HOUSTON, Feb. 9, 2009 (GLOBE NEWSWIRE) -- Energy XXI (Bermuda) Limited (Nasdaq:EXXI) (AIM:EXXI) today announced fiscal second-quarter results for the period ended Dec. 31, 2008, which reflect a non-cash ceiling test impairment resulting from the steep drop in oil and natural gas prices.
"Current industry conditions are very challenging, as oil and gas prices have plunged while operating costs have been slow to adjust downward, resulting in a non-cash write-down of the carrying value of our reserves," Energy XXI Chairman and CEO John Schiller said. "Operationally, Energy XXI has made solid progress restoring production volumes in the wake of the recent hurricanes, and our exploration program continues to offer significant reserve growth potential. Financially, our sizable cash position and credit facility, along with hedge-protected cash flow, help ensure access to working capital, and we are working diligently to reduce costs and minimize future capital expenditures with the intention of paying down debt."
For the 2009 fiscal second quarter, Energy XXI reported net cash provided by operating activities of $31.4 million and earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) of $68.8 million, compared with $48.2 million and $111.9 million, respectively, in the 2008 fiscal second quarter.
Including a $459.1 million pre-tax ceiling test impairment ($415.5 million, or $2.88 per share, after tax), the company reported a 2009 fiscal second-quarter net loss of $429.2 million, or $2.98 per share, on revenues of $106.9 million and production of 19,200 barrels of oil equivalent per day (BOE/d). In the 2008 fiscal second quarter, the company had net income of $6.5 million, or $.07 per diluted share, on revenues of $153.7 million and production of 26,000 BOE/d. The net realized price received for the company's production in the 2009 fiscal second quarter averaged $60.57 per BOE, compared with $64.24 per BOE in the 2008 fiscal second quarter.
CAPITAL EXPENDITURES
During the 2009 fiscal second quarter, capital expenditures totaled $101.8 million, with $43.0 million in exploration, $58.5 million in development and $0.3 million in other investments. The company expects to significantly reduce activity and expenditures during the second half of its fiscal year, remaining within the previously announced fiscal 2009 range of $240 million to $260 million, excluding hurricane-related spending, which is largely reimbursable through insurance recoveries.
PRODUCTION UPDATE
Energy XXI production volumes continue to be curtailed by damage inflicted by Hurricanes Gustav and Ike. In addition to a 2,000 BOE/d long-term reduction due to the loss of facilities serving two non-operated fields, approximately 2,000 BOE/d remains off-line awaiting repair of third-party-operated pipelines. The company's current net production approximates 21,000 BOE/d.
EXPLORATION AND DEVELOPMENT ACTIVITY
Energy XXI continues drilling the E.A. McIlhenny #1 well on the Cote de Mer prospect, located in Vermilion Parish, Louisiana. The well has been drilled to a depth of 21,730 feet, with a target depth of 22,300 feet. Logging efforts to date indicate that the well has encountered at least 60 net feet of natural gas pay in two zones within the targeted Cris-A Massive sands. Based on these preliminary results, the company's estimate of gross reserves potential within the drilled interval is between 20 billion and 40 billion cubic feet. Continued drilling could add significantly to the discovery's size. Energy XXI holds a 33 percent working interest (WI) and a 24 percent net revenue interest (NRI) in the prospect.
The Ammazzo deep gas exploratory prospect (16 percent WI, 13 percent NRI), which spud Nov. 22, 2008, has set casing to 11,089 feet and is drilling ahead towards a proposed total depth of 24,500 feet. The Ammazzo prospect is located in 25 feet of water offshore Louisiana, approximately 15 miles south of the Flatrock and JB Mountain discoveries where operator McMoRan has successfully drilled to the targeted Rob-L, Operc and Gyro sands in the Middle Miocene.
As previously reported, the South Timbalier Block 168 No. 1 exploratory well, targeting the Blackbeard West prospect (20 percent WI, 16 percent NRI) in 70 feet of water offshore Louisiana, was drilled to 32,997 feet. Energy XXI and its partners have formed an engineering team to design a completion plan and procure long-lead-time equipment necessary to conduct a production test of four potential hydrocarbon-bearing zones logged in the wellbore. Additional drilling opportunities on the flanks of the structure and on other acreage in the ultra-deep trend are being reviewed.
At the South Timbalier 21 field, net production averaged 4,939 BOE/d, up from fiscal first-quarter volume of 4,694 BOE/d as the company continued to restore disrupted production from Hurricanes Gustav and Ike. Recent volumes have averaged more than 8,000 BOE/d, benefitting from the successful Barolo well, which was placed on-line in January at nearly 1,700 BOE/d net, as well as two well recompletions that began producing in January at a combined net rate of 1,900 BOE/d.
Further detail on the exploration and development program is provided in the attached Operations Report.
CONFERENCE CALL TOMORROW AT 10 A.M. EST, 3 P.M. LONDON TIME
Energy XXI will host its second-quarter conference call tomorrow, Tuesday, Feb. 10, 2009, at 10 a.m. EST (3 p.m. London time). The dial-in numbers are 1 (719) 325-2395 (U.S.) and 08000 287 141 (U.K.), and the confirmation code is 6243110. 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 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. To learn more, visit the Energy XXI website at www.energyxxi.com.
The Energy XXI logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3587
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 Six Months Ended December 31, December 31, ------------------------------------------ 2008 2007 2008 2007 ------------------------------------------ Net Income (Loss) as Reported $(429,203) $ 6,475 $(433,854) $ 8,362 Total other (income) expense 19,064 26,416 40,035 52,729 Impairment of oil and gas properties 459,109 -- 459,109 -- Depreciation, depletion and amortization 65,002 75,406 127,411 148,659 Income tax expense (benefit) (45,194) 3,566 (48,045) 4,495 ------------------------------------------ EBITDA $ 68,778 $ 111,863 $ 144,656 $ 214,245 ========================================== EBITDA Per Share Basic $ 0.48 $ 1.33 $ 1.00 $ 2.55 Diluted $ 0.48 $ 1.29 $ 1.00 $ 2.37 Weighted Average Number of Common Shares Outstanding Basic 144,174 84,141 144,479 84,138 Diluted 144,174 86,506 144,479 90,262 -------------------------------------------------------------------- Net Income (Loss) as Reported $(429,203) $ 6,475 $(433,854) $ 8,362 Deferred income tax expense (benefit) (45,910) 3,566 (48,761) 4,495 Change in derivative financial instruments (8,520) (486) (9,862) (508) Accretion of asset retirement obligations 2,433 1,989 4,894 3,749 Impairment of oil and gas properties 459,109 -- 459,109 -- Depletion, depreciation, and amortization 65,002 75,406 127,411 148,659 Amortization of debt discount and debt issuance costs - net (160) 1,454 534 2,574 Common stock issued to Directors for services and common stock option expense 602 -- 865 67 ------------------------------------------ Discretionary Cash Flow $ 43,353 $ 88,404 $ 100,336 $ 167,398 ========================================== ENERGY XXI (BERMUDA) LIMITED CONSOLIDATED BALANCE SHEETS (In Thousands, except share information) December 31, June 30, 2008 2008 ---------------------- ASSETS (Unaudited) Current Assets Cash and cash equivalents $ 87,234 $ 168,962 Accounts receivable Oil and natural gas sales 41,571 116,678 Joint interest billings 26,747 21,322 Insurance and other 25,955 4,896 Prepaid expenses and other current assets 30,415 14,662 Royalty deposit 3,249 4,548 Deferred income taxes -- 88,198 Derivative financial instruments 112,115 2,179 ---------------------- Total Current Assets 327,286 421,445 ---------------------- Property and Equipment, net of accumulated depreciation, depletion, amortization and impairment Oil and natural gas properties - full cost method of accounting 1,224,510 1,561,276 Other property and equipment 9,462 10,020 ---------------------- Total Property and Equipment - net 1,233,972 1,571,296 ---------------------- Derivative financial instruments 30,733 3,747 ---------------------- Deferred income taxes -- 36,055 ---------------------- Debt issuance costs, net of accumulated amortization 15,389 17,388 ---------------------- Total Assets $1,607,380 $2,049,931 ====================== LIABILITIES Current Liabilities Accounts payable $ 108,232 $ 106,751 Note payable 7,886 -- Accrued liabilities 120,567 98,869 Derivative financial instruments 7,419 245,626 Current maturities of long-term debt 7,760 7,250 ---------------------- Total Current Liabilities 251,864 458,496 Long-term debt, less current maturities 918,232 944,972 Deferred income taxes 21,843 -- Asset retirement obligations 77,497 81,097 Derivative financial instruments 1,861 190,781 Other 33,179 -- ---------------------- Total Liabilities 1,304,476 1,675,346 ---------------------- Commitments and Contingencies Stockholders' Equity Preferred stock, $0.01 par value, 2,500,000 shares authorized and no shares issued at December 31, 2008 and June 30, 2008 -- -- Common stock, $0.001 par value, 400,000,000 shares authorized and 146,032,650 and 145,299,675 shares issued and 145,108,046 and 144,937,119 shares outstanding at December 31, 2008 and June 30, 2008, respectively 146 145 Additional paid-in capital 603,256 601,509 Retained earnings (deficit) (377,366) 57,941 Accumulated other comprehensive income (loss), net of income taxes 76,868 (285,010) ---------------------- Total Stockholders' Equity 302,904 374,585 ---------------------- Total Liabilities and Stockholders' Equity $1,607,380 $2,049,931 ====================== ENERGY XXI (BERMUDA) LIMITED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, except per share information) (Unaudited) Three Months Ended Six Months Ended December 31, December 31, ------------------------------------------ 2008 2007 2008 2007 ------------------------------------------ Revenues Oil sales $ 66,668 $ 93,322 $ 148,730 $ 180,895 Natural gas sales 40,184 60,403 77,866 116,438 ------------------------------------------ Total Revenues 106,852 153,725 226,596 297,333 ------------------------------------------ Costs and Expenses Lease operating expense 37,564 34,043 72,562 64,736 Production taxes 1,878 1,272 3,914 3,232 Impairment of oil and gas properties 459,109 -- 459,109 -- Depreciation, depletion and amortization 65,002 75,406 127,411 148,659 Accretion of asset retirement obligations 2,433 1,989 4,894 3,749 General and administrative expense 6,236 5,644 12,471 11,415 Gain on derivative financial instruments (10,037) (1,086) (11,901) (44) ------------------------------------------ Total Costs and Expenses 562,185 117,268 668,460 231,747 ------------------------------------------ Operating Income (Loss) (455,333) 36,457 (441,864) 65,586 ------------------------------------------ Other Income (Expense) Interest income 2,104 403 3,438 901 Interest expense (21,168) (26,819) (43,473) (53,630) ------------------------------------------ Total Other Income (Expense) (19,064) (26,416) (40,035) (52,729) ------------------------------------------ Income (Loss) Before Income Taxes (474,397) 10,041 (481,899) 12,857 Income Tax Expense (Benefit) (45,194) 3,566 (48,045) 4,495 ------------------------------------------ Net Income (Loss) $(429,203) $ 6,475 $(433,854) $ 8,362 ========================================== Earnings (Loss) Per Share Basic $ (2.98) $ 0.08 $ (3.00) $ 0.10 Diluted $ (2.98) $ 0.07 $ (3.00) $ 0.09 Weighted Average Number of Common Shares Outstanding Basic 144,174 84,141 144,479 84,138 Diluted 144,174 86,506 144,479 90,262 ENERGY XXI (BERMUDA) LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited) Three Months Ended Six Months Ended December 31, December 31, ------------------------------------------ 2008 2007 2008 2007 ------------------------------------------ Cash Flows From Operating Activities Net income (loss) $(429,203) $ 6,475 $(433,854) $ 8,362 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Deferred income tax expense (benefit) (45,910) 3,566 (48,761) 4,495 Change in derivative financial instruments (8,520) (486) (9,862) (508) Accretion of asset retirement obligations 2,433 1,989 4,894 3,749 Depreciation, depletion, and amortization 65,002 75,406 127,411 148,659 Impairment of oil and gas properties 459,109 -- 459,109 -- Amortization of debt discount and debt issuance costs - net (160) 1,454 534 2,574 Common stock issued to Directors for services and common stock option expense 602 -- 865 67 Changes in operating assets and liabilities Accounts receivable (460) (12,643) 53,608 (33,895) Prepaid expenses and other current assets 14,028 875 (12,706) (18,870) Accounts payable and other liabilities (25,472) (28,454) (32,254) 10,221 ------------------------------------------ Net Cash Provided by Operating Activities 31,449 48,182 108,984 124,854 ------------------------------------------ Cash Flows from Investing Activities Acquisitions -- (26,845) -- (30,366) Capital expenditures (101,765) (91,729) (194,368) (171,218) Other (255) (35) (255) (33) ------------------------------------------ Net Cash Used in Investing Activities (102,020) (118,609) (194,623) (201,617) ------------------------------------------ Cash Flows from Financing Activities Proceeds from the issuance of common stock -- -- -- 32 Dividends to shareholders (1,453) -- (1,453) -- Proceeds from long-term debt 105,239 163,135 249,990 183,135 Payments on long-term debt (2,320) (92,520) (152,403) (114,010) Purchase of bonds (32,563) -- (91,355) -- Other (401) (688) (868) (678) ------------------------------------------ Net Cash Provided by Financing Activities 68,502 69,927 3,911 68,479 ------------------------------------------ Net Decrease in Cash and Cash Equivalents (2,069) (500) (81,728) (8,284) Cash and Cash Equivalents, beginning of period 89,303 12,000 168,962 19,784 ------------------------------------------ Cash and Cash Equivalents, end of period $ 87,234 $ 11,500 $ 87,234 $ 11,500 ========================================== ENERGY XXI (BERMUDA) LIMITED CONSOLIDATED OPERATIONAL INFORMATION (Unaudited) Quarter Ended ----------------------------------------------------- Dec. 31, Sept. 30, June 30, Mar. 31, Dec. 31, 2008 2008 2008 2008 2007 ----------------------------------------------------- Operating revenues (In Thousands, except for unit amounts) Crude oil sales $ 53,388 $ 119,214 $ 160,118 $ 126,660 $ 108,487 Natural gas sales 33,111 44,442 77,356 61,675 53,759 Hedge gain (loss) 20,353 (43,912) (58,712) (21,198) (8,521) ----------------------------------------------------- Total revenues 106,852 119,744 178,762 167,137 153,725 ----------------------------------------------------- Percent of operating revenues from crude oil Prior to hedge gain (loss) 61.7% 72.8% 67.4% 67.3% 66.9% Including hedge gain (loss) 62.4% 68.5% 62.5% 62.0% 60.7% Operating expenses Lease operating expense Insurance expense 4,934 4,918 3,932 4,642 4,812 Workover and maintenance 7,094 3,873 6,741 5,447 4,489 Direct lease operating expense 25,536 26,207 29,108 28,253 24,742 ----------------------------------------------------- Total lease operating expense 37,564 34,998 39,781 38,342 34,043 Production taxes 1,878 2,036 3,699 1,755 1,272 Impairment of oil and gas properties 459,109 -- -- -- -- Depreciation, depletion and amortization 65,002 62,409 83,462 75,268 75,406 General and administrative 6,236 6,235 10,123 4,912 5,644 Other - net (7,604) 597 5,932 4,611 903 ----------------------------------------------------- Total operating expenses 562,185 106,275 142,997 124,888 117,268 ----------------------------------------------------- Operating income (loss) $(455,333) $ 13,469 $ 35,765 $ 42,249 $ 36,457 ===================================================== Sales volumes Natural gas (MMcf) 54.4 46.8 67.9 73.3 78.1 Crude oil (MBbls) 10.1 11.0 15.1 13.9 13.0 Total (MBOE) 19.2 18.8 26.4 26.1 26.0 Percent of sales volumes from crude oil 52.6% 58.5% 57.2% 53.3% 50.0% Average sales price Natural gas per Mcf $ 6.62 $ 10.33 $ 12.52 $ 9.25 $ 7.48 Hedge gain (loss) per Mcf 1.41 (1.57) (1.66) 0.28 0.93 ----------------------------------------------------- Total natural gas per Mcf $ 8.03 $ 8.76 $ 10.86 $ 9.53 $ 8.41 ===================================================== Crude oil per Bbl $ 57.38 $ 117.75 $ 116.90 $ 100.10 $ 90.71 Hedge gain (loss) per Bbl 14.27 (36.70) (35.38) (18.20) (12.68) ----------------------------------------------------- Total crude oil per Bbl $ 71.65 $ 81.05 $ 81.52 $ 81.90 $ 78.03 ===================================================== Total hedge gain (loss) per BOE $ 11.54 $ (25.39) $ (24.46) $ (8.92) $ (3.56) ===================================================== Operating revenues per BOE $ 60.57 $ 69.23 $ 74.49 $ 70.33 $ 64.24 ----------------------------------------------------- Operating expenses per BOE Lease operating expense Insurance expense 2.79 2.84 1.64 1.95 2.01 Workover and maintenance 4.02 2.24 2.81 2.29 1.88 Direct lease operating expense 14.48 15.15 12.13 11.89 10.34 ----------------------------------------------------- Total lease operating expense 21.29 20.23 16.58 16.13 14.23 Production taxes 1.06 1.18 1.54 0.74 0.53 Impairment of oil and gas properties 260.26 -- -- -- -- Depreciation, depletion and amortization 36.85 36.08 34.78 31.67 31.51 General and administrative 3.54 3.60 4.22 2.07 2.36 Other - net (4.31) 0.35 2.47 1.94 0.38 ----------------------------------------------------- Total operating expenses 318.69 61.44 59.59 52.55 49.01 ----------------------------------------------------- Operating income (loss) per BOE $ (258.12) $ 7.79 $ 14.90 $ 17.78 $ 15.23 ===================================================== ENERGY XXI (BERMUDA) LIMITED SUMMARY OF HEDGE POSITIONS AS OF FEBRUARY 9, 2009 Natural Gas (000 MMBTU) ------------------------------------------------------------ Average ---------------------- Qtr Instrument Volume Sub Floor Cap --- ---------- ------ --- ----- --- Q309 Swaps 4,250 7.12 7.12 3 Way Collars 1,520 6.00 8.11 10.08 Put Spreads 2,040 6.22 8.36 Q409 Swaps 3,850 6.99 6.99 3 Way Collars 840 6.00 8.04 10.01 Put Spreads 2,640 6.17 8.34 Q110 Swaps 1,770 8.47 8.47 3 Way Collars 2,480 6.00 8.19 10.13 Put Spreads 920 6.50 8.50 Q210 Swaps 1,570 8.47 8.47 3 Way Collars 2,400 6.00 8.19 10.13 Put Spreads 920 6.50 8.50 Q310 Swaps 1,400 8.12 8.12 3 Way Collars 2,110 6.00 8.21 10.15 Q410 Swaps 1,120 8.12 8.12 3 Way Collars 2,100 6.00 8.22 10.15 Q111 Swaps 760 8.12 8.12 3 Way Collars 2,100 6.00 8.22 10.15 Q211 Swaps 460 8.12 8.12 3 Way Collars 2,080 6.00 8.22 10.15 Q311 3 Way Collars 900 5.50 7.50 10.55 Q411 3 Way Collars 910 5.50 7.50 10.55 Q112 3 Way Collars 920 5.50 7.50 10.55 Q212 3 Way Collars 920 5.50 7.50 10.55 Crude Oil (000 BBL) ------------------------------------------------------------- Average ------------------------ Qtr Instrument Volume Sub Floor Cap --- ---------- ------ --- ----- --- Q309 Swaps 249 70.40 70.40 3 Way Collars 170 53.94 67.24 78.94 Collars 309 82.48 109.41 Put Spreads 270 85.00 110.00 Q409 Swaps 238 70.47 70.47 3 Way Collars 137 53.69 67.37 79.66 Collars 285 81.99 109.18 Put Spreads 273 85.00 110.00 Q110 Swaps 221 70.63 70.63 3 Way Collars 111 53.38 67.52 80.49 Collars 267 81.49 108.94 Put Spreads 276 85.00 110.00 Q210 Swaps 210 70.73 70.73 3 Way Collars 87 52.93 67.70 81.64 Collars 248 80.98 108.70 Put Spreads 276 85.00 110.00 Q310 Swaps 206 70.65 70.65 3 Way Collars 68 52.35 67.35 82.05 Collars 222 79.91 106.38 Q410 Swaps 192 70.73 70.73 3 Way Collars 60 52.00 67.00 82.04 Collars 198 79.34 106.05 Q111 Swaps 177 70.81 70.81 3 Way Collars 52 51.54 66.54 82.03 Collars 172 78.66 105.71 Q211 Swaps 163 70.90 70.90 3 Way Collars 45 50.95 65.95 82.02 Collars 154 77.78 105.31 Includes production for January 2009 and later; Quarters based on June 30 fiscal year-end All prices are weight-averaged by contract volume FY 2009 2nd Quarter Operations Report ------------------------------------------------------- EXXI Fiscal 2nd Quarter 2009 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 1 1 0 0 1 1 ------------------------------------------------------- Non-Operated ------------------------------------------------------- Oil 1 0.25 0 0 1 0.25 ------------------------------------------------------- Gas 0 0 1 0.25 1 0.25 ------------------------------------------------------- Dry 2 0.80 0 0 2 0.80 ------------------------------------------------------- Total 4 2 2 1.25 6 3.30 ------------------------------------------------------- ------------------------------------------------------- Exploration Development Total ------------------------------------------------------- Success Rate (Net) 12% 100% 45% ------------------------------------------------------- ------------------------------------------------------- Exploration Development Total ------------------------------------------------------- Onshore 4 1 5 ------------------------------------------------------- Offshore 0 1 1 ------------------------------------------------------- Total 4 2 6 -------------------------------------------------------
CENTRAL GULF HIGHLIGHTS
South Timbalier 21 (100% WI/83.33% NRI)
During the fiscal second quarter, South Timbalier 21 net production averaged 4,939 BOE/d, up from fiscal first-quarter volume of 4,694 BOE/d. Recent volumes have averaged more than 8,000 BOE/d, benefitting from the following activity:
* ST 21 #82 (Barolo Prospect) - completed to the D-7 and D-10 sands and brought online in January at 845 BOE/d and 1,187 BOE/d, respectively. * ST 28 #F-3 - recompleted to the S-4 sand (thru-tubing) and placed on production in December at 902 BOE/d. * ST 21 #109 - recompleted to the D-10 sand in early January and placed on-line at 1,400 BOE/d. * ST 21 #128 (Gouda Prospect) - re-worked in the D-7 sand and estimated to come online at 1,000 BOE/d during the current quarter.
EASTERN GULF HIGHLIGHTS
The Eastern Gulf properties averaged 5,721 BOE/d in the fiscal second quarter, up from the fiscal first-quarter volumes of 4,890 BOE/d due to restoration of hurricane shut-ins. Recent highlights include:
* Main Pass 73 #7 (50% WI/42% NRI) - successfully sidetracked to the BA-2 objective and brought online in January at 250 BOE/d. * Main Pass 72 #C-10 (50% WI/42% NRI) - recompleted in November to the TX-1 sand and brought online at 390 BOE/d. * Main Pass 61 #C-5 (50% WI/39% NRI) - this water-injection well has been sidetracked to better maintain reservoir pressure and therefore increase future oil recoveries from the field, which currently produces approximately 3,800 BOE/d (gross).
ONSHORE/GULF COAST HIGHLIGHTS
Lake Salvador
In the Apache-operated Golden Meadow field (25% WI, 19% NRI) in Lafourche Parish, Louisiana, the LL&E #233 well has been completed and tested at 595 BOE/d.
The LL&E #236 well logged 75 feet of net pay between 12,381 and 12,505 feet in the Tex W3 sand, which appears to be oil bearing. The well has encountered 126 feet of net natural gas pay between 15,696 and 16,153 feet in the Big Hum sand. The partnership plans to dual complete the well to the Tex W-3 and Big Hum Sands, with first production expected by early April, pending pipeline completion and hookup.
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.