On February 25, 2009, Plains Exploration & Production Company ("PXP") issued a press release announcing fourth quarter and full year 2008 results. The press release is furnished herewith as Exhibit 99.1 and is incorporated by reference herein. In connection with such release, PXP has prepared investor slides, which are furnished herewith as Exhibit 99.2 and are incorporated by reference herein.

Pursuant to Item 7.01, PXP is updating its operating and financial guidance for the year ended December 31, 2009.

The information presented herein under Item 2.02 and Item 7.01 shall not be deemed "filed" under the Securities Exchange Act 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as may be expressly set forth by specific reference in such a filing.

Statement Regarding Forward-Looking Statements

This Report on Form 8-K includes forward-looking information regarding PXP that is intended to be covered by the safe harbor "forward-looking statements" provided by the Private Securities Litigation Reform Act of 1995. Statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "will", "would", "should", "plans", "likely", "expects", "anticipates", "intends", "believes", "estimates", "thinks", "may", and similar expressions, are forward-looking statements. Although we believe that our expectations are based on reasonable assumptions, there are risks, uncertainties and other factors that could cause actual results to be materially different from those in the forward-looking statements. These factors include, among other things:

* reserve and production estimates,

* oil and gas prices,

* the impact of derivative positions,

* production expense estimates,

* cash flow estimates,

* future financial performance,

* planned capital expenditures, and

* other matters that are discussed in PXP's filings with the SEC.

These statements are based on our current expectations and projections about future events and involve known and unknown risks, uncertainties, and other factors that may cause our actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. Please refer to our filings with the SEC, including our Form 10-K for the year ended December 31, 2008, for a discussion of these risks.

All forward-looking statements in this report are made as of the date hereof, and you should not place undue reliance on these statements without also considering the risks and uncertainties associated with these statements and our business that are discussed in this report and our other filings with the SEC. Moreover, although we believe the expectations reflected in the forward-looking statements are based upon reasonable assumptions, we can give no assurance that we will attain these expectations or that any deviations will not be material. Except for any obligation to disclose material information under the Federal securities laws, we do not intend to update these forward-looking statements and information.

Updated 2009 full-year financial and operational guidance is included below and reflects the impact of the following forecasted 2009 items:

• lower capital budget of $1.050 billion;

• targeted 10% reduction in total cash general and administrative expense;

• targeted 15% to 20% reduction in total lease operating expense; and

• production sales volumes range of 78 to 82 thousand BOEPD.

These estimates are based on assumptions and estimates that management believes are reasonable based on currently available information; however, management's assumptions and our future performance are both subject to a wide range of business risks and uncertainties and there is no assurance that these goals and estimates can or will be met. Any number of factors could cause actual results to differ materially from those in the following table and accompanying notes, including but not limited to the factors discussed above. The estimates set forth below are given as of the date hereof based only on information available as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements. Further information on risks and uncertainties is available in our filings with the Securities and Exchange Commission, and we encourage you to review such filings.

                    Plains Exploration & Production Company

                Full Year 2009 Operating and Financial Guidance



                                                                     Year Ended
                                                                 December 31, 2009
Production Volumes (MBOE/day)
Production volumes sold                                             78.0 - 82.0
% Oil                                                                   55%
% Gas                                                                   45%
Price Realization % Index (Unhedged)
Oil - NYMEX                                                          80% - 82%
Gas - Henry Hub                                                      87% - 90%
Production Costs per BOE
Lease operating expense                                            $9.20 - $9.55
Steam gas costs (1)                                                $2.20 - $2.45
Electricity                                                        $1.45 - $1.65
Production and ad valorem taxes                                    $1.70 - $1.90
Gathering and transportation                                       $0.85 - $0.95
Depreciation, Depletion and Amortization per BOE(2)               $12.00 - $14.00
General and Administrative Expenses ($/millions)
Cash                                                                 $87 - $92
Stock based compensation (3)                                         $54 - $59
Interest Expense
Average revolver balance                                         30 Day LIBOR+1.75%
$400 Million Senior Notes                                              7.625%
$500 Million Senior Notes                                              7.000%
$600 Million Senior Notes                                              7.750%
Effective Tax Rate                                                   35% - 40%
Weighted Average Equivalent Shares Outstanding (in thousands)
Basic                                                                 108,000
Diluted                                                               110,000
Capital Expenditures ($/millions)                                      $1,050
Derivative Instruments
Crude Oil Put Options
Bbls / day                                                             32,500
Floor                                                                  $55.00
Option premium and interest ($/Bbl)                                    $3.38
Natural Gas Collars
MMbtu / day                                                           150,000
Ceiling                                                                $20.00
Floor                                                                  $10.00
Option premium and interest ($/MMbtu)                                  $0.346

(1) Steam gas costs assume a base SoCal Border index price of $4.50 per MMBtu. The purchased volumes are anticipated to be 40,000-46,000 MMBtu per day.

(2) Includes accretion

(3) Based on current outstanding and projected awards and current stock price.