Plains Exploration & Production Co., Houston, (NYSE: PXP) plans to acquire Stone Energy Corp., Lafayette, La., (NYSE: SGY) for 1.25 Plains share per Stone share, for a total deal value of $1.94 billion, including the assumption of $483 million of debt. The combined company will have an estimated proved reserve base of 500 million BOE (80% oil), and daily production of approximately 105,000 BOE. Plains' holdings in California, the Gulf of Mexico, the Rockies and Texas will expand to 207,643 net developed acres and 992,822 net undeveloped acres. The company's reserve-to-production ratio will be 12 to 14 years; 70% to 75% of production will be oil. Plains stockholders will own approximately 70% of the combined company. The Plains board membership will not change. "The board of directors and I are enthusiastic about combining our high-cash-flow assets and attractive Rockies development opportunities with Plains' long-life assets," says David Welch, Stone chief executive. "The combined company will have strong leverage to oil prices and the ability to grow production profitably. Stockholders of both companies will benefit from the robust portfolio of near-term and long-term growth opportunities." Jim Flores, Plains chairman, president and chief executive, says, "These accretive transactions represent an opportunity for the stockholders of both companies to benefit from combining the strengths of Plains and Stone. Upon completion of the acquisition, Plains will be in an enviable position to accelerate its cash flow per share and strong reserve growth through the Rocky Mountain business...and the Gulf of Mexico...and continued development of its large long-lived California oil resource base." Plains' Rockies assets will be highlighted by the Pinedale/Jonah/Eagle projects in the Green River Basin and a large Middle Bakken position in the Williston Basin. Its Gulf business will include the Big Foot discovery in deep water. Randall & Dewey was financial advisor to Stone. Lehman Brothers Inc. was lead financial advisor to Plains, while J.P. Morgan was also financial advisor and rendered a fairness opinion to Plains.