Sandell Seeks a Concrete Plan and Immediate Action at Plains Exploration Post-Closing of the Pogo Acquisition

NEW YORK, Oct. 19 /PRNewswire/ -- Sandell Asset Management Corp. ("Sandell") today sent a letter to Mr. James Flores, Chairman, President, and CEO of Plains Exploration and Production Company ("Plains," "PXP" or the "Company") . Sandell also disclosed beneficial ownership of 5.1% of shares of Plains' common stock in a Schedule 13D filed with the Securities and Exchange Commission today. In the letter to Mr. Flores, Sandell stated that while it is inclined to support the Pogo transaction, it is concerned by Plains' management's inability to provide a strategic plan for the combined company post-closing. The letter further states that Sandell insists the Company provide such a plan and take the following actions immediately after the close of the transaction:

-- Asset sales -- PXP should immediately prepare for a large asset divestiture in the 4th quarter of 2007 with all sale proceeds dedicated to share repurchases. Further, the Company should continue to opportunistically monetize Gulf of Mexico reserves and non-core assets consistent with management's prior commitments. -- MLP creation -- Prior to the announcement of the Pogo deal, PXP was reviewing the formation of an MLP for virtually all of the reserves in California and the Piceance basin. In PXP's recent press release dated 10/9/07, the language on MLP formation remained vague, doing little to inform PXP investors. Investors need a definitive plan and timetable for MLP creation and drop-downs by which management can be held accountable. -- Stock repurchases -- Historically, PXP has been an aggressive purchaser of its own shares. Sandell is concerned that potential complications related to the Pogo transaction, asset sale delays or an unwillingness to repurchase shares may contribute to further share price underperformance. Aggressive share repurchases must be a key part of the value realization plan going forward.

"Plains is an excellent company and has historically created a lot of value for investors. We believe the recent underperformance is related to confusion in the market regarding the plan for the combined Company post- closing including the timetable for asset sales and an MLP," said Thomas E. Sandell, Chief Executive Officer of Sandell Asset Management Corp. "We believe that management has an opportunity to create significant value for investors of up to $90 per share, but that this value can only be accomplished through aggressive execution of the actions we have recommended."

For further information, contact: Mr. Thomas E. Sandell Sandell Asset Management Corp. (212) 603-5700 About Sandell Asset Management Corp.

Sandell Asset Management Corp. is a multi-billion Dollar global investment management firm, founded by Thomas E. Sandell, that focuses on global corporate events and restructurings throughout North America, Continental Europe, the United Kingdom, Latin America and Asia. Sandell frequently will take an "active involvement" in facilitating financial or organization improvements accruing to the benefit of investors.

Disclaimer

This release is for general informational purposes only. It does not have regard to the specific investment objective, financial situation, suitability, or the particular need of any specific person who may view it, and should not be taken as advice on the merits of any investment decision. The views expressed herein represent the opinions of Sandell and are based on or derived from publicly-available information and third party reports with respect to Plains Exploration and Production Company ("the Issuer").

Sandell has not sought or obtained consent from any third party to use any statements or information as having been obtained or derived from statements made or published by third parties. Any such statements or information should not be viewed as indicating the support of such third party for the views expressed herein. No warranty is made that data or information, whether derived or obtained from publicly-available sources or from any third party, are accurate.

Sandell shall not be responsible or have any liability for any misinformation contained in any publicly-available sources or third party report. There is no assurance or guarantee with respect to the prices at which any securities of the Issuer will trade, and such securities may not trade at prices that may be implied from this letter. Any estimates, projections and pro forma information set forth are based on assumptions that Sandell believes to be reasonable, but there can be no assurance or guarantee that actual results or performance of the Issuer will not differ, and such differences may be material. Sandell does not recommend the purchase or sale of any security.

Under no circumstances is this letter to be used or considered an offer to sell or a solicitation of an offer to buy any security. Sandell currently holds shares of common stock of the Issuer. Sandell manages funds and accounts that are in the business of buying and selling public securities. It is possible that there will be developments in the future that cause Sandell from time to time to sell all or a portion of its shares in open market transactions or otherwise (including via short sales), buy additional shares (in open market or privately negotiated transactions or otherwise), or trade in options, puts, calls or other derivative instruments relating to such shares.