Energy XXI Provides Operations Update, Hosts Fourth Annual Investor Day
Fiscal first quarter production averages 46,600 BOE/d
Horizontal program helps West Delta 73 production triple since acquisition
Heron well at Main Pass logs 100 feet of net oil pay
HOUSTON, Oct. 22, 2013 (GLOBE NEWSWIRE) -- Energy XXI (Nasdaq:EXXI) (LSE:EXXI) today provided an operations update, including production and recent exploration and development results.
Production Update
During the company's fiscal first quarter ended Sept. 30, 2013, production averaged approximately 46,600 barrels of oil equivalent per day (BOE/d), with oil production averaging approximately 29,700 barrels per day (Bbl/d).
"Our base production has remained strong, in line with our year-end exit rate of 47,000 BOE/d, with only two rigs drilling development wells during the quarter," Energy XXI Chairman and Chief Executive Officer John Schiller said. "With a mild hurricane season behind us and drilling activity set to increase during our second half, we continue to expect year-over-year production growth."
Operations Update
At West Delta 73 (100% WI/ 83% NRI), the Big Sky 3 well was brought online in mid-August at 1,275 Bbl/d and 825 thousand cubic feet per day (Mcf/d) gross with a flowing tubing pressure of 750 psi. Big Sky 3 was drilled to 11,600 feet measured depth (MD)/ 7,995 feet total vertical depth (TVD) with a 1,283 foot lateral into the F-30 sand. The Hulk well was drilled to 12,155 feet MD/ 9,326 feet TVD, including a 1,000-foot lateral section into the H-35 sand. Hulk was brought online last week at 1,690 Bbl/d of oil and 1,700 Mcf/d of natural gas, gross, with flowing tubing pressure of 1,360 psi. The next horizontal well at West Delta, Gunn, has spud and will be drilled to a proposed depth of 10,850 feet MD/ 8,250 feet TVD, including a 1,000-foot lateral section targeting the F-40 sand. The West Delta 73 horizontal program continues to exceed expectations in both production and reserves. A second rig is scheduled to arrive at West Delta 73 later this calendar year to accelerate oil development. "West Delta 73's ongoing program continues to deliver strong results," Executive Vice President of Exploration and Production Ben Marchive said. "The last two wells have added more than 2,000 Bbl/d of oil gross to our production, and we have a second rig set to arrive in the field to accelerate oil volume growth. The horizontal program at West Delta 73, initiated a year ago, has helped us triple oil production from the field since its acquisition in December 2010."
In the Main Pass 61 field (100% WI/ 78% NRI), the Don Lino well has been drilled to a total depth of 9,550 feet MD/ 8,200 feet TVD, and has logged 126 feet of net pay in three sands. The high-angle well will be dual-completed into the J-6 and BA-4AA sands and is expected to be brought online in mid-November with a flow rate of 1,400 Bbl/d gross. The Don Carlos well will follow Don Lino at Main Pass and will also be a dual-completion into the J-6 and BA-4AA sands.
In the company's shallow-water salt dome exploration play, the Heron well (25% WI/ 17.8% NRI), located on Main Pass Block 295 and operated by Fieldwood, has reached total depth of 19,555 feet MD/ 19,510 feet TVD. In addition to the previously announced 76 feet of net oil pay encountered in two shallow sands, the well subsequently found oil pay across multiple sands between 11,400 feet and 16,700 feet MD, bringing the total to 100 feet of net oil pay. The well is being evaluated to determine a delineation and development program for the discovery, with follow-up drilling expected to begin around calendar year end.
The Merlin well (50% WI/ 41% NRI), located on Vermilion Block 178, was spud in mid-June and currently is drilling below 14,100 feet MD/ 12,000 feet TVD. Energy XXI is the operator at Merlin, which is targeting multiple oil and gas sands trapped against a salt dome, with a proposed depth of 15,700 feet TVD.
Within the ultra-deep exploration program with Freeport-McMoRan, the Davy Jones offset well (15.8% WI/12.3% NRI) is being readied for completion. The Rowan EXL III is expected to be on site in December to begin the completion with a production test to follow in the first half of calendar 2014. Once the Rowan EXL III has completed the Davy Jones offset, the rig is expected to move to the Blackbeard complex to begin completion of the Blackbeard West #2 well, which logged more than 200 feet of net pay.
The Lineham Creek exploration prospect (9% WI/ 6.75% NRI), located onshore in Cameron Parish, Louisiana, has reached total depth in the sidetrack wellbore at 24,600 feet. The results of the well are under review, and Freeport McMoRan Oil and Gas plans to propose a completion operation in the sands above 24,000 feet under the Operating Agreement.
The Lomond North prospect (18% WI/ 13% NRI) in the Highlander area, located primarily in St. Martin Parish, Louisiana, is drilling below 26,800 feet toward a proposed total depth of 30,000 feet. The well is targeting Lower Wilcox and Cretaceous objectives below the salt weld. Lomond North is approximately 65 miles north of the partnership's Davy Jones discovery.
Capital Expenditures
Capital expenditures for fiscal 2014, which began July 1, 2013, are now estimated at $675 million. The additional $15 million over the previously announced budget are due to the reclassification of certain general and administrative costs as capitalized costs, and therefore do not affect free cash flow expectations.
Annual Investor Day
Energy XXI will host an investor day in New York tomorrow, Oct. 23, 2013, beginning with a presentation at 9 a.m. Eastern time by Chairman and Chief Executive Officer John Schiller. Information regarding webcasting will be available on the Energy XXI homepage (www.EnergyXXI.com) in the Investor Relations, Events & Presentations section.
Forward-Looking Statements
All statements included in this release relating to future plans, projects, events or conditions and all other statements other than statements of historical fact included in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions, including changes in long-term oil and gas prices or other market conditions affecting the oil and gas industry, reservoir performance, the outcome of commercial negotiations and changes in technical or operating conditions, among others, that could cause actual results, including project plans and related expenditures and resource recoveries, to differ materially from those described in the forward-looking statements. Energy XXI assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.
About the Company
Energy XXI is an independent oil and natural gas exploration and production company whose growth strategy emphasizes acquisitions, enhanced by its value-added organic drilling program. The company's properties are located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore. Cantor Fitzgerald Europe is Energy XXI's listing broker in the United Kingdom. To learn more, visit the Energy XXI website at www.EnergyXXI.com.
Competent Person Disclosure
The technical information contained in this announcement relating to operations adheres to the standard set by the Society of Petroleum Engineers. Phil Kerig, Director of Corporate Development, a registered Petroleum Engineer, is the qualified person who has reviewed and approved the technical information contained in this announcement.
GLOSSARY
Barrel – unit of measure for oil and petroleum products, equivalent to 42 U.S. gallons.
BOE – barrels of oil equivalent, used to equate natural gas volumes to liquid barrels at a general conversion rate of 6,000 cubic feet of gas per barrel.
BOE/d – barrels of oil equivalent per day.
Bbl/d – barrels per day of oil or condensate.
MMBTU – million British thermal units.
Mcf/d – thousand cubic feet of gas per day.
MD – total measured depth of a well.
Net Pay – cumulative hydrocarbon-bearing formations.
NRI, Net Revenue Interest – the percentage of production revenue allocated to the working interest after first deducting proceeds allocated to royalty and overriding interest.
Proved, Probable, Possible reserves – are as defined in the SPE/World Petroleum Congress Standard.
psi – pounds per square inch.
TD – target total depth of a well.
TVD –true vertical depth of a well.
WI, Working Interest – the interest held in lands by virtue of a lease, operating agreement, fee title or otherwise, under which the owner of the interest is vested with the right to explore for, develop, produce and own oil, gas or other minerals and bears the proportional cost of such operations.
Workover / Recompletion – operations on a producing well to restore or increase production. A workover or recompletion may be performed to stimulate the well, remove sand or wax from the wellbore, to mechanically repair the well, or for other reasons.
CONTACT: Energy XXI
Stewart Lawrence
Vice President, Investor Relations and
Communications
713-351-3006
slawrence@energyxxi.com
Greg Smith
Director, Investor Relations
713-351-3149
gsmith@energyxxi.com
Cantor Fitzgerald Europe
Nominated Adviser: David Porter, Rick Thompson
Corporate Broking: Richard Redmayne
Tel: +44 (0) 20 7894 7000
Pelham Bell Pottinger
James Henderson
jhenderson@pelhambellpottinger.co.uk
Mark Antelme
mantelme@pelhambellpottinger.co.uk
+44 (0) 20 7861 3232
