Plains Exploration and Production Company (NYSE:PXP) held a recent analyst meeting, and outlined the company's long-term plan to grow production and reserves through 2015. This effort involves the development of a number of onshore and offshore areas, and will lead to a further increase in the company's orientation towards crude oil and other liquids.
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Growth Targets
Plains Exploration is targeting annual production growth of 15 to 20% per year, along with annual proved reserves growth of 20%. If the company is successful with its development program, production is projected to be 140,000 barrels of oil equivalent (BOE) per day in 2015, up from an estimated 80,000 BOE per day in 2011. Proved reserves should reach 616 million BOE in 2013, up from 350 million BOE in 2010. (For related reading, see Oil: A Big Investment With Big Tax Breaks.)

Oil Vs. Natural Gas
Plains Exploration has set a $1.6 billion capital budget in 2012, with the majority of the capital dedicated to properties that produce crude oil. These include the Eagle Ford Shale, California and the Gulf of Mexico. The company expects that 68% of the production will be crude oil by 2015, up from 54% of expected 2011 production.

Eagle Ford Shale
The Company will spend 34% of its 2012 capital budget to develop the Eagle Ford Shale. It has 58,700 net acres under lease, and will operate as many as nine rigs to develop the Eagle Ford Shale in 2012.

Eagle Ford Shale production is currently at approximately 10,000 BOE per day and growth from this play will nearly triple by 2014, providing much of the growth needed to meet the company's goals.

The company will spend $300 million, or 20% of its 2012 capital budget on properties in California. It has 211 million BOE of proved reserves in this state, and plans to drill 116 wells here in 2012.

It has approximately 2,300 drilling locations and expects production from the San Joaquin Valley and Los Angeles Basins to grow at a 9 and 10% compound annual growth rate, respectively, from 2011 to 2015.

Another operator with operations in California is Venoco (NYSE:VQ), which has both onshore and offshore assets. The company has the majority of its production from the Sacramento Basin in the northern part of the state.

Berry Petroleum (NYSE:BRY) has oil and gas properties in the San Joaquin Basin in southern California. The company estimates that 2011 production from California will total approximately 20,000 BOE per day. (For related reading, see What Determines Oil Prices?)

Gulf of Mexico
Plains Exploration has 191,000 net acres across 102 blocks in the deepwater area of the Gulf of Mexico. The company is involved with Anadarko Petroleum (NYSE:APC) in the Lucius discovery, and expects first production from here in 2014.

Plains Exploration also has considerable upside from additional drilling at Lucius, as well as the company's exploration portfolio in the deepwater Gulf of Mexico.

The Bottom Line
Plains Exploration and Production Company has a detailed plan to grow the company's production and reserves over the next five years. One component of this exploration development program that distinguishes the company from its peers is that it does not rely solely on trendy onshore shale plays to generate this growth.

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At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.