Bloomberg News

Plains Exploration Gets $7 Billion in Loans for BP, Shell Deal

September 11, 2012

Plains Explorations & Production Co. (PXP:US), the oil and gas producer acquiring assets from BP Plc and Royal Dutch Shell Plc (RDSA), obtained commitments for $7 billion in loans to support the purchase.

JPMorgan Chase & Co., Bank of America Corp., Bank of Montreal, Barclays Plc, Citigroup Inc., Royal Bank of Canada, Bank of Nova Scotia, Toronto-Dominion Bank and Wells Fargo & Co. are providing the financing for the Houston-based company, according to a regulatory filing.

The debt will consist of a $3 billion five-year revolving line of credit, a $1.25 billion seven-year term loan and a $750 million five-year term portion, according to the filing.

The banks are also providing a $2 billion senior unsecured bridge loan, according to the filing. Proceeds will be used to refinance certain Plains Exploration debt, finance the cash portions of the acquisitions as well as pay certain fees and expenses associated with the purchases.

Plains Exploration agreed to acquire from BP all of its interests in certain deepwater Gulf of Mexico oil and gas properties for $5.5 billion. Shell sold its stake in a field co- owned with BP for $560 million, according to a statement yesterday.

Bridge financings usually mature in one year and are often used as backstops to bond offerings or longer-dated bank debt.

To contact the reporter on this story: Michael Amato in New York at mamato3@bloomberg.net

To contact the editor responsible for this story: Faris Khan at fkhan33@bloomberg.net


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