In a high-risk move, Plains Exploration (PXP) is levering up big time in order to acquire wells in the Gulf of Mexico from the BP and Royal Dutch Shell. PXP will be tapping credit facilities in order to fund the $6.1 billion purchase of wells which are worth more than the entire market capitalization of the company. Initial financing, the company noted, will be fully provided by a consortium of six banks including JPMorgan Chase and Bank of America. Given the swelling of its balance sheet, PXP’s shares fell more than 10% on Monday.
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