Proceeds to Reduce Bank Debt
Affected Volumes Re-Hedged
HOUSTON, March 12, 2009 (GLOBE NEWSWIRE) -- Energy XXI (Bermuda) Limited (Nasdaq:EXXI) (AIM:EXXI) today announced the early settlement of certain oil and natural gas hedges. Net proceeds of $66.5 million are expected to be used to reduce borrowings under the company's secured revolving credit facility. Concurrent with the early settlements, Energy XXI re-hedged all of the related volumes.
"Monetizing a portion of our hedges and re-hedging allows Energy XXI to capture value today while still protecting our future cash flows," Energy XXI Chairman and CEO John Schiller said.
At March 11, 2009, the company had approximately $63 million of cash on hand and bank borrowings under its $400 million borrowing base totaled $300.6 million, before application of the $66.5 million of hedge-settlement proceeds. Following the hedge repositioning, the mark-to-market value of the company's hedge portfolio is currently $102 million.
In total, the company monetized crude oil swaps and collars covering 4,174 barrels per day (Bbl/d) for the remainder of 2009, and 1,516 Bbl/d for 2010, as well as natural gas swaps and collars covering 10,507 million British thermal units per day (MMBTU/d) for the remainder of 2009, and 16,055 MMBTU/d for 2010. These hedges were replaced with new crude oil swaps on the same volumes at prices averaging $50.32 for the remainder of 2009 and $54.70 for 2010, as well as natural gas swaps on the same volumes at prices averaging $4.22 for the remainder of 2009 and $5.75 for 2010. The full revised hedge schedule is included as an attachment to this news release.
"Even after re-setting a large portion of our hedge portfolio, we expect to generate sufficient cash flow from operations to pay down additional debt during our 2010 fiscal year, which begins July 1, 2009," Schiller said. "Energy XXI is positioned to ride out the current industry down-cycle and to capture opportunities as oil and gas prices recover."
Energy XXI currently is pursuing a bank borrowing redetermination that is expected to be completed by the end of March. The company remains in compliance with the revolving credit facility's covenants and expects to have continued liquidity under the facility following the redetermination.
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. 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
SUMMARY OF HEDGE POSITIONS AS OF MARCH 11, 2009
Natural Gas (000 MMBTU)
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Average
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Qtr Instrument Volume Sub Floor Cap
--- ---------- ------ --- ----- ---
Q409 Swaps 4,200 5.83 5.83
3 Way Collars 710 6.00 8.00 9.98
Put Spreads 2,770 6.16 8.33
Q110 Swaps 1,770 7.20 7.20
3 Way Collars 2,480 6.00 8.19 10.13
Put Spreads 920 6.50 8.50
Q210 Swaps 1,570 7.50 7.50
3 Way Collars 2,400 6.00 8.19 10.13
Put Spreads 920 6.50 8.50
Q310 Swaps 1,400 5.74 5.74
3 Way Collars 2,110 6.00 8.21 10.15
Q410 Swaps 1,120 5.45 5.45
3 Way Collars 2,100 6.00 8.22 10.15
Q111 Swaps 760 5.69 5.69
3 Way Collars 2,100 6.00 8.22 10.15
Q211 Swaps 460 6.17 6.17
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)
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Average
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Qtr Instrument Volume Sub Floor Cap
--- ---------- ------ --- ----- ---
Q409 Swaps 541 54.17 54.17
3 Way Collars 137 53.69 67.37 79.66
Collars 73 80.00 111.00
Put Spreads 273 85.00 110.00
Q110 Swaps 422 55.62 55.62
3 Way Collars 111 53.38 67.52 80.49
Collars 67 80.00 111.00
Put Spreads 276 85.00 110.00
Q210 Swaps 398 56.03 56.03
3 Way Collars 87 52.93 67.70 81.64
Collars 61 80.00 111.00
Put Spreads 276 85.00 110.00
Q310 Swaps 304 63.98 63.98
3 Way Collars 68 52.35 67.35 82.05
Collars 124 77.34 106.22
Q410 Swaps 277 64.36 64.36
3 Way Collars 60 52.00 67.00 82.04
Collars 113 77.30 106.13
Q111 Swaps 248 64.83 64.83
3 Way Collars 52 51.54 66.54 82.03
Collars 101 77.28 106.10
Q211 Swaps 222 65.26 65.26
3 Way Collars 45 50.95 65.95 82.02
Collars 95 77.30 106.15
Includes production for April 2009 and later; Quarters based on
June 30 fiscal year-end
All prices are weight-averaged by contract volume