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                                                                    EXHIBIT 99.1

[PXP LOGO] Plains Exploration & Production Company
           500 Dallas St., Suite 700
           Houston, TX  77002

                                                                    NEWS RELEASE

Contact:  Stephen A. Thorington
          Executive Vice President and Chief Financial Officer
          (713) 739-6700 or (800) 934-6083


FOR IMMEDIATE RELEASE

              PLAINS EXPLORATION ANNOUNCES AN AGREEMENT TO ACQUIRE
                          3TEC ENERGY FOR $432 MILLION

     - 3TEC ENERGY STOCKHOLDERS TO RECEIVE $8.50 CASH AND 0.85 PXP SHARES -

Houston, Texas - February 3, 2003 - Plains Exploration & Production Company
("PXP" or the "Company") (NYSE: PXP) and 3TEC Energy Corporation ("3TEC")
(NASDAQ: TTEN) announced today that they have entered into a definitive
agreement pursuant to which PXP will acquire 3TEC for a combination of cash and
stock. Under the terms of the transaction, 3TEC stockholders will receive $8.50
in cash and 0.85 shares of PXP's common stock for each share of 3TEC common
stock, subject to certain adjustments based on PXP's share price prior to
closing. Following the acquisition, PXP will be a large, domestic independent
oil and gas company with an expected enterprise value of over $900 million. It
is anticipated that this acquisition should benefit the stockholders of both
companies by creating an enterprise with the following attributes:

     .    Highly Accretive To Shareholders--the transaction is expected to be
          immediately and significantly accretive to PXP's pro forma per share
          earnings and cash flow for 2003 and 2004.

     .    Significant Exploration Potential--PXP will gain significant
          exploration potential in the Gulf Coast region of South Louisiana.
          This resulting property base is expected to supply several years of
          drilling locations, and should expand through an extensive, ongoing
          3-D seismic acquisition and evaluation program. 3TEC has a three year
          exploration drilling inventory with multiple separate prospects which
          complements the development program at PXP, particularly the Inglewood
          field in Southern California.

     .    Establishes New Core Areas--3TEC provides PXP with new core areas in
          East Texas and the Gulf Coast, both of which have strong growth
          potential. These areas complement PXP's primary production area in
          Southern California.

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     .    More Balanced Production Profile/Reserve Base--upon completion of the
          acquisition, PXP is expected to have a production mix of 37% natural
          gas and 63% oil, and a proved reserve base that will be 19% natural
          gas and 81% oil with total proved reserves of 302 MMBOE at year end
          2002. PXP's proved developed reserves as a percentage of total
          reserves are expected to increase to 58% from 54% while the
          reserve-to-production ratio will decrease from 27.1 years to 20.9
          years. PXP's production should increase in excess of 50% as a result
          of the acquisition. In addition, it is anticipated that the
          transaction will result in enhanced capital allocation for the Company
          as lower-risk California and East Texas reserves should provide
          significant free cash flow to fund higher impact, exploration
          activities in South Louisiana.

     .    Combined Production Partially Hedged for 2003 and 2004--3TEC's natural
          gas hedges and PXP's crude oil hedges lock in attractive financial
          accretion and returns while substantial free cash flow generation
          should allow the Company to reduce debt and invest in future growth.

     .    Enhanced Credit Profile and Stockholder Liquidity--in addition to
          enhanced geographic diversification and increased size, PXP's pro
          forma cash flow to interest and debt coverage ratios should improve.
          Moreover, the transaction should result in a more diversified
          stockholder base and increased public float, both of which should
          provide improved liquidity to PXP's and 3TEC's existing stockholders.

Mr. James C. Flores, Chairman and Chief Executive Officer of PXP stated, "This
transaction represents a cornerstone in the transformation of PXP and is
consistent with our previously articulated growth strategy. 3TEC's high quality,
natural gas oriented properties bring more balance to our reserve base and
production mix and diversity to our risk profile. Additionally, the recent
exploration success 3TEC has had in South Louisiana is very exciting and we
believe its continuation will lead to substantial organic reserve and production
growth. Having spent much of my career working both onshore and offshore South
Louisiana, the quality of 3TEC's prospect inventory, acreage position and
technical capabilities are truly unique for an independent of its size. 3TEC's
high impact exploration program is very complementary to PXP's substantial
inventory of low-risk development drilling. After the acquisition, PXP will have
the prospect inventory, financial flexibility and technical capability to
deliver significant production growth through the drillbit and be opportunistic
regarding further acquisitions."

Mr. John Raymond, President and Chief Operating Officer of PXP stated, "Clearly,
the strategic merits of the transaction speak for themselves. While the
strategic benefits are important, it is equally important to understand that the
rationale behind the deal goes far beyond the strategic benefits as it satisfies
all of our key constructs from a financial and operational perspective. To this
end, upon consummation, this transaction will provide for meaningful immediate
accretion to each of our key financial metrics and is expected to generate a
competitive, compelling return on capital which speaks to the longer term value
and vision for the business. The larger scale coupled with the geographic
diversity and financial flexibility that this transaction manifests further
positions us to optimistically look to the future."

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Mr. Floyd C. Wilson, 3TEC's Chairman and Chief Executive Officer stated, "When
3TEC was founded in 1999, our primary goal was the creation and realization of
stockholder value. In the near term, we believe the transaction with PXP will
provide 3TEC stockholders with excellent value and substantially improved
liquidity in their securities. Over the longer term, 3TEC's high potential
exploration program should provide excellent reinvestment opportunities for the
combined company's substantial cash flow. The future of PXP is very exciting as
this transaction results in a company with the prospect inventory and financial
resources to conduct a significant South Louisiana exploration program, being
led by Jim Flores, who is widely recognized as an industry leader with a long
track record of success in South Louisiana."

                           Major Terms and Conditions

Under the terms of the definitive agreement, 3TEC stockholders will receive
$8.50 of cash and 0.85 shares of PXP's common stock for each share of 3TEC
common stock, which based on PXP's January 31, 2003 closing price of $9.96 per
share, equates to $16.97 per 3TEC common share. This exchange ratio is subject
to an upward or downward adjustment should the market price of PXP's stock fall
below $7.65 per share or rise above $12.35 per share. This collar mechanism is
intended to provide that the total value of the consideration received by 3TEC
stockholders will be between $15.00 per 3TEC common share and $19.00 per 3TEC
common share. For the purpose of the collar, the market price of PXP common
stock for purposes of this transaction is defined as the average closing price
of PXP common stock during the 20 trading day period ending on the third trading
day prior to closing. The transaction is expected to qualify as a tax free
reorganization under Section 368(a) and is expected to be tax free to PXP
stockholders and tax free for the stock portion of the consideration received by
3TEC stockholders who receive stock in the transaction. PXP anticipates funding
the cash portion of the transaction through a new credit facility. The Boards of
Directors of both companies have approved the merger agreement and each has
recommended it to their respective stockholders for approval. The transaction
will remain subject to stockholder approval from both companies and other
customary conditions. Post closing, 3TEC stockholders will own approximately 40%
of the combined company and PXP stockholders will own approximately 60% of the
combined company subject to adjustments under the collar mechanism.

Mr. James C. Flores will remain as Chairman and Chief Executive Officer and
PXP's current executive staff will continue in their capacities including: Mr.
John T. Raymond (President and Chief Operating Officer), Mr. Stephen A.
Thorington (Executive Vice President and Chief Financial Officer), Mr. Timothy
T. Stephens (Executive Vice President - Administration, Secretary and General
Counsel) and Mr. Thomas M. Gladney (Senior Vice President of Operations). The
size of PXP's Board of Directors will increase by two directors to be appointed
by 3TEC. The transaction will be accounted for as a purchase of 3TEC by PXP
under purchase accounting rules and PXP will continue to use the full cost
method of accounting for its oil and gas properties.

The acquisition is expected to be immediately and significantly accretive to
PXP's earnings and cash flow. Based on a 3TEC transaction value of approximately
$432 million and $80 million of unproved properties, the transaction implies a
proved reserve purchase price of $1.19 per Mcfe.

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The following table provides detail on key proved reserve, operating and
financial data:

<TABLE>
<CAPTION>
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                                                       PXP                3TEC               Pro Forma
                                                  --------------       --------------     ----------------
<S>                                               <C>                 <C>                 <C>
Reserves (12/31/02):
   Proved Reserves (MMBOE)                             253                 49                  302
   % Oil                                                95%                13%                  81%
   % Proved Developed                                   54%                81%                  58%
   Reserve Life (Years)                               27.1                9.7                 20.9

2003E Production Data:
   Production (MBOE)/(1)/                         9,400 - 9,600       5,800 - 6,400       15,200 - 16,000
   % Oil                                                95%                14%                  63%

2003E Financial Data:
   Production Expenses ($/BOE)                    $9.00 - $9.15       $4.62 - $4.92       $ 7.50 - $ 7.60
   G&A ($/BOE) /(2)/                              $1.50 - $1.60       $1.62 - $1.74       $ 1.40 - $ 1.50
   Capital Expenditures ($MM)                     $70.0 - $80.0       $55.0 - $65.0       $125.0 - $145.0

Pro Forma Combined Hedge Position:
   Crude Oil Hedges (bpd)
       2003 Swaps - $23.81/bbl                       19,250
       2004 Swaps - $23.82/bbl                       17,500
   Gas Hedges (Mcf/d)
       2003

         Swaps - $5.60/mcf (February)                                   40,000
         Swaps - $5.02/mcf (March-December)                             50,000
         Collar - $3.20 x $3.54/mcf (January-March)                     30,000
       2004

         Swaps - $4.45/mcf                                              20,000
         Collar - $4.00 x $5.15/mcf                                     20,000
</TABLE>

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(1)  Based on company guidance.
(2)  PXP's G&A does not include expenses related to outstanding stock
     appreciation rights (SARS). 2003 results will include expenses related to
     changes in the market price of common stock versus the average price of
     SARS and cash paid upon exercise in excess of amounts previously expensed.

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                           Other Terms and Conditions

The transaction is subject to approval by the stockholders of both companies and
other customary closing conditions. Stockholders representing approximately 22%
of 3TEC's ownership, and stockholders representing approximately 12% of PXP's
ownership have agreed to vote in favor of the transaction. Both companies intend
to hold stockholders meetings as soon as practicable. The companies anticipate
completing the transaction in the second quarter of 2003.

Lehman Brothers Inc. acted as a financial advisor to PXP and Credit Suisse First
Boston LLC and Bear, Stearns & Co. Inc. acted as financial advisors for 3TEC.

A conference call to discuss the transaction will be hosted by the senior
management teams of PXP and 3TEC at 11 a.m. (Central) on Monday, February 3,
2003. Investors wishing to participate may dial 1-800-903-0247 or int'l:
785-830-1956. Reference Conference I.D#: Plains XP. The replay will be available
for 2 weeks at 1-800-938-2801 or int'l: 402-220-9031. Presentation materials
related to the transaction are available on PXP's and 3TEC's website at
www.plainsxp.com and www.3tecenergy.com, respectively.

PXP is an independent oil and gas company primarily engaged in the upstream
activities of acquiring, exploiting, developing and producing oil and gas in its
core areas of operation: onshore California, primarily in the Los Angeles Basin,
and offshore California in the Point Arguello unit, and the Illinois Basin in
southern Illinois. PXP is headquartered in Houston, Texas.

3TEC is engaged in the acquisition, development, production and exploration of
oil and natural gas reserves. 3TEC's properties are concentrated in East Texas
and the Gulf Coast region of the United States, both onshore and in the shallow
waters of the Gulf of Mexico. 3TEC's management and technical staff have
substantial experience in each of these areas.

               Additional Information & Forward Looking Statement

This press release includes "forward-looking statements" as defined by the
Securities and Exchange Commission ("SEC"). Such statements are those concerning
the companies' merger and strategic plans, expectations and objectives for
future operations. All statements included in this press release that address
activities, events or developments that the companies expect, believe or
anticipate will or may occur in the future are forward-looking statements. These
include:

          .    completion of the proposed merger,

          .    effective integration of the two companies

          .    reliability of reserve and production estimates,

          .    production expense,

          .    cash flow and EBITDA estimates,

          .    future financial performance, and

          .    other matters which are discussed in PXP's and 3TEC's filings
               with the SEC.

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These statements are based on certain assumptions made by the companies based on
their experience and perception of historical trends, current conditions,
expected future developments and other factors they believe are appropriate in
the circumstances. Such statements are subject to a number of assumptions, risks
and uncertainties, many of which are beyond the companies' control. Statements
regarding future production are subject to all of the risks and uncertainties
normally incident to the exploration for and development and production of oil
and gas. These risks include, but are not limited to, inflation or lack of
availability of goods and services, environmental risks, drilling risks and
regulatory changes. Investors are cautioned that any such statements are not
guarantees of future performance and that actual results or developments may
differ materially from those projected in the forward-looking statements.

Investors and security holders are urged to read the proxy statement/prospectus
that will be included in the Registration Statement on Form S-4 to be filed with
the SEC in connection with the proposed merger. PXP and 3TEC will file the proxy
statement/prospectus with the SEC. Investors and security holders may obtain a
free copy of the proxy statement/prospectus (when available) and other documents
filed by PXP and 3TEC with the SEC at the SEC's web site at www.sec.gov. The
proxy statement/prospectus and such other documents (relating to PXP) may also
be obtained for free from PXP by directing such request to: Plains Exploration &
Production Company, 500 Dallas, Suite 700 Houston, TX 77002, Attention: Joanna
Pankey; telephone: (713) 739-6700; e-mail: jpankey@plainsxp.com. The proxy
statement/prospectus and such other documents (relating to 3TEC) may also be
obtained for free from 3TEC by directing such request to: 3TEC Energy
Corporation, 700 Milam, Suite 1100, Houston, Texas 77002.

PXP, its directors, executive officers and certain members of management and
employees may be considered "participants in the solicitation" of proxies from
PXP's stockholders in connection with the merger. Information regarding such
persons and a description of their interests in the merger will be contained in
the Registration Statement on Form S-4 when it is filed.

3TEC, its directors, executive officers and certain members of management and
employees may be considered "participants in the solicitation" in connection
with the merger. Information regarding such persons and a description of their
interests in the merger will be contained in the Registration Statement on Form
S-4 when it is filed.

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