Fair Value of Other Financial Instruments
Authoritative guidance on financial instruments requires certain fair value disclosures, such as
those on our long-term debt, to be presented in both interim and annual reports. The estimated fair
value amounts of financial instruments have been determined using available market information and
valuation methodologies described below.
The carrying values of items comprising current assets and current liabilities approximate fair
value due to the short-term maturities of these instruments. Derivative financial instruments included in
our balance sheet are stated at fair value; however, certain of our derivative financial instruments have
a deferred premium, including our crude oil and natural gas put options. The deferred premium
reduces the asset or increases the liability depending on the fair value of the derivative financial
instrument.
The following table presents the carrying amounts and fair values of our other financial
instruments as of December 31, 2011 and 2010 (in thousands):
December 31, 2011
December 31, 2010
Carrying
Amount Fair Value
Carrying
Amount Fair Value
Current Liability
Deferred premium and accrued
interest on derivative contracts . . . . . $ 13,029 $ 13,029 $ 59,895 $ 59,895
Non-Current Liability
Deferred premium and accrued
interest on derivative contracts . . . . .
49,401
49,401
104,260
104,260
Long-Term Debt
Senior revolving credit facility . . . . . . . .
735,000
735,000
620,000
620,000
Plains Offshore senior credit facility . . .
-
-
-
-
7
3
⁄
4
% Senior Notes . . . . . . . . . . . . . . . .
79,281
81,858
600,000
625,500
10% Senior Notes . . . . . . . . . . . . . . . . .
175,385
194,239
530,812
631,388
7% Senior Notes . . . . . . . . . . . . . . . . . .
76,901
79,593
500,000
513,750
7
5
⁄
8
% Senior Notes . . . . . . . . . . . . . . . .
400,000
424,000
400,000
421,000
8
5
⁄
8
% Senior Notes . . . . . . . . . . . . . . . .
394,385
433,331
393,905
438,000
7
5
⁄
8
% Senior Notes . . . . . . . . . . . . . . . .
300,000
324,750
300,000
316,125
6
5
⁄
8
% Senior Notes . . . . . . . . . . . . . . . .
600,000
630,000
-
-
6
3
⁄
4
% Senior Notes . . . . . . . . . . . . . . . . 1,000,000 1,047,500
-
-
The carrying value of our senior revolving credit facility approximates its fair value, as interest
rates are variable, based on prevailing market rates. The fair value of our Senior Notes is based on
quoted market prices from trades of such debt.
F-30