PXP Offers ‘A Sign of Our Sincerity’

Plains Exploration & Production Company
November 18, 2010

Dear Mayor Armenta:

As you are aware, PXP is currently acting as the agent for Atlantic Oil Company and conducting the necessary work to re-abandon the “Block #1” well in the Culver City Dog Park. The remediation effort was made necessary when a small water leak was discovered in the Dog Park by Culver City who subsequently informed PXP on September 28.

While Atlantic Oil Company is the legal owner of the Block No. 1 well and bears responsibility for the costs of the remediating the well, PXP volunteered to share in the expected $200,000 abandonment costs and to act as Atlantic Oil's agent given the fact we are a member of the local business community and are positioned to conduct the work in a more timely fashion than any other operator, the City or the state. We recognize the importance of the Dog Park to the City's residents and share the City's desire to see it reopened as quickly as possible. PXP initiated work on the remediation effort on November 1, and the work continues to progress.

Through the course of our efforts we have confirmed that the well is in fact the source of the water leak that was reported on September 28. We hope to have all of the remediation work for Block #1 completed by next week.

As part of our efforts to remediate the Block No. 1 well, PXP also conducted an evaluation of the other abandoned wells within the boundaries of the Dog Park. After evaluating the well bore diagrams of the Smith No. 5 and Blackhawk Block No. 1 wells, PXP concluded that a pro-active re-abandonment effort of the Smith No. 5 well would be beneficial. The Smith No. 5 well was originally owned by the Block Oil Company and was abandoned in 1929. The well does not meet current DOGGR well abandonment Standards, and PXP can find no evidence the Block Oil Company is still in business.

While there is no evidence the Smith No. 5 well is in imminent threat of leaking or presents a danger to life, health, property or natural resources, its condition would benefit by being upgraded to current abandonment standards. PXP believes conducting this work in a pro-active fashion while our equipment already is on site would provide a long term benefit to the City by preventing future water leaks in the Dog Park.

To conduct this work, PXP will require permits from the Division of Oil, Gas, and Geothermal Resources (DOGGR) as well as a revised Right of Entry agreement from Culver City. PXP will not seek reimbursement for the cost of the abandonment from Culver City, and by this letter is volunteering to fund the re-abandonment work entirely at our expense if the City approves the work. PXP estimates it will cost around $200,000 to re-abandon the Smith No. 5 well.

While admittedly PXP's relationship with the City's leadership has been strained the past several years, PXP has always maintained a desire to forge a stronger working relationship with the City Council and Administrative staff. We hope this offer to pro-actively stage beneficial well remediation work in the Dog Park not previously contemplated is evidence of that desire. We have been pleased at the level of cooperation and productive dialogue we've maintained with the City Manager and Public Works offices throughout the process of addressing the Block #1 well. We hope to continue this positive working relationship in to the future. Please do not hesitate to contact me should you have any questions. Sincerely,

Steve Rusch
Vice President, EH&S and Government Affairs
Plains Exploration & Production Company

CC: The Honorable Mark Ridley-Thomas, Supervisor, 2nd District, Los Angeles County;
      The Honorable Micheal O'Leary, Vice Mayor; The Honorable Scott Maslin,
      Member, City Council; The Honorable Andrew Weissman, Member, City Council;
      The Honorable Jeffrey Cooper, Member, City Council; Mr. John Nachbar,
      City Manager; Ms. Carol Schwab, City Attorney, and Ms. Elena Miller, State Supervisor,
      DOGGR.