L A I N S E X P L O R A T I O N & P R O D U C T I O N C O M P A N Y
Howard Weil Energy Conference March 31, 2004
N Y S E : P X P
w w w . p l a i n s x p . c o m
Forward Looking Statements
Except for the historical information contained herein, the matters discussed in this presentation are forward-looking statements that involve certain assumptions and known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially. These risks and uncertainties include, among other things, uncertainties inherent in the exploration for and development and production of oil & gas and in estimating reserves, unexpected difficulties in integrating Nuevo’s operations into ours, unexpected future capital expenditures, general economic conditions, oil and gas price volatility, the success of our risk management activities, competition, regulatory changes and other factors discussed in PXP’s filings with the Securities and Exchange Commission.
Forward Looking Statements
PXP and Nuevo have filed a joint proxy statement/prospectus and other documents with the SEC. Investors and security holders are urged to carefully read the joint proxy statement/prospectus because it contains important information regarding PXP, Nuevo and the acquisition. A definitive joint proxy statement/prospectus will be sent to security holders of PXP and Nuevo seeking their approval of the acquisition. Investors and security holders may obtain a free copy of the proxy statement/prospectus (when available) and other documents filed by PXP and Nuevo with the SEC at the SEC’s web site at www.sec.gov. The proxy statement/prospectus and such other documents (relating to PXP) may also be obtained for free from PXP by directing such request to: Plains Exploration & Production Company, 700 Milam, Suite 3100, Houston, TX 77002, Attention: Joanna Pankey; telephone: (832) 239-6000; e-mail: jpankey@plainsxp.com. The proxy statement/prospectus and such other documents (relating to Nuevo) may also be obtained for free from Nuevo by directing such request to: Nuevo Energy Company, 1021 Main Street, Suite 2100, Houston, Texas 77002 Attention: Barbara Forbes; telephone: (713) 374-4870; e-mail: forbesb@nuevoenergy.com.
PXP, its directors, executive officers and certain members of management and employees may be considered “participants in the solicitation” of proxies from PXP’s stockholders in connection with the acquisition. Information regarding such persons and a description of their interests in the acquisition will be contained in the Registration Statement on Form S-4 when it is filed. Nuevo, its directors, executive officers and certain members of management and employees may be considered “participants in the solicitation” in connection with the acquisition. Information regarding such persons and a description of their interests in the acquisition will be contained in the Registration Statement on Form S-4 when it is filed.
PXP Overview Pro Forma for NEV
489 MMBOE reserves
• 83% oil/17% gas
• 71% Proved developed
• 97% domestic
85,000 BOEPD production
• 75% oil/25% gas
16 yr reserves/production ratio
Visible organic growth for both reserves and production
Strong financial profile with a combined $2.3B EV
Largest independent producer in California
10th largest U.S. independent by reserves
PXP Pro Forma Core Operating Areas
Western BU
San Joaquin Valley
OCS
LA Basin
Central BU
East Texas
Permian Basin
Eastern BU
South TX
BSA
PXP Value Creation Strategy
Develop large, durable U.S. reserve base to maintain production
Drill high impact exploitation inventory to grow production and reserves
Utilize financial flexibility to react opportunistically to create shareholder value
PXP Value Creation Strategy
Optimize Cash Flow after Maintenance Capex
Revenues (Flat Production and Commodity Price)
Cash Flow After Maintenance Capex
Maintenance Capex
Cash Costs
Time
PXP Value Creation Strategy
Utilize Growth Capital to Increase Opportunity Cash Flow
PXP Operational Value Drivers
High Impact Exploitation Inventory
Deep Inglewood (DI)
Point Arguello (PTA)
Breton Sound (BSA)
NEV California OCS
San Joaquin Valley (SJV)
Pakenham
DI Top Sentous Structure
Productive Field Limit Outline
DI 2004 Exploitation Wells
Rubel 643
LAI1 655
LAI1 645
DI Exploitation/Development Wells
DI Indicative Returns
DI Indicative Well Economics
8/8ths Basis
2004 Planned Wells 10 – 12
Well Cost, $million $ 1 – 1.5
Production IP, BOEPD 300 – 800
Reserves, MMBOE 0.3 – 0.7
After Tax IRR 100+%
Breton Sound (BSA)
BSA Miocene Prospects Depositional Model
Crawfish
Jambalaya
Gumbo
Sonoma
Skyraider Deep
Catalina
Avenger/Prowler
Black Bullet
Sky Shark
BSA Indicative Returns
BSA Indicative Well Economics
8/8ths Basis
2004 Planned Wells 20 – 25
Well Cost, $million $ 2 – 8
Production IP, MMCFED 3 – 10
Reserves, BCFE 4 – 8
R/P Ratio, Years 1 – 3
After Tax IRR 50+%
Point Arguello (PTA) Project
Rocky Point Structure
Bonito Unit
Pt. Arguello Unit
Sword Unit
Block 451 Test Wells
1,629 BOPD
3,500 BOPD
1,100 BOPD
Expected Spud Date 2nd Quarter, 2004
Point A Indicative Returns
PtA Indicative Well Economics
8/8ths Basis
2004 Planned Wells 2 – 3
Well Cost, $million $ 12 – 15
Production IP, BOEPD 2,000 – 4,000
Reserves, MMBOE 2 – 4
After Tax IRR 75+%
PXP Reserve Growth
PXP
12-31-02
3-Tec
06-30-03
Nuevo
06-30-04
DI, BSA, PtA, CA OCS, SJV, Acquisitions
PXP
PXP Stock Performance
Financial Strategy
Increase borrowing base to $500mm+
Seek credit rating upgrade
Use puts and collars in hedging strategy
Use proceeds from asset sales and excess cash flow to accelerate growth and reduce debt
Recent sale of Illinois and other non core properties to raise $25 million and generate a
$ 30 million NOL.
Enhanced Credit Profile
Improved Credit Statistics as of 12/31/03
Key Credit Benefits
Sheet and credit ratios
– Debt / PD BOE
– Debt / EBITDA
– Debt / capitalization
Ratings Agency Announcements
Moody’s – Review for Upgrade
S&P – Credit Watch Positive
Fitch – Watch Positive
58%
49%
Debt / cap
2.3x
2.1x
Debt / EBITDAX
$2.98 $2.55
Debt / PD Boe
Note: Q3 annualized EBITDA includes $20mm of synergies
PXP/NEV Consolidated Pro Forma Balance Sheet
$(Millions)
12/31/2003
Total Current Assets $155
Property and Equipment, Net 1,995
Other Assets 412
$2,562
Accounts payable & other $204
Commodity hedging liabilities 90
Total Long-Term Debt 890
Deferred Income Tax 219
Other Long-Term Liabilities 216
Total Stockholders’ Equity 943
$2,562
P L A I N S E X P L O R A T I O N & P R O D U C T I O N C O M P A N Y
N Y S E : P X P
w w w . p l a i n s x p . c o m
ON MARCH 12, 2004, PXP AND NUEVO FILED A JOINT PROXY STATEMENT/PROSPECTUS WITH THE SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE IT CONTAINS IMPORTANT INFORMATION REGARDING PXP, NUEVO AND THE PROPOSED TRANSACTION. A DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS WILL BE SENT TO SECURITY HOLDERS OF PXP AND NUEVO SEEKING THEIR APPROVAL OF THE PROPOSED TRANSACTION. INVESTORS AND SECURITY HOLDERS MAY OBTAIN A FREE COPY OF THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED BY PXP AND NUEVO WITH THE SEC AT THE SEC’S WEB SITE AT WWW.SEC.GOV.
THE PROXY STATEMENT/PROSPECTUS AND SUCH OTHER DOCUMENTS (RELATING TO PXP) MAY ALSO BE OBTAINED FOR FREE FROM PXP BY DIRECTING SUCH REQUEST TO: PLAINS EXPLORATION & PRODUCTION COMPANY, 700 MILAM, SUITE 3100, HOUSTON, TX 77002, ATTENTION: JOANNA PANKEY; TELEPHONE: (832) 239-6000; E-MAIL: JPANKEY@PLAINSXP.COM. THE PROXY STATEMENT/PROSPECTUS AND SUCH OTHER DOCUMENTS (RELATING TO NUEVO) MAY ALSO BE OBTAINED FOR FREE FROM NUEVO BY DIRECTING SUCH REQUEST TO: NUEVO ENERGY COMPANY, 1021 MAIN STREET, SUITE 2100, HOUSTON, TEXAS 77002 ATTENTION: BARBARA FORBES; TELEPHONE: (713) 374-4870; E-MAIL: FORBESB@NUEVOENERGY.COM.
PXP, its directors, executive officers and certain members of management and employees may be considered “participants in the solicitation” of proxies from PXP’s stockholders in connection with the acquisition. INFORMATION REGARDING SUCH PERSONS AND A DESCRIPTION OF THEIR INTERESTS IN THE ACQUISITION IS CONTAINED IN THE REGISTRATION STATEMENT ON FORM S-4.
NUEVO, its directors, executive officers and certain members of management and employees may be considered “participants in the solicitation” in connection with the acquisition. INFORMATION REGARDING SUCH PERSONS AND A DESCRIPTION OF THEIR INTERESTS IN THE ACQUISITION IS CONTAINED IN THE REGISTRATION STATEMENT ON FORM S-4.