* Volumes Rise 80% From Prior-Year Third Quarter * Revenues and EBITDA More Than Double to New Record Highs * Exploration Program Accelerates and Logs Success
HOUSTON, April 30, 2008 (PRIME NEWSWIRE) -- Energy XXI (Bermuda) Limited (Nasdaq:EXXI) (LSE:EXXI) (LSE:EXXS) today announced fiscal third-quarter financial and operating results for the period ended March 31, 2008.
"Our fiscal third-quarter operating results reflect the continued success of our acquire-and-exploit strategy," Energy XXI Chairman and CEO John Schiller said. "Energy XXI remains on track to deliver a solid performance from our core producing properties during our 2008 fiscal year ending June 30, with the potential to significantly boost reserves through high-impact exploration."
For the 2008 fiscal third quarter, revenues were $167.1 million and earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) totaled $117.5 million, more than double the 2007 fiscal third-quarter revenues of $77.6 million and EBITDA of $54.5 million. Net income was $10.3 million, or $0.12 per diluted share, which included a loss of $2.7 million, or $0.03 per diluted share, for non-cash mark-to-market charges on open oil and gas derivative contracts. In the 2007 fiscal third quarter, net income was $9.6 million, or $0.11 per diluted share, which included a mark-to-market gain of $1.6 million, or $0.02 per diluted share, for open oil and gas derivative contracts.
Net cash provided by operating activities totaled $112.5 million for the 2008 fiscal third quarter, compared with $76.2 million in the 2007 fiscal third quarter. Discretionary cash flow was $96.2 million in the 2008 fiscal third quarter, compared with $47.5 million in the 2007 fiscal third quarter.
For the 2008 fiscal third quarter, sales volumes averaged 26,100 barrels of oil equivalent per day (BOE/d), compared with 14,500 BOE/d in the 2007 fiscal third quarter. The net realized price received for the company's production in the 2008 fiscal third quarter averaged $70.33 per BOE, including an $8.92 per BOE reduction due to hedging, compared with a net realized price of $59.54 per BOE, including a $7.95 per BOE contribution from hedging, in the 2007 fiscal third quarter.
CAPITAL EXPENDITURES
During the 2008 fiscal third quarter, capital expenditures totaled $62.8 million. The fiscal-year 2008 capital budget, excluding acquisitions, is expected to approximate $300 million, which reflects about $40 million of added spending primarily associated with incremental exploration activity and development costs associated with successful exploration.
3RD QUARTER OPERATIONAL HIGHLIGHTS
During the fiscal third quarter, Energy XXI continued to implement its exploration and development program, details of which are provided in the attached Operations Report.
"The last few months have been encouraging for us from an operations standpoint," Energy XXI President and Chief Operating Officer Steve Weyel said. "We initiated drilling and recompletion work at the Main Pass properties acquired last June, with good results that should positively impact our fourth quarter. We drilled a discovery at our Lake Salvador project onshore Louisiana, helping validate the extensive pre-drill work we have done in the area. We side-tracked and resumed drilling at the high-potential Cote de Mer prospect. More recently, we gained access to 425,000 gross acres across the ultra-deep prospect trend on the shallow-water Gulf of Mexico shelf, including the re-entry of the Blackbeard West wellbore. While production volumes continued to be frustrated by infrastructure outages during the quarter, our operated properties have performed ahead of our expectations."
CONFERENCE CALL TOMORROW AT 9 A.M. CDT, 3 P.M. LONDON TIME
Energy XXI will host its third-quarter conference call tomorrow, Thursday, May 1, 2008, at 9 a.m. CDT (3 p.m. London time). The dial-in number is 1 (913) 312-0715 in the U.S. and 08081 011 402 in the U.K., and the confirmation code is 4499493. For complete instructions on how to actively participate in the conference call, or to listen to the live audio webcast or a replay, please refer to www.energyxxi.com.
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.
Competent Person Disclosure
The technical information contained in this announcement relating to operations (including information in the attached Operations Report) adheres to the standard set by the Society of Petroleum Engineers. Tom O'Donnell, Vice President of Corporate Development, a registered Petroleum Engineer, 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 primarily located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore. Collins Stewart Europe Limited and Tristone Capital Limited are Energy XXI listing brokers in the United Kingdom. In the United States, BMO Capital Markets, Collins Stewart, Dahlman Rose & Co., Jefferies & Company, Natixis Bleichroeder and Sterne Agee & Leach, Inc. are market makers. To learn more, visit the Energy XXI website at www.energyxxi.com.
The Energy XXI logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=3587
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED BALANCE SHEETS
(In Thousands, except share information)
March 31, June 30,
2008 2007
----------------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $3,066 $19,784
Accounts receivable
Oil and natural gas sales 95,613 55,763
Joint interest billings 25,488 14,377
Insurance and other 2,548 958
Prepaid expenses and other current assets 17,691 21,870
Deferred income taxes 30,258 --
Royalty deposits 4,548 2,175
Derivative financial instruments -- 17,131
----------------------
Total Current Assets 179,212 132,058
----------------------
Property and Equipment, net of accumulated
depreciation, depletion, and amortization
Oil and natural gas properties - full cost
method of accounting 1,529,845 1,491,685
Other property and equipment 8,494 3,097
----------------------
Total Property and Equipment 1,538,339 1,494,782
----------------------
Other Assets
Debt issuance costs, net of accumulated
amortization 17,973 20,986
Deferred income taxes 2,724 --
Derivative financial instruments -- 616
----------------------
Total Other Assets 20,697 21,602
----------------------
Total Assets $1,738,248 $1,648,442
======================
LIABILITIES
Current Liabilities
Accounts payable $68,592 $79,563
Advances from joint interest partners 5,053 2,026
Accrued liabilities 57,469 33,459
Deferred income taxes -- 1,044
Derivative financial instruments 95,268 1,480
Note payable 3,323 --
Current maturities of long-term debt 4,188 5,508
----------------------
Total current liabilities 233,893 123,080
Long-term debt, less current maturities 1,066,377 1,045,511
Deferred income taxes -- 14,788
Asset retirement obligations 64,304 63,364
Derivative financial instruments 68,435 4,573
----------------------
Total Liabilities 1,433,009 1,251,316
----------------------
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.01 par value, 2,500,000
shares authorized and no shares issued at
March 31, 2008 and June 30, 2007 -- --
Common stock, $0.001 par value, 400,000,000
shares authorized and 84,511,906 and
84,203,444 issued and outstanding at
March 31, 2008 and June 30, 2007,
respectively 84 84
Additional paid-in capital 363,285 363,206
Retained earnings 49,721 31,072
Accumulated other comprehensive income
(loss), net of tax (107,851) 2,764
----------------------
Total Stockholders' Equity 305,239 397,126
----------------------
Total Liabilities and Stockholders'
Equity $1,738,248 $1,648,442
======================
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, except per share information)
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------------------
2008 2007 2008 2007
--------------------------------------
Revenues
Oil sales $103,627 $42,777 $284,522 $121,882
Natural gas sales 63,510 34,831 179,948 100,686
--------------------------------------
Total Revenues 167,137 77,608 464,470 222,568
--------------------------------------
Costs and Expenses
Lease operating expense 38,342 16,351 103,078 43,819
Production taxes 1,755 1,691 4,987 2,909
Depreciation, depletion and
amortization 75,268 28,600 223,927 88,055
Accretion of asset retirement
obligation 1,911 877 5,660 2,619
General and administrative
expense 4,912 5,733 16,327 16,324
Loss (gain) on derivative
financial instruments 2,700 (1,552) 2,656 (3,110)
--------------------------------------
Total Costs and Expenses 124,888 51,700 356,635 150,616
--------------------------------------
Operating Income 42,249 25,908 107,835 71,952
--------------------------------------
Other Income (Expense)
Interest income 348 307 1,249 1,599
Interest expense (26,058) (12,646) (79,688) (39,653)
--------------------------------------
Total Other Income (Expense) (25,710) (12,339) (78,439) (38,054)
--------------------------------------
Income Before Income Taxes 16,539 13,569 29,396 33,898
Provision for Income Taxes 6,252 3,988 10,747 11,976
--------------------------------------
Net Income $10,287 $9,581 $18,649 $21,922
======================================
Earnings Per Share
Basic $0.12 $0.11 $0.22 $0.26
Diluted $0.12 $0.11 $0.22 $0.26
Weighted Average Number of
Common Shares Outstanding
Basic 84,141 84,049 84,139 83,893
Diluted 84,141 84,049 85,259 83,893
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------------------
2008 2007 2008 2007
--------------------------------------
Cash Flows From Operating
Activities
Net income $10,287 $9,581 $18,649 $21,922
Adjustments to reconcile net
income to net cash provided
by (used in) operating
activities:
Deferred income tax expense 6,252 3,988 10,747 11,976
Change in derivative
financial instruments 1,319 4,114 811 10,505
Accretion of asset retirement
obligations 1,911 877 5,660 2,619
Depletion, depreciation, and
amortization 75,268 28,600 223,927 88,055
Amortization and write-off of
debt issuance costs 1,114 325 3,688 5,998
Common stock issued to
Directors for services -- -- 67 --
Changes in operating assets
and liabilities
Accounts receivable (14,247) 28,769 (48,142) 35,807
Prepaid expenses and other
current assets 20,676 (13,334) 1,806 (39,501)
Accounts payable and other
liabilities 9,901 13,326 20,122 21,385
--------------------------------------
Net Cash Provided by
Operating Activities 112,481 76,246 237,335 158,766
--------------------------------------
Cash Flows from Investing
Activities
Acquisitions (8,569) -- (38,935) (302,481)
Capital expenditures (62,784) (130,587) (234,002) (250,951)
Proceeds from the sale of oil
and natural gas properties -- -- -- 1,400
Other (102) 573 (135) 1,333
--------------------------------------
Net Cash Used in Investing
Activities (71,455) (130,014) (273,072) (550,699)
--------------------------------------
Cash Flows from Financing
Activities
Proceeds from the issuance of
common stock - net -- 108 32 13,167
Proceeds from long-term debt 21,000 65,000 204,135 364,000
Payments on long-term debt (69,024) (10,000) (180,159) (24,625)
Payments on put financing (1,419) (2,011) (4,294) (7,030)
Debt issuance costs -- -- (675) (4,754)
Other (17) (407) (20) (1,037)
--------------------------------------
Net Cash Provided by (Used
in) Financing Activities (49,460) 52,690 19,019 339,721
--------------------------------------
Net Increase (Decrease) in Cash
and Cash Equivalents (8,434) (1,078) (16,718) (52,212)
Cash and Cash Equivalents,
beginning of period 11,500 11,255 19,784 62,389
Cash and Cash Equivalents, --------------------------------------
end of period $3,066 $10,177 $3,066 $10,177
======================================
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED OPERATING RESULTS
(In Thousands, except per unit amounts)(Unaudited)
Twelve
Quarter Ended Months
----------------------------------------------- Ended
Mar. 31, June 30, Sept. 30, Dec. 31, Mar. 31, Mar. 31,
2007 2007 2007 2007 2008 2008
---------------------------------------------------------
Operating
Revenues $77,608 $118,716 $143,608 $153,725 $167,137 $583,186
---------------------------------------------------------
Operating
Expenses
Lease
operating
expense
Insurance
expense 4,866 2,489 4,832 4,812 4,642 16,775
Workover
and
maintenance 1,910 5,532 5,720 4,489 5,447 21,188
Direct
lease
operating
expense 9,575 17,145 20,141 24,742 28,253 90,281
---------------------------------------------------------
Total lease
operating
expense 16,351 25,166 30,693 34,043 38,342 128,244
Production
taxes 1,691 686 1,960 1,272 1,755 5,673
DD&A 28,600 57,873 73,253 75,406 75,268 281,800
General and
administra-
tive 5,733 10,183 5,771 5,644 4,912 26,510
Other - net (675) 1,545 2,802 903 4,611 9,861
---------------------------------------------------------
Total
operating
expenses 51,700 95,453 114,479 117,268 124,888 452,088
---------------------------------------------------------
Operating
Income $25,908 $23,263 $29,129 $36,457 $42,249 $131,098
=========================================================
Sales
Volumes per
Day
Natural gas
(MMcf) 42.1 60.0 83.5 78.1 73.3 73.7
Crude oil
(MBbls) 7.5 10.9 12.3 13.0 13.9 12.5
Total
(MBOE) 14.5 20.9 26.2 26.0 26.1 24.8
Average
Sales Price
Natural gas
per Mcf $7.77 $7.78 $5.83 $7.48 $9.25 $7.51
Hedge gain
per Mcf 1.43 0.80 1.46 0.93 0.28 0.89
---------------------------------------------------------
Total
natural
gas per
Mcf $9.20 $8.58 $7.29 $8.41 $9.53 $8.40
=========================================================
Crude oil
per Bbl $56.24 $67.46 $79.19 $90.71 $100.10 $85.44
Hedge gain
(loss) per
Bbl 7.36 5.21 (1.52) (12.68) (18.20) (7.59)
---------------------------------------------------------
Total
crude oil
per Bbl $63.60 $72.67 $77.67 $78.03 $81.90 $77.85
=========================================================
Hedge gain
(loss)
per BOE $7.95 $5.03 $3.94 $(3.56) $(8.92) (1.18)
=========================================================
Operating
Revenues
per BOE $59.54 $62.53 $59.63 $64.24 $70.33 $64.25
---------------------------------------------------------
Operating
Expenses
per BOE
Lease
operating
expense
Insurance
expense 3.73 1.31 2.00 2.01 1.95 1.85
Workover
and
maintenance 1.47 2.91 2.38 1.88 2.29 2.33
Direct
lease
operating
expense 7.34 9.03 8.36 10.34 11.89 9.95
---------------------------------------------------------
Total lease
operating
expense 12.54 13.25 12.74 14.23 16.13 14.13
Production
taxes 1.30 0.36 0.81 0.53 0.74 0.63
DD&A 21.94 30.48 30.42 31.51 31.67 31.05
General and
administra-
tive 4.40 5.37 2.40 2.36 2.07 2.92
Other - net (0.52) 0.82 1.16 0.38 1.94 1.08
---------------------------------------------------------
Total
operating
expenses 39.66 50.28 47.53 49.01 52.55 49.81
---------------------------------------------------------
Operating
Income per
BOE $19.88 $12.25 $12.10 $15.23 $17.78 $14.44
=========================================================
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 measures: EBITDA and discretionary cash flow. The
company uses these non-GAAP measures as key metrics for the management
of the company and to demonstrate the company's ability to internally
fund capital expenditures and service debt. The non-GAAP measures are
useful in comparisons of oil and gas exploration and production
companies as they exclude non-operating fluctuations in assets and
liabilities.
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------------------
2008 2007 2008 2007
--------------------------------------
Net Income as Reported $10,287 $9,581 $18,649 $21,922
Total other (income) expense 25,710 12,339 78,439 38,054
Depreciation, depletion and
amortization 75,268 28,600 223,927 88,055
Provision for income taxes 6,252 3,988 10,747 11,976
--------------------------------------
EBITDA $117,517 $54,508 $331,762 $160,007
======================================
EBITDA Per Share
Basic $1.40 $0.65 $3.94 $1.91
Diluted $1.40 $0.65 $3.89 $1.91
Weighted Average Number of
Common Shares Outstanding
Basic 84,141 84,049 84,139 83,893
Diluted 84,141 84,049 85,259 83,893
---------------------------------------------------------------------
Net Income as Reported $10,287 $9,581 $18,649 $21,922
Deferred income tax expense 6,252 3,988 10,747 11,976
Change in derivative financial
instruments 1,319 4,114 811 10,505
Accretion of asset retirement
obligations 1,911 877 5,660 2,619
Depletion, depreciation, and
amortization 75,268 28,600 223,927 88,055
Amortization and write-off of
debt issuance costs 1,114 325 3,688 5,998
Common stock issued to
Directors for services -- -- 67 --
--------------------------------------
Discretionary Cash Flow $96,151 $47,485 $263,549 $141,075
======================================
ENERGY XXI (BERMUDA) LIMITED
SUMMARY OF HEDGE POSITIONS AS OF APRIL 30, 2008
Natural Gas (000 MMBTU)
---------------------------------------------------------
Average
--------------------
Qtr Instrument Volume Sub Floor Cap
--- ---------- ------ --- ----- ---
Q408 Swaps 1,150 8.86 8.86
3 Way Collars 460 5.67 7.41 10.10
Collars 264 7.96 10.49
Puts 40 8.00
Put Spreads 450 6.00 8.00
Q109 Swaps 3,020 8.90 8.90
3 Way Collars 1,340 5.66 7.38 10.11
Collars 744 7.97 10.46
Puts 120 8.00
Put Spreads 1,280 6.00 8.00
Q209 Swaps 2,450 8.82 8.82
3 Way Collars 1,250 5.63 7.34 10.12
Collars 685 7.97 10.43
Puts 110 8.00
Put Spreads 1,170 6.00 8.00
Q309 Swaps 2,080 8.46 8.46
3 Way Collars 1,040 6.00 8.09 9.97
Collars 302 7.72 9.96
Q409 Swaps 1,830 8.46 8.46
3 Way Collars 930 6.00 8.10 9.96
Collars 289 7.73 9.91
Q110 Swaps 1,770 8.47 8.47
3 Way Collars 820 6.00 8.11 9.96
Collars 137 8.00 8.85
Q210 Swaps 1,580 8.47 8.47
3 Way Collars 740 6.00 8.12 9.95
Collars 137 8.00 8.85
Q310 Swaps 1,700 8.12 8.12
3 Way Collars 490 6.00 8.12 9.95
Q410 Swaps 1,500 8.12 8.12
3 Way Collars 460 6.00 8.20 9.92
Q111 Swaps 1,380 8.12 8.12
3 Way Collars 440 6.00 8.20 9.92
Q211 Swaps 1,280 8.12 8.12
3 Way Collars 420 6.00 8.21 9.91
Crude Oil (000 BBL)
-----------------------------------------------------------
Average
----------------------
Qtr Instrument Volume Sub Floor Cap
--- ---------- ------ --- ----- ---
Q408 Swaps 217 79.66 79.66
3 Way Collars 66 54.09 67.21 78.61
Collars 60 65.47 76.36
Puts 10 60.00
Q109 Swaps 676 82.60 82.60
3 Way Collars 205 54.12 67.44 78.99
Collars 55 60.00 78.00
Puts 27 60.00
Q209 Swaps 472 78.88 78.88
3 Way Collars 184 54.02 67.40 79.09
Collars 162 70.28 96.67
Puts 26 60.00
Q309 Swaps 325 70.85 70.85
3 Way Collars 170 53.94 67.24 78.94
Collars 233 76.74 107.25
Q409 Swaps 303 70.86 70.86
3 Way Collars 137 53.69 67.37 79.66
Collars 220 76.67 107.17
Q110 Swaps 277 70.97 70.97
3 Way Collars 111 53.38 67.52 80.49
Collars 211 76.58 107.07
Q210 Swaps 257 71.01 71.01
3 Way Collars 87 52.93 67.70 81.64
Collars 201 76.51 106.99
Q310 Swaps 238 70.86 70.86
3 Way Collars 68 52.35 67.35 82.05
Collars 190 76.53 104.76
Q410 Swaps 215 70.89 70.89
3 Way Collars 60 52.00 67.00 82.04
Collars 174 76.49 104.68
Q111 Swaps 193 70.93 70.93
3 Way Collars 52 51.54 66.54 82.03
Collars 156 76.48 104.66
Q211 Swaps 171 70.96 70.96
3 Way Collars 45 50.95 65.95 82.02
Collars 146 76.50 104.69
Includes production for June 2008 and later; Quarters based on June 30
fiscal year-end
All prices are weight-averaged by contract volume
FY 2008 3rd Quarter Operations Report
---------------------------------------------------------------------
EXXI Fiscal 3rd Quarter 2008 Drilling Results
---------------------------------------------------------------------
Exploration Development Total
---------------------------------------------------------------------
Gross Net Gross Net Gross Net
---------------------------------------------------------------------
Operated
---------------------------------------------------------------------
Oil 0 0 1 1 1 1
---------------------------------------------------------------------
Gas 0 0 0 0 0 0
---------------------------------------------------------------------
Dry 0 0 0 0 0 0
---------------------------------------------------------------------
Non-Operated
---------------------------------------------------------------------
Oil 0 0 0 0 0 0
---------------------------------------------------------------------
Gas 2 0.85 0 0 2 0.85
---------------------------------------------------------------------
Dry 2 0.64 0 0 2 0.64
---------------------------------------------------------------------
Total 4 1.49 1 1 5 2.49
---------------------------------------------------------------------
---------------------------------------------------------------------
Exploration Development Total
---------------------------------------------------------------------
Success Rates 50% 57% 100% 100% 60% 74%
---------------------------------------------------------------------
Exploration Development Total
---------------------------------------------------------------------
Onshore 4 0 1
---------------------------------------------------------------------
Offshore 0 1 4
---------------------------------------------------------------------
Total 4 1 5
---------------------------------------------------------------------
GULF OF MEXICO SHELF HIGHLIGHTS
South Timbalier 21 (100% WI)
South Timbalier 21 net production averaged 8,549 BOE/d during the fiscal third quarter, an increase of almost 1,400 BOE/d net from the previous quarter.
After working through minor facility obstacles, the Beaujolais (ST 21 #138) well's production was stabilized by mid-February and production has been averaging 1,700 BOE/d net from the D-15 and D-18 sands.
The Sangria (ST 27 #D-13ST2) development well commenced production during February at a peak rate of 1,200 BOE/d net from the D-7 Stray sand.
The #135 well was recompleted through tubing to the D-10 sand during February and initially produced at a rate of 490 BOE/d net.
The #75ST well was recompleted through tubing to the S-4A sand during January and initially produced at a rate of 570 BOE/d net.
The Cabernet (#89 ST) well was recently reworked to restore production from the lower D-7 sand. The initial net rate was 334 BOE/d.
Acquired Pogo Properties
The Gulf of Mexico shelf properties acquired in June 2007 from Pogo Producing Company averaged 9,598 BOE/d net during the fiscal third quarter. After completing MMS compliance work and getting the properties released from MMS probation in the previous quarter, the first rig program was initiated in the third quarter, along with some non-rig workovers. Activity in the field temporarily interrupted some production volumes.
The Ensco 82 rig arrived at Main Pass 61-B in early February. The recompletion of well #B-1 was successful, resulting in 600 BOE/d net of new production starting late March. The #B-6 development well was spud in late March and is expected to come online in May. Also in the fiscal third quarter, 550 BOE/d net was added at MP 73 as a result of a successful non-rig workover.
The Ensco 82 rig will move to the Main Pass 61-A platform in May to drill and complete the MP 60 #A-9 exploratory well and change out tubing in the MP 62 #A-4. This rig is then expected to spud the Main Pass 147 #1 development well near the end of June. Two additional rigs are expected to arrive in May and June to begin well work at MP 61-C and MP 126.
In Lease Sale 206, Energy XXI was high bidder on five blocks adjacent to the South Pass 49 field. Following facility upgrades, including replacement of separation and compression units, gas lift optimization and acid stimulations on four D-69/D-70 sand wells are planned for South Pass 49.
SOUTH LOUISIANA ONSHORE HIGHLIGHTS
Eugene Island * SL 17695 #1 (35% WI) (Comus Prospect), Iberia Parish - spud 12/22/07 with a proposed TD of 13,800'; primary objective wet; secondary target zone, the Cris I sand, deemed commercial; awaiting completion rig. Cote de Mer * McIlhenny #1 (35% WI) (Cote de Mer Prospect), Vermillion Parish - Coastal rig 21 arrived March 13th; sidetracked at approximately 13,000'; preparing to run casing to 15,685' MD; proposed TD is 21,000'. Kaplan NW * Green & Broussard #1 (100% WI) (Kaplan Prospect), Vermillian Parish - Spud 3/28/08; drilling at about 6,300' MD toward proposed TD of 18,500'. Venus * SL 19515 #1 (50% WI) (Venus Prospect), Cameron Parish - Spud 4/30/08; beginning to drill toward proposed TD of 16,000'.
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.
Field -- an area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.
FTP -- flowing tubing pressure.
MBOE -- thousand barrels of oil equivalent.
MMBOE -- million barrels of oil equivalent.
MD -- measured depth.
Net Pay -- cumulative hydrocarbon-bearing formations.
Spud -- to begin drilling a well.
TD -- target total depth of a well.
TD'd -- to finish drilling a well.
TVD -- total vertical depth.
Workover -- operations on a producing well to restore or increase production. A workover may be performed to stimulate the well, remove sand or wax from the wellbore, to mechanically repair the well, or for other reasons.