Occidental Petroleum Corp., Los Angeles, (NYSE: OXY) has completed its acquisition of the assets in the Permian Basin of West Texas and New Mexico and the Piceance Basin of Colorado held by Plains Exploration & Production Co., Houston, (NYSE: PXP) for $1.25 billion.

Occidental acquired a 50% interest in these properties in 2007, and purchased the remainder in this transaction. The sale also includes Plains’ interest in approximately 11,500 net undeveloped acres adjacent to its Piceance Basin assets that Plains and Occidental jointly acquired in June 2008.

Current net production is approximately 4,300 barrels of liquids and 52 million cubic feet of gas per day; for a total of 13,000 barrels of oil equivalent per day. The properties have approximately 92 million barrels of oil equivalent of proved reserves (69% gas, 45% developed).

In the Piceance Basin in the first half of 2008, Occidental produced in excess of 50 million cubic feet a day. Occidental expects this to grow to at least 200 million cubic feet a day in 2010, including this acquisition. Occidental's net acreage position in the Piceance Basin now totals 129,000 acres.

Plains acquired the Permian Basin properties in its merger with Pogo Producing Co. in November 2007, and the Piceance Basin properties from Laramie Energy LLC in May 2007.

Plains president and chief executive James C. Flores says the transaction will reduce Plains’ corporate debt by at least $1 billion and enable the company to lower projected 2009 capital expenditures to $1.35 billion.

“This divestment facilitates PXP's rotation from assets with moderate growth and challenging differentials to the unparalleled high-growth Haynesville shale play, which is proving to have stronger operating metrics and growth attributes with higher wellhead realizations,” Flores says.

Plains has a 20% interest in Oklahoma City-based Chesapeake Energy Corp.'s (NYSE: CHK) 550,000-acre leasehold position in the play.

In conjunction with the sale, Occidental has terminated its right of first refusal to purchase oil and gas properties from Plains in the Packard, San Vicente, Inglewood, Las Cienegas and Montebello fields in the Los Angeles Basin.

The effective date is Dec. 1.

Banc of America Securities LLC and Barclays Capital Inc. were advisors to Plains.