Plains Exploration and Production Co., Houston, (NYSE: PXP) plans to acquire Stone Energy Corp., Lafayette, La., (NYSE: SGY) in a stock- for-stock transaction in which Stone shareholders will receive 1.25 shares of Plains stock per Stone share, representing a transaction valued at $1.46 billion, including the assumption of $483 million of debt. The combined company will have an estimated proved reserve base of 500 million barrels of oil equivalent (80% oil) and core areas in California, the Gulf of Mexico, the Rocky Mountains and Texas, with 207,643 net developed acres and 992,822 net undeveloped acres. The reserve-to-production ratio will be 12-14 years and 70-75% of the production will be oil. "The board of directors and I are enthusiastic about combining our high cash flow assets and attractive Rockies development opportunities with PXP's 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." 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.