PXP is an independent oil and gas company primarily engaged in the activities of acquiring, developing, exploring and producing oil and gas properties, primarily in the United States. The Company owns oil and gas properties in the Los Angeles and San Joaquin Basins onshore California; the Santa Maria Basin offshore California; the Piceance and Wind River Basins in the Rocky Mountains; the Permian Basin in West Texas and New Mexico; the Anadarko Basin in the Texas Panhandle and the South Texas and Gulf Coast regions including the Gulf of Mexico.
Plains Exploration & Production Company has a market cap of $2.41 billion; its shares were traded at around $22.38 with a P/E ratio of 4.7 and P/S ratio of 1. Plains Exploration & Production Company had an annual average earning growth of 25.5% over the past 5 years. Through May 5, 2009, the stock has returned about -5.5% YTD.
Entering 2009, George Soros was still heavy in oil and basic material. As we reviewed on, three out of his top six holdings are oil and gas companies: Petrobras ( PBR), Hess Corp. ( HES) and ConocoPhillips ( COP).
Earlier this year, George Soros reflected on his investment in an article he wrote for Financial Times, he stated:
On the long side, where I stuck to my guns, I lost an enormous amount of money. I was impressed by the potential in the new deep-water oilfield in Brazil and bought a large strategic position in Petrobras (PBR), only to see it decline by 75 per cent at one point in time. We also got caught in the developing petrochemical industry in the Gulf.
We did get out of our strategic long position in Vale (RIO), the Brazilian iron ore producer, in time for the end of the commodity bubble and shorted the other big iron ore groups. But we missed an opportunity in the commodities themselves – partly because I knew from experience how difficult it is to trade them.
Now that the oil bubble has burst and commodities are grounded. Arguably, they may even be on the way of recovery. Since he did not get out completely in time last year, George Soros might as well trade on the other side of investment thesis, betting on the rising of the oil prices.
The turnaround in oil and gas stock prices this year has propelled George Soros’s equity portfolio to outperform the outperform the general market by a large margin. George Soros’s hedge fund performance is nowhere to find, but GuruFocus.com tracks the as-is performance of the 4Q08 portfolio performance. Through May 4, 2009, he has made 17.7% with is long positions. The investment in to PXP just confirmed that.
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