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 April 21, 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
IPAA 2004 Oil & Gas Symposium April 21, 2004
Stephen A. Thorington
Executive Vice President & Chief Financial Officer
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 definitive 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 as of 12/31/03
• 83% oil/17% gas
• 71% Proved developed
• 97% domestic
85,000 BOEPD production as per guidance
• 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
Permian Basin East Texas
South TX
Eastern BU
BSA
PXP Pro Forma
California Operating Areas
California
Arroyo Grande
Cymric Hanford So. Belridge Monument Junction
Mount Poso
Pt. Pedernales
Pt. Arguello & P-0451 E/2 (Rocky Point)
Dos Cuadras E. Dos Cuadras Pitas Point Carpinteria
Buena Vista Midway Sunset
Santa Clara Hueneme
Inglewood, San Vincente, Packard & Montebello
Belmont Huntington Beach Beta
Significant PXP areas of activity
Significant NEV areas of activity
Oil fields 0
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
PXP Operational Value Drivers
High Impact Exploitation Inventory Deep Inglewood (DI)
Point Arguello (PTA) and offshore California
Breton Sound (BSA)
San Joaquin Valley (SJV)
East Texas—Cotton Valley
West Texas—Pakenham
What Is Deep Inglewood (DI) ?
Productive zones between the active Vickers-Rindge (V-R) water-flood zone at 3500’ and basement at about 10,500’
319 historical well penetrations below the V-R
– First deep zone found in 1934, ten years after V-R
• 88.5 MMEB cum production, peak rate of 6800 BOEPD in 1962
– 1000 BOEPD present production from 62 active wells
• Most from shallow “Deep”
Previously de-emphasized as an opportunity
– Atypical cost and risk profile for PXP
– Complexity demanded significant time and dollar commitment
– Seismic data a necessity
Inglewood Field–Shallow and Deep Reservoirs
Vickers
Rindge
Rubel Moynier Bradna
Sentous COI
Vickers/Rindge (Proven Reserves)
Various Deep Zones (Potential Reserves)
DI 2004 Exploitation Wells
Rubel 643
LAI1 655
LAI1 645
DI Exploitation/Development Wells
Drilled Wells—2004
Exploitation Wells—2004
Potential Development Wells
PXP Pro Forma California OCS
PXP Properties
NEV Properties
Point Arguello Project
Bonito Unit
Rocky Point Structure
Pt. Arguello Unit
Sword Unit
Block 451 Test Wells 1,629 BOPD 3,500 BOPD 1,100 BOPD
Expected Spud Date 2nd Quarter, 2004
Breton Sound Area
Breton Sound Area
Indicative Well Returns
DI PtA BSA
8/8ths Basis
2004 Planned Wells 10 – 12 2-3 20 – 25
Well Cost, $million $ 1 – 1.5 $12 – 15 $2 – 8
300 – 800 2,000 – 4,000 3 – 10
Production IP
BOEPD BOEPD MMCFED
0.3 – 0.7 2 – 4 4 – 8
Reserves
MMBOE MMBOE BCFE
After Tax IRR 100+% 75+% 50+%
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
Financial Review
N Y S E : P X P w w w . p l a i n s x p . c o m
2003 Results
(in $M) Year Ending December 31,
2003 2002
Revenues 304,090 188,563
Production Expenses 104,819 78,451
General & Administrative, excluding the below 19,884 10,756
SARS 18,010 3,653
Merger costs 5,264 -
Spin-off costs - 777
Depreciation, Depletion, Amortization, and Accretion 52,484 30,359
Income from Operations 103,629 64,567
Interest Expense 23,778 19,377
Expenses of Terminated Equity Offering - 2,395
Other (688) (174)
Income before Income Taxes and Accounting Change 80,539 42,969
Current Taxes 1,224 6,353
Deferred Taxes 32,228 10,379
Income before Accounting Change 47,087 26,237
Cumulative Effect of Accounting Change, net of tax 12,324 -
Net Income 59,411 26,237
Earnings per Share $ 1.78 $ 1.08
Pro Forma Balance Sheet
(As of 12/31/03, in $MM)
Pro Forma
PXP NEV Adjustments Pro Forma
Total Current Assets 60,325 106,431 42,283 209,039
Property and equipment, net 956,895 696,241 265,890 1,919,026
Other assets 166,892 42,304 202,406 411,602
1,184,112 844,976 2,539,667
Current Liabilities-excluding hedges 99,963 103,943 (9,573) 194,333
Commodity Hedging Contracts 55,123 35,005 90,128
Total Long-Term Debt 487,906 369,211 32,502 889,619
Deferred Income Tax 121,435 - 89,656 211,091
Other Long-Term Liabilities 65,429 114,988 30,940 211,357
Total Shareholders’ Equity 354,256 221,829 367,054 943,139
1,184,112 844,976 2,539,667
Long-Term Debt to Total Capitalization 58% 62% 49%
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.
Sell Nuevo properties in Congo for $62 million
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
PXP PF $ 2.98
$ 2.65
2.3x 2.3x
58%
49%
Debt / cap Debt / EBITDAX Debt / PD Boe
Note: Q3 annualized EBITDA includes $20mm of synergies
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
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 SECURITIES AND EXCHANGE COMMISSION. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS IN CONNECTION WITH THE PROPOSED ACQUISITION BECAUSE IT CONTAINS IMPORTANT INFORMATION REGARDING PXP, NUEVO AND THE ACQUISITION. INVESTORS AND SECURITY HOLDERS MAY OBTAIN A FREE COPY OF THE DEFINITIVE JOINT pROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED BY PXP AND NUEVO WITH THE SEC AT THE SEC’S WEBSITE AT WWW.SEC.GOV.
THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS AND SUCH OTHER DOCUMENTS MAY ALSO BE OBTAINED FOR FREE BY DIRECTING A 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.
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.