Energy XXI Announces Fiscal Year-End Results and Details Fiscal 2015 Budget
Proved reserves grew 38% to 246 MMBOE
Reserve replacement rate exceeded 510%
Fourth-quarter production volumes ahead of company guidance
Fiscal 2014 oil production grew 6%
Fiscal 2015 capital program focused on oil development
Fiscal 2015 production expected to grow more than 30%, oil more than 40%
HOUSTON, Aug. 13, 2014 (GLOBE NEWSWIRE) -- Energy XXI (Nasdaq:EXXI) (AIM:EXXI) today announced fiscal fourth-quarter and full-year financial and operating results for the period ending June 30, 2014, and provided fiscal 2015 guidance.
Highlights
Fourth-quarter adjusted EBITDA was $194.3 million as production tops guidance, including a higher percentage of oil volumes
Proved reserves reach 246 MMBOE, lifting PV-10 to $7.6 billion, while 3P reserves grow to 432 MMBOE, with a PV-10 of $14.6 billion
Fiscal 2014 production rose 4% year over year, with oil up 6%, while fiscal 2015 production is expected to grow more than 37% at the guidance mid-point, and 48% for oil
Acquisition of EPL adds locations to the drilling inventory and provides significant operational synergies, including cost savings exceeding initial targets
Fiscal 2015 capital budget target of $875 million focused on development drilling, with 30 wells expected to be placed on production in fiscal 2015, compared with 17 wells in fiscal 2014
Fiscal 2014 Fourth-Quarter and Full-year Results
For the 2014 fiscal fourth quarter, adjusted earnings before non-recurring charges and interest, taxes, depreciation, depletion and amortization (adjusted EBITDA) was $194.3 million (a non-GAAP measure reconciled below) on revenues of $324.1 million. Volumes averaged 46,100 barrels of oil equivalent per day (BOE/d), 69 percent of which was oil. Due to non-recurring items associated with acquisition and divestiture activities, the company reported a net loss in the 2014 fiscal fourth quarter of $1.8 million, or $0.06 per diluted share.
For the fiscal year ended June 30, 2014, adjusted EBITDA was $754.2 million, compared to $768.9 million in fiscal 2013. Fiscal 2014 net income available for common shareholders was $47.6 million, or $0.64 per diluted share, on revenues of $1.2 billion. Net income available for common shareholders for fiscal 2013 was $150.6 million, or $1.86 per diluted share, on revenues of $1.2 billion. Fiscal 2014 production averaged 45,000 BOE/d, up four percent from production of 43,100 BOE/d the prior year, while the oil portion rose six percent, representing 67 percent of volumes compared with 66 percent in fiscal 2013.
Fiscal 2014 Year-end Reserves
The company's June 30, 2014 fiscal year-end proved reserves are estimated at 246 million barrels of oil equivalent (MMBOE), 75 percent liquids, up 38 percent from the June 30, 2013 year-end reserves, primarily due to the June 2014 acquisition of EPL Oil & Gas. Approximately 61 percent of proved reserves are proved developed. The tables set forth below provide additional information regarding the company's reserves and associated values.
Oil
NGL
Gas
Equivalent
PV10%
(MBBL)
(MBBL)
(MMCF)
(MBOE)
($000)1
Proved Developed Producing
87,609
3,368
132,106
112,994
3,362,983
Proved Developed Non-Producing
19,291
2,522
90,811
36,948
904,447
Proved Undeveloped
68,916
3,684
141,940
96,256
3,334,074
Proved Reserves
175,815
9,573
364,856
246,198
7,601,504
Probable
70,123
3,556
134,390
96,077
3,628,742
Proved+Probable
245,938
13,129
499,246
342,275
11,230,246
Possible
64,870
2,733
130,103
89,287
3,396,132
Proved+Probable+Possible
310,808
15,862
629,349
431,562
14,626,378
1Before tax, as of June 30, 2014, using prices of $103.63/per barrel of oil and $4.15/MCF ($96.75/per barrel of oil and $4.10/MMBTU base before differentials & BTU adjustment), based on the SEC-prescribed first-of-the-month average prices for the preceding 12 months
"Our reserves base has continued to grow, particularly the liquids portion, which has resulted in even higher increases in the reserves' value," Energy XXI Chairman and CEO John Schiller said. "In addition to growth from the EPL acquisition, we grew oil reserves organically, replacing 124 percent of our liquids production. We believe we can continue adding reserves organically as our teams apply technology to identify untapped reservoirs and increase recoveries of the oil in place."
Netherland, Sewell & Associates, Inc., independent oil and gas reserves consultants, audited the year-end reserves estimates. All of the company's reserves are in the United States Gulf of Mexico or Gulf Coast.
Capital Expenditures
The company's capital budget for fiscal year 2015, which began July 1, 2014, is estimated between $850 million and $950 million, with $875 million as the expected case and the higher end of the range primarily reliant on a successful test of the Lomond North well in the Highlander area. Development drilling, completions and recompletions account for approximately $475 million of planned spending, up approximately 26 percent from $378 million in fiscal 2014. This includes $38 million for non-operated projects in fiscal 2015, compared to $48 million in the prior year. The company currently is operating eight drilling rigs, and expects to complete 30 development wells in fiscal 2015, a 76 percent increase over fiscal 2014. The targeted $875 million budget would allow the company to operate an average of six rigs in fiscal 2015, with a majority of the capital being allocated to the first half of the year. Exploration drilling is budgeted at $33 million, down from approximately $112 million in the prior year. This includes $24 million for non-operated projects in fiscal 2015, compared to $42 million in the prior year. The bulk of the remaining capital budget for fiscal 2015 is allocated to facilities, general and administrative, land and abandonment costs. Fiscal 2014 capital spending totaled $814.9 million, including abandonment costs.
Guidance
First-quarter and full-year guidance is provided below.
Results
FY 2015 Annual
FY 2015 Q1
Estimated Production
High
Mid
Low
High
Mid
Low
Liquids, MBOD
47.0
44.5
42.0
43.0
41.5
40.0
Equivalent, MBOED
64.0
61.5
59.0
60.0
58.5
57.0
% Oil Liquids
73%
72%
71%
72%
71%
70%
Adjusted EBITDA @ Various Prices
$110 Bbl/$4 Mcf
1,359
1,258
1,157
313
298
283
$100 Bbl/$4 Mcf
1,187
1,096
1,004
274
261
247
$95 Bbl/$4 Mcf
1,101
1,015
928
255
242
229
Production and Operations Update
At the mid-point of guidance, fiscal 2015 production is expected to increase 37 percent over the prior year, with oil volumes 48 percent ahead of the prior year. July 2014 production approximated 59,000 BOE/d with 42,000 barrels per day of oil.
The company currently operates eight rigs in the shallow waters on the Gulf of Mexico shelf. Drilling is ongoing at West Delta 29/30 and 73, Main Pass, Ship Shoal 208/209, and South Timbalier.
In the non-operated joint venture with Freeport McMoRan Oil & Gas in the Inboard Lower Tertiary/Cretaceous trend, completion activity is ongoing at Lomond North in the Highlander area, located primarily in St. Martin Parish, Louisiana. The operator expects a flow test to be conducted in the second half of calendar year 2014.
Energy XXI was awarded 29 shallow-water blocks in the Central Gulf of Mexico lease sale #231 by the U.S. Bureau of Ocean Energy Management. Two additional blocks jointly bid with Fieldwood and Apache also were awarded.
ENERGY XXI (BERMUDA) LIMITED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In Thousands, except per share information)
(Unaudited)
As required under Regulation G of the Securities Exchange Act of 1934, provided below are reconciliations of net income to the following non-GAAP financial measure: Adjusted EBITDA. The company uses this non-GAAP measure as a key metric for the management of the company and to demonstrate the company's ability to internally fund capital expenditures and service debt.
Quarter Ended June 30,
Year Ended June 30,
2014
2013
2014
2013
Net Income (Loss) as Reported
$(1,815)
$62,053
$59,111
$162,081
Other expense
49,962
28,479
164,211
113,091
Depreciation, depletion and amortization
119,691
96,846
423,319
376,224
Income tax expense
6,530
21,215
57,089
86,633
EBITDA
174,368
208,593
703,730
738,029
Adjustments to EBITDA
Accretion of asset retirement obligation
9,366
7,828
30,183
30,885
Acquisition and divestiture expenses
10,610
--
20,268
--
Adjusted EBITDA
$194,344
$216,421
$754,181
$768,914
Adjusted EBITDA Per Common Share
Basic
$2.52
$2.76
$10.14
$9.73
Diluted
$2.51
$2.76
$10.13
$9.71
Weighted Average Number of Common Shares Outstanding
Basic
77,265
78,409
74,375
79,063
Diluted
77,326
78,477
74,445
79,166
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED BALANCE SHEETS
(In Thousands, except share information)
June 30,
ASSETS
2014
2013
Current Assets
Cash and cash equivalents
$145,806
$—
Accounts receivable
Oil and natural gas sales
167,075
132,521
Joint interest billings
12,898
9,505
Insurance and other
5,438
6,745
Prepaid expenses and other current assets
72,530
50,738
Deferred income taxes
52,587
Derivative financial instruments
1,425
38,389
Total Current Assets
457,759
237,898
Property and Equipment
Oil and natural gas properties - full cost method of accounting, including $1,165.7 million and $422.6 million of unevaluated properties not being amortized at June 30, 2014 and 2013, respectively
6,524,602
3,289,505
Other property and equipment
19,760
17,003
Total Property and Equipment, net of accumulated depreciation, depletion, amortization and impairment
6,544,362
3,306,508
Other Assets
Goodwill
327,235
—
Derivative financial instruments
3,035
21,926
Equity investments
40,643
12,799
Restricted cash
6,350
—
Other assets and debt issuance costs, net of accumulated amortization
57,394
32,580
Total Other Assets
434,657
67,305
Total Assets
$7,436,778
$3,611,711
LIABILITIES
Current Liabilities
Accounts payable
$415,718
$219,610
Accrued liabilities
133,526
105,192
Notes payable
21,967
22,524
Deferred income taxes
—
20,517
Asset retirement obligations
79,649
29,500
Derivative financial instruments
31,957
40
Current maturities of long-term debt
15,020
19,554
Total Current Liabilities
697,837
416,937
Long-term debt, less current maturities
3,744,624
1,350,491
Deferred income taxes
701,038
140,804
Asset retirement obligations
480,185
258,318
Derivative financial instruments
4,306
—
Other liabilities
10,958
7,915
Total Liabilities
5,638,948
2,174,465
Stockholders' Equity
Preferred stock, $0.001 par value, 7,500,000 shares authorized at June 30, 2014 and 2013, respectively
7.25% Convertible perpetual preferred stock, 8,000 shares issued and outstanding at June 30, 2014 and 2013, respectively
—
—
5.625% Convertible perpetual preferred stock, 812,760 and 813,188 shares issued and outstanding at June 30, 2014 and 2013, respectively
1
1
Common stock, $0.005 par value, 200,000,000 shares authorized and 93,719,570 and 79,425,473 shares issued and 93,719,570 and 76,485,910 shares outstanding at June 30, 2014 and 2013, respectively
468
397
Additional paid-in capital
1,837,462
1,512,311
Accumulated deficit
(19,626)
(29,352)
Accumulated other comprehensive (loss) income, net of income taxes
(20,475)
26,552
Treasury stock, at cost, 2,938,900 shares at June 30, 2013
—
(72,663)
Total Stockholders' Equity
1,797,830
1,437,246
Total Liabilities and Stockholders' Equity
$7,436,778
$3,611,711
See accompanying Notes to Consolidated Financial Statements
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, except per share information)
Year Ended June 30,
2014
2013
2012
Revenues
Crude oil sales
$1,091,223
$1,080,982
$1,186,631
Natural gas sales
139,502
127,863
116,772
Total Revenues
1,230,725
1,208,845
1,303,403
Costs and Expenses
Lease operating
365,747
337,163
310,815
Production taxes
5,427
5,246
7,261
Gathering and transportation
23,532
24,168
16,371
Depreciation, depletion and amortization
423,319
376,224
367,463
Accretion of asset retirement obligations
30,183
30,885
39,161
General and administrative expense
96,402
71,598
86,276
Loss (gain) on derivative financial instruments
5,704
1,756
(7,228)
Total Costs and Expenses
950,314
847,040
820,119
Operating Income
280,411
361,805
483,284
Other Income (Expense)
Loss from equity method investees
(4,781)
(6,397)
—
Other income - net
3,298
1,965
71
Interest expense
(162,728)
(108,659)
(108,882)
Total Other Expense
(164,211)
(113,091)
(108,811)
Income Before Income Taxes
116,200
248,714
374,473
Income Tax Expense
57,089
86,633
38,646
Net Income
59,111
162,081
335,827
Induced Conversion of Preferred Stock
—
—
6,068
Preferred Stock Dividends
11,489
11,496
13,028
Net Income Available for Common Stockholders
$47,622
$150,585
$316,731
Earnings per Share
Basic
$0.64
$1.90
$4.10
Diluted
$0.64
$1.86
$3.85
Weighted Average Number of Common Shares Outstanding
Basic
74,375
79,063
77,310
Diluted
74,445
87,263
87,208
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Year Ended June 30,
2014
2013
2012
Cash Flows From Operating Activities
Net income
$59,111
$162,081
$335,827
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation, depletion and amortization
423,319
376,224
367,463
Deferred income tax expense
53,448
73,761
38,796
Change in derivative financial instruments
Proceeds from sale of derivative instruments
—
760
66,522
Other – net
(1,793)
(27,516)
(52,155)
Accretion of asset retirement obligations
30,183
30,885
39,161
Loss from equity method investees
4,781
6,397
—
Amortization and write-off of debt issuance costs and other
13,774
6,898
7,559
Stock-based compensation
6,711
3,505
11,760
Changes in operating assets and liabilities
Accounts receivable
63,283
1,690
(4,995)
Prepaid expenses and other current assets
6,019
12,499
(15,890)
Settlement of asset retirement obligations
(57,391)
(41,939)
(14,990)
Accounts payable and accrued liabilities
(55,985)
32,903
6,456
Net Cash Provided by Operating Activities
545,460
638,148
785,514
Cash Flows from Investing Activities
Acquisitions, net of cash acquired
(849,641)
(161,164)
(6,401)
Capital expenditures
(788,676)
(816,105)
(570,670)
Insurance payments received
1,983
—
6,472
Change in equity method investments
(34,294)
(16,693)
(2,201)
Proceeds from the sale of properties
126,265
—
2,750
Transfer to restricted cash
(325)
—
—
Other
113
(41)
457
Net Cash Used in Investing Activities
(1,544,575)
(994,003)
(569,593)
Cash Flows from Financing Activities
Proceeds from the issuance of common and preferred stock, net of offering costs
3,994
7,021
9,839
Discount on convertible debt allocated to additional paid-in capital
63,432
—
—
Conversion of preferred stock to common stock
—
—
(6,040)
Repurchase of company common stock
(184,263)
(58,666)
—
Dividends to shareholders - common
(34,680)
(25,992)
—
Dividends to shareholders - preferred
(11,489)
(11,496)
(18,682)
Proceeds from long-term debt
3,420,873
1,576,551
896,717
Payments on long-term debt
(2,079,485)
(1,243,848)
(1,008,300)
Debt issuance costs
(33,461)
(4,805)
—
Other
—
3
(775)
Net Cash Provided by (Used in) Financing Activities
1,144,921
238,768
(127,241)
Net Increase (Decrease) in Cash and Cash Equivalents
145,806
(117,087)
88,680
Cash and Cash Equivalents, beginning of year
—
117,087
28,407
Cash and Cash Equivalents, end of year
$145,806
$—
$117,087
Quarter Ended
Operating Highlights
June 30, 2014
Mar. 31, 2014
Dec. 31, 2013
Sept. 30, 2013
June 30, 2013
(In Thousands, Except per Unit Amounts)
Operating revenues
Crude oil sales
$294,974
$254,641
$263,626
$290,965
$270,623
Natural gas sales
34,508
37,562
31,138
32,584
38,630
Hedge gain (loss)
(5,348)
(7,020)
2,052
1,043
5,072
Total revenues
324,134
285,183
296,816
324,592
314,325
Percent of operating revenues from crude oil
Prior to hedge gain (loss)
90%
87%
89%
90%
88%
Including hedge gain (loss)
89%
88%
88%
89%
87%
Operating expenses
Lease operating expense
Insurance expense
8,357
6,410
7,920
8,496
7,462
Workover and maintenance
14,408
17,797
19,690
14,586
15,622
Direct lease operating expense
79,806
59,417
66,179
62,681
59,371
Total lease operating expense
102,571
83,624
93,789
85,763
82,455
Production taxes
1,750
1,090
1,189
1,398
1,481
Gathering and transportation
6,509
5,700
5,978
5,345
5,668
DD&A
119,691
99,899
103,513
100,216
96,846
General and administrative
30,824
24,208
17,698
23,672
12,299
Other – net
8,112
5,861
13,147
8,767
3,829
Total operating expenses
269,457
220,382
235,314
225,161
202,578
Operating income
$54,677
$64,801
$61,502
$99,431
$111,747
Sales volumes per day
Natural gas (MMcf)
84.8
83.7
89.3
100.8
107.4
Crude oil (MBbls)
32.0
28.4
30.2
29.7
28.9
Total (MBOE)
46.1
42.3
45.1
46.6
46.8
Percent of sales volumes from crude oil
69%
67%
67%
64%
62%
Average sales price
Natural gas per Mcf
$4.47
$4.98
$3.79
$3.51
$3.95
Hedge gain (loss) per Mcf
(0.02)
(0.31)
0.42
0.30
0.23
Total natural gas per Mcf
$4.45
$4.67
$4.21
$3.81
$4.18
Crude oil per Bbl
$101.45
$99.71
$94.85
$106.31
$102.82
Hedge gain (loss) per Bbl
(1.78)
(1.83)
(0.50)
(0.63)
1.08
Total crude oil per Bbl
$99.67
$97.88
$94.35
$105.68
$103.90
Total hedge gain (loss) per BOE
$(1.28)
$(1.84)
$0.49
$0.24
$1.19
Operating revenues per BOE
$77.28
$74.85
$71.54
$75.78
$73.78
Operating expenses per BOE
Lease operating expense
Insurance expense
1.99
1.68
1.91
1.98
1.75
Workover and maintenance
3.44
4.67
4.75
3.41
3.67
Direct lease operating expense
19.03
15.59
15.95
14.63
13.94
Total lease operating expense per BOE
24.46
21.94
22.61
20.02
19.36
Production taxes
0.42
0.29
0.29
0.33
0.35
Gathering and transportation
1.55
1.50
1.44
1.25
1.33
DD&A
28.54
26.22
24.95
23.40
22.73
General and administrative
7.35
6.35
4.27
5.53
2.89
Other – net
1.93
1.54
3.17
2.05
0.90
Total operating expenses per BOE
64.25
57.84
56.73
52.58
47.56
Operating income per BOE
$13.03
$17.01
$14.81
$23.20
$26.22
Year Ended June 30,
Operating Highlights
2014
2013
2012
2011
2010
(In Thousands, Except per Unit Amounts)
Operating revenues
Crude oil sales
$1,104,206
$1,067,686
$1,186,193
$777,869
$383,928
Natural gas sales
135,792
112,753
88,608
101,815
69,399
Hedge gain (loss)
(9,273)
28,406
28,602
(20,314)
45,604
Total revenues
1,230,725
1,208,845
1,303,403
859,370
498,931
Percent of operating revenues from crude oil
Prior to hedge gain (loss)
89%
90%
93%
88%
85%
Including hedge gain (loss)
89%
89%
91%
84%
78%
Operating expenses
Lease operating expense
Insurance expense
31,183
32,737
28,521
27,876
27,603
Workover and maintenance
66,481
65,118
56,413
33,095
19,630
Direct lease operating expense
268,083
239,308
225,881
178,507
95,379
Total lease operating expense
365,747
337,163
310,815
239,478
142,612
Production taxes
5,427
5,246
7,261
3,336
4,217
Gathering and transportation
23,532
24,168
16,371
12,499
—
Depreciation, depletion and amortization
423,319
376,224
367,463
293,479
181,640
General and administrative
96,402
71,598
86,276
75,091
49,667
Other – net
35,887
32,641
31,933
26,564
18,748
Total operating expenses
950,314
847,040
820,119
650,447
396,884
Operating income
$280,411
$361,805
$483,284
$208,923
$102,047
Sales volumes per day
Natural gas (MMcf)
89.7
88.6
81.5
67.2
42.6
Crude oil (MBbls)
30.1
28.3
30.5
23.4
14.7
Total (MBOE)
45.0
43.1
44.1
34.6
21.8
Percent of sales volumes from crude oil
67%
66%
69%
68%
67%
Average sales price
Natural gas per Mcf
$4.15
$3.48
$2.97
$4.15
$4.47
Hedge gain per Mcf
0.11
0.47
0.94
1.54
2.68
Total natural gas per Mcf
$4.26
$3.95
$3.91
$5.69
$7.15
Crude oil per Bbl
$100.59
$103.48
$106.17
$90.95
$71.73
Hedge gain (loss) per Bbl
(1.18)
1.29
0.04
(6.80)
0.75
Total crude oil per Bbl
$99.41
$104.77
$106.21
$84.15
$72.48
Total hedge gain (loss) per BOE
$(0.56)
$1.81
$1.77
$(1.61)
$5.74
Operating revenues per BOE
$74.88
$76.95
$80.74
$67.98
$62.83
Operating expenses per BOE
Lease operating expense
Insurance expense
1.90
2.08
1.77
2.21
3.48
Workover and maintenance
4.04
4.15
3.49
2.62
2.47
Direct lease operating expense
16.31
15.23
13.99
14.12
12.01
Total lease operating expense per BOE
22.25
21.46
19.25
18.95
17.96
Production taxes
0.33
0.33
0.45
0.26
0.53
Gathering and transportation
1.43
1.54
1.01
0.98
—
Depreciation, depletion and amortization
25.75
23.95
22.76
23.22
22.87
General and administrative
5.87
4.56
5.34
5.94
6.25
Other – net
2.19
2.08
1.98
2.10
2.36
Total operating expenses per BOE
57.82
53.92
50.79
51.45
49.97
Operating income per BOE
$17.06
$23.03
$29.95
$16.53
$12.86
The supplementary data presented reflects information for all of our oil and gas producing activities. Costs incurred for oil and gas property acquisition, exploration and development activities are as follows:
Year Ended June 30,
2014
2013
2012
(In Thousands)
Property acquisitions
Proved
$2,046,879
$108,825
$6,401
Unevaluated
924,882
52,339
—
Exploration costs
153,136
168,512
183,397
Development costs
632,262
633,868
327,360
Estimated quantities of proved domestic oil and gas reserves and changes in quantities of proved developed and undeveloped reserves in thousands of barrels ("MBbls") and millions of cubic feet ("MMcf") for each of the periods indicated were as follows:
Crude Oil
Natural Gas
Total
(MBbls)
(MMcf)
(MBOE)
Proved reserves at June 30, 2011
77,206
236,316
116,592
Production
(11,172)
(29,824)
(16,143)
Extensions and discoveries
11,444
27,821
16,081
Revisions of previous estimates
9,098
(23,281)
5,217
Reclassification of proved undeveloped
(1,783)
(2,042)
(2,123)
Proved reserves at June 30, 2012
84,793
208,990
119,624
Production
(10,318)
(32,354)
(15,710)
Extensions and discoveries
40,690
40,714
47,476
Revisions of previous estimates
14,380
7,903
15,697
Reclassification of proved undeveloped
(1,123)
(1,755)
(1,416)
Purchases of reserves
5,225
45,623
12,829
Proved reserves at June 30, 2013
133,647
269,121
178,500
Production
(10,978)
(32,754)
(16,437)
Extensions and discoveries
17,141
19,703
20,424
Revisions of previous estimates
(3,567)
(29,822)
(8,537)
Sales of reserves
(4,159)
(3,378)
(4,722)
Purchases of reserves
53,305
141,986
76,970
Proved reserves at June 30, 2014
185,389
364,856
246,198
Proved developed reserves
June 30, 2011
59,234
134,024
81,572
June 30, 2012
63,308
110,310
81,693
June 30, 2013
80,223
175,623
109,493
June 30, 2014
112,789
222,916
149,942
Proved undeveloped reserves
June 30, 2011
17,972
102,292
35,020
June 30, 2012
21,485
98,680
37,931
June 30, 2013
53,424
93,498
69,007
June 30, 2014
72,600
141,940
96,256
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, our ability to integrate acquisitions, 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.
Competent Person Disclosure
The technical information contained in this announcement relating to resources and operations adheres to the standard set by the Society of Petroleum Engineers ("SPE"). Phil Kerig, Vice President of Corporate Development is the qualified person who has reviewed and approved the technical information contained in this announcement.
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.
GLOSSARY
Reserves:
Proved Oil and Gas Reserves -- Those quantities of crude oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible -- from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations -- prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time. This definition has been abbreviated from the definition of "Proved oil and gas reserves" contained in Rule 4-10(a)(22) of SEC Regulation S-X.
Proved Developed Reserves -- Reserves are categorized as proved developed if they are expected to be recovered from existing wells.
Probable Reserves -- Those additional reserves that are less certain to be recovered than proved reserves but more certain to be recovered than possible reserves. This definition has been abbreviated from the applicable definition contained in Rule 4-10(a)(18) of SEC Regulation S-X.
Possible Reserves -- Those additional reserves that are less certain to be recovered than probable reserves. This definition has been abbreviated from the applicable definition contained in Rule 4-10(a)(17) of Regulation S-X.
Other terms:
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.
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: ENQUIRIES OF THE COMPANY
Energy XXI
Stewart Lawrence
Senior Vice President, Investor Relations and
Communications
713-351-3006
slawrence@energyxxi.com
Greg Smith
Vice President, 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
