$250,000,000

PLAINS EXPLORATION & PRODUCTION COMPANY

7 ¹/8% Senior Notes due 2014

PURCHASE AGREEMENT

June 18, 2004

LEHMAN BROTHERS INC.

J.P. MORGAN SECURITIES INC.

BANC OF AMERICA SECURITIES LLC

BNP PARIBAS SECURITIES CORP.

HARRIS NESBITT CORP.

c/o Lehman Brothers Inc.

745 Seventh Avenue, Third Floor

New York, New York 10019

Dear Ladies and Gentlemen:

Plains Exploration & Production Company, a Delaware corporation (the Issuer), proposes, upon the terms and considerations set forth herein, to issue and sell to Lehman Brothers Inc., J.P. Morgan Securities Inc. (together, the Representatives), Banc of America Securities LLC, BNP Paribas Securities Corp. and Harris Nesbitt Corp. (collectively, and including the Representatives, the Initial Purchasers), $250,000,000 in aggregate principal amount of its 7 ¹/8% Senior Notes due 2014 (the Securities). The Securities will have terms and provisions that are summarized in the Offering Memorandum (as defined below) and will be unconditionally guaranteed on a senior basis (the Guarantees) by all of the Issuers existing domestic restricted subsidiaries, other than The Congo Holding Company, a Texas corporation, and The Nuevo Congo Company, a Delaware corporation (together, the Congo Guarantors), and by its future domestic restricted subsidiaries, each as described in the Offering Memorandum (the Guarantors). The Congo Guarantors will guarantee the Securities 45 days after the Closing Date (as defined below), if certain conditions as described in the Indenture (as defined below) and Offering Memorandum are met. This is to confirm the agreement concerning the purchase of the Securities from the Issuer by the Initial Purchasers.

The Securities and Guarantees are to be issued pursuant to an Indenture (the Indenture) to be dated as of June 30, 2004 (the Closing Date), among the Issuer, the Guarantors and Wells Fargo Bank, N.A., as trustee (the Trustee). As part of transactions described under the captions Recent DevelopmentsRecapitalization Transactions and Recent DevelopmentsConsent Solicitation for Our 8 ³/4% Senior Subordinated Notes in the Offering Memorandum, the Issuer and/or Nuevo Energy Company, a Delaware company and a wholly-owned subsidiary of the Issuer (Nuevo), as the case may be, have entered or will enter into the following transactions, collectively referred to as the Transactions, which are expected to be consummated on or prior to the Closing Date: (i) Nuevos cash tender offer for any and all of its 9 ³/8% Senior Subordinated Notes due 2010 (the Nuevo Notes) and solicitation of consents from the holders of the Nuevo Notes to amend certain provisions of the indenture under which the Nuevo Notes were issued; (ii) Nuevos redemption of any and all of its outstanding 5.75% Convertible Subordinated Debentures due December 15, 2026, the proceeds of which will be used by Nuevos wholly-controlled financing trust to redeem all of the trusts outstanding $2.875 Term Convertible Securities, Series A and all of the $2.875 common securities held by Nuevo; (iii) the Issuers termination of Nuevos $400 million existing credit facility (the Nuevo Credit Agreement); (iv) the Issuers amendment of its senior secured credit facility (the Senior Secured Credit Agreement); and (v) the Issuers solicitation of consents from the holders of its outstanding 8 ³/4% Senior Subordinated Notes due 2012 (the 8 ³/4% Notes) to amend certain provisions of the indenture under which the 8 ³/4% Notes were issued (the 8 ³/4% Notes Consent Solicitation) .

This Agreement, the Indenture, the Securities, the Guarantees, the Exchange Securities (as defined below), the Exchange Guarantees (as defined below) and the Registration Rights Agreement (as defined below) are referred to in this Agreement collectively as the Operative Documents. The Nuevo Credit Agreement, Senior Secured Credit Agreement, security instruments (as discussed therein), the First Supplemental Indenture, dated as of May 27, 2004 to the indenture governing the Nuevo Notes and the Amended and Restated Indenture, dated June 18, 2004, amending and restating the indenture relating to the 8 ³/4% Notes are referred to in this Agreement together as the Transaction Agreements. The Operative Documents and the Transaction Agreements are referred to in this Agreement collectively as the Transaction Documents.

The Securities will be sold to the Initial Purchasers without registration under the Securities Act of 1933, as amended (the Securities Act), in reliance on exemptions under the Securities Act. The Issuer has prepared a preliminary offering memorandum, dated June 14, 2004 (the Preliminary Offering Memorandum), and an offering memorandum, dated the date hereof (the Offering Memorandum), setting forth, and incorporating by reference, information regarding the Issuer and the Guarantors, the Congo Guarantors, the Securities and the Exchange Securities. Any references herein to the Preliminary Offering Memorandum and the Offering Memorandum will be deemed to include all amendments and supplements thereto. Copies of the Preliminary Offering Memorandum have been, and copies of the Offering Memorandum will be, delivered by the Issuer to the Initial Purchaser pursuant to the terms of this Agreement. The Issuer hereby confirms that it has authorized the use of the Preliminary Offering Memorandum and the Offering Memorandum in connection with the offering and resale of the Securities by the Initial Purchasers in the manner contemplated by this Agreement.

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Holders (including subsequent transferees) of the Securities will have the registration rights set forth in the registration rights agreement (the Registration Rights Agreement), among the Issuer, the Guarantors and the Initial Purchasers, to be dated the Closing Date, for so long as such Securities constitute Transfer Restricted Securities (as defined in the Registration Rights Agreement). Pursuant to the Registration Rights Agreement, the Issuer, the Guarantors and the Congo Guarantors (if applicable) will agree to file with the U.S. Securities and Exchange Commission (the Commission) under the circumstances set forth therein (i) a registration statement under the Securities Act (the Exchange Offer Registration Statement) relating to the Issuers 7 ¹/8% Senior Notes due 2014 (the Exchange Securities) and the Guarantors guarantees (and the Congo Guarantors guarantees, if the Congo Guarantors are guarantors under the Indenture) thereof (the Exchange Guarantees) to be offered in exchange for the Securities and the Guarantees (such offer to exchange being referred to as the Exchange Offer) and (ii) a shelf registration statement pursuant to Rule 415 under the Securities Act (the Shelf Registration Statement; together with the Exchange Offer Registration Statement, the Registration Statements) relating to the resale by certain holders of the Securities, and to use their reasonable best efforts to cause such Registration Statements to be declared effective.

The Issuer hereby confirms its agreement with the several Initial Purchasers concerning the purchase and resale of the Securities, as follows:

1. Purchase and Resale of the Securities. (a) The Issuer agrees to issue and sell the Securities to the several Initial Purchasers as provided in this Agreement, and each Initial Purchaser, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Issuer the respective principal amount of Securities set forth opposite such Initial Purchasers name in Schedule I hereto at a price equal to 97.478% of the principal amount thereof plus accrued interest, if any, from June 30, 2004 to the Closing Date. The Issuer will not be obligated to deliver any of the Securities except upon payment for all the Securities to be purchased as provided herein.

(b) The Issuer understands that the Initial Purchasers intend to offer the Securities for resale on the terms set forth in the Offering Memorandum. Each Initial Purchaser, severally and not jointly, represents, warrants and agrees that:

(i) it is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act (a QIB) and an accredited investor within the meaning of Rule 501(a) under the Securities Act;

(ii) it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities by means of any form of general solicitation or general advertising within the meaning of Rule 502(c) of Regulation D under the Securities Act (Regulation D) or in any manner involving a public offering within the meaning of Section 4(2) of the Securities Act; and

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(iii) it has not solicited offers for, or offered or sold, and will not solicit offers for, or offer or sell, the Securities as part of their initial offering except:

A. within the United States to persons whom it reasonably believes to be QIBs in transactions pursuant to Rule 144A under the Securities Act (Rule 144A) and in connection with each such sale, it has taken or will take reasonable steps to ensure that the purchaser of the Securities is aware that such sale is being made in reliance on Rule 144A; or

B. in accordance with the restrictions set forth in Annex A hereto.

(c) Each Initial Purchaser acknowledges and agrees that the Issuer and, for purposes of the opinions to be delivered to the Initial Purchasers pursuant to Sections 5(g) and 5(h), counsel for the Issuer and the Guarantors and counsel for the Initial Purchasers, respectively, may rely upon the accuracy of the representations and warranties of the Initial Purchasers, and compliance by the Initial Purchasers with their agreements, contained in paragraph (b) above (including Annex A hereto), and each Initial Purchaser hereby consents to such reliance.

(d) The Issuer acknowledges and agrees that the Initial Purchasers may offer and sell Securities to or through any affiliate of an Initial Purchaser and that any such affiliate may offer and sell Securities purchased by it to or through any Initial Purchaser.

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