Plains Resources Inc. announced Monday that its board of directors has formally approved the previously announced tax-free spin-off of its oil and gas exploration and production business, Plains Exploration & Production Co. (PXP), and established Dec. 11 as the date on record for the spin-off.

Under its spin-off plans, Plains Resources will distribute 100% of the shares of the common stock of PXP, on a pro rata basis, to Plains Resources’s stockholders as of the record date. Plains Resources stockholders at the end of trading Dec. 11 will automatically participate in the distribution. The effective date for the distribution will be December 18. Going forward, PXP has been approved to list its shares of common stock on the New York Stock Exchange under the symbol “PXP”. Plains Resources will continue to trade on the New York Stock Exchange under its existing symbol “PLX”.

On the distribution date of December 18, each Plains Resources stockholder will receive one share of PXP common stock for each share of Plains Resources common stock held as of the record date. Immediately prior to the distribution, Plains Resources will make a $40 million capital contribution to PXP and repay a $7.2 million note payable to PXP. The net effect is expected to be a $47.2 million increase in PXP’s stockholders equity and a commensurate reduction in its bank debt, Plains Resources said.

After the spin-off, PXP will be an independent oil and gas company primarily engaged in the upstream activities of acquiring, exploiting, developing and producing oil and gas in its core areas of operation: onshore California, primarily in the Los Angeles Basin, and offshore California in the Point Arguello unit, and the Illinois Basin in southern Illinois. PXP will be headquartered in Houston, TX.

Plains Resources will also remain Houston-based, and will continue to be an independent energy company engaged in the acquisition, development and exploitation of crude oil and natural gas. Through its ownership in Plains All American Pipeline, LP., Plains Resources has interests in the midstream activities of marketing, gathering, transportation, terminalling, and storage of crude oil.

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