NEW ORLEANS, Feb. 17, 2012 (GLOBE NEWSWIRE) -- Energy Partners, Ltd. (NYSE:EPL) (EPL or the Company) today announced year-end 2011 proved reserves and provided 2011 operational results. The Company also announced that its conference call to review fourth quarter and year-end 2011 results will be held on Thursday, March 8, 2012 at 9:00 A.M. Central Time/10:00 A.M Eastern Time.
Highlights
- Proved reserves of 37.1 Mmboe (74% oil) at year-end 2011, a 35% increase over year-end 2010. Oil reserves increased year over year 59% to 27.3 Mmbbls, driven by a combination of acquisitions and organic growth.
- 80% success rate in 2011 development and exploration activities, with 2P reserves additions of 1.8 Mmboe
- Fourth quarter oil production 9,440 bopd, up 18% from 3Q2011, and annual oil production up 26% year over year
- PV10 of the proved reserves estimated at $1.1 billion using SEC prices
- Substantial liquidity of $280 million and strong credit metrics (low net debt at $3.50/Boe)
- 4Q and year-end 2011 results scheduled for release on March 8th, with the conference call set at 9 A.M. CST
2011 Year-end Proved Reserves
EPL's estimated proved reserves as of December 31, 2011 were 37.1 million barrel of oil equivalent (Mmboe)(74% oil), representing an increase of 35% compared to estimated proved reserves of 27.4 Mmboe (63% oil) as of December 31, 2010. The net increase in estimated proved reserves was the result of increases from drilling additions of 1.2 Mmboe, additions from development activities 1.8 Mmboe, revisions of 1.7 Mmboe and acquisitions of 9.4 Mmboe, offset by 4.5 Mmboe of net production. The additions, revisions and acquisitions replaced 316% of 2011 net production.
The estimated proved reserve growth was weighted towards oil adding 13.0 million barrels. The year-end 2011 estimated proved reserves of 37.1 Mmboe include estimated proved developed reserves of 33.6 Mmboe (74% oil) and estimated proved undeveloped (PUDs) reserves of 3.5 Mmboe (71% oil).
The present value of the future net cash flows before income taxes of the Company's estimated proved oil and natural gas reserves at the end of 2011 using a discount rate of 10% (PV-10) was approximately $1.1 billion as calculated consistent with SEC guidelines and pricing. This represents a 167% increase over the 2010 year-end value of $0.4 billion. The 2011 value was determined based on computed prices of $108.48 per barrel of oil and $4.16 per Mcf of natural gas as compared to $77.85 per barrel of oil and $4.54 per Mcf of natural gas in 2010. (PV-10 is a non-GAAP measure; see discussion of PV-10 in the appendix).
All of the Company's proved reserve figures are based upon third party engineering estimates prepared by Netherland, Sewell & Associates, Inc. and Ryder Scott Company, L.P.
Operational Update
Fourth quarter 2011 oil production is estimated at approximately 9,440 barrels of oil per day, which was on the highside of the Company's production guidance. Oil production increased 18% over the prior quarter primarily as a result of the Company's ramp up of well activity in the second half of 2011. A strong combination of performance across the Company's core fields was realized, coupled with the addition of the MP acquisition that occurred during the middle of the quarter. The Company's percentage of oil production for the quarter has increased to 79%, up from 44% just two years ago.
For full year 2011, costs incurred for development and exploration activities totaled approximately $101 million and was predominately expenditures on oil projects. During the year, the Company completed 39 operations, including 8 successful sidetracks and drillwells and 23 successful workovers, with an overall 80% success rate.
The Company had drill-bit additions from seven successful oil wells (a 70% success rate) totaling 1.2 Mmboe of proved reserves, and 0.6 Mmboe of probable reserves. The probable reserves are expected to contribute through further production performance. 2011 finding and development costs associated with drill-bit activities were approximately of $23.17 on a 1P basis and $14.93 Boe on a 2P basis. The successful oil wells, all of which have been brought on line, include two wells in its East Bay field, two in its Main Pass area, and three within the Ship Shoal 72 field. Two gas drillwells were determined uneconomic to complete, which had costs incurred in the fourth quarter of $3.4 million and $5.3 million, respectively.
Liquidity and Capital Resources
As of December 31, 2011, the Company had unrestricted cash on hand of $80.1 million and $6.0 million of restricted cash. The Company has a $250 million credit facility with $200 million of undrawn revolving capacity. The undrawn capacity combined with cash on hand brings total estimated liquidity to $280 million. The Company has outstanding debt of $210 million aggregate principal amount of 8.25% Senior Notes due 2018, equating to a low net debt of $3.50 per Boe at year-end 2011.
4Q and Full Year 2011 Earnings Conference Call
EPL announced today that its conference call to review fourth quarter and year-end 2011 results will be held on Thursday, March 8, 2012 at 9:00 A.M. CDT/10:00 A.M. EDT. The Company will issue its earnings release early Thursday morning.
To participate in the EPL conference call, callers in the United States and Canada can dial (866) 845-8624 and international callers can dial (706) 634-0487. The Conference I.D. for callers is 52455198.
The call will be available for replay beginning two hours after the call is completed through midnight of March 22, 2012. For callers in the United States and Canada, the toll-free number for the replay is (855) 859-2056. For international callers the number is (404) 537-3406. The Conference I.D. for all callers to access the replay is 52455198.
The conference call will be webcast live as well as for on-demand listening at the Company's web site, www.eplweb.com. Listeners may access the call through the "Conference Calls" link in the Investor Relations section of the site. The call will also be available through the CCBN Investor Network.
Description of the Company
Founded in 1998, EPL is an independent oil and natural gas exploration and production company based in New Orleans, Louisiana, and Houston, Texas. The Company's operations are concentrated in the U.S. Gulf of Mexico shelf, focusing on the state and federal waters offshore Louisiana. For more information, please visit www.eplweb.com.
Forward-Looking Statements
This press release may contain forward-looking information and statements regarding EPL. Any statements included in this press release that address activities, events or developments that EPL "expects," "believes," "plans," "projects," "estimates" or "anticipates" will or may occur in the future are forward-looking statements. We believe these judgments are reasonable, but actual results may differ materially due to a variety of important factors. Among other items, such factors might include: stock market conditions; the trading price of EPL's common stock; cash demands caused by planned and unplanned capital expenditures; changes in general economic conditions; uncertainties in reserve and production estimates; unanticipated recovery or production problems; hurricane and other weather-related interference with business operations; the effects of delays in completion of, or shut-ins of, gas gathering systems, pipelines and processing facilities; changes in legislative and regulatory requirements concerning safety and the environment as they relate to operations; oil and natural gas prices and competition; the impact of derivative positions; production expenses and expense estimates; cash flow and cash flow estimates; future financial performance; drilling and operating risks; our ability to replace oil and gas reserves; risks and liabilities associated with the properties to be acquired in the acquisition; volatility in the financial and credit markets or in oil and natural gas prices; and other matters that are discussed in EPL's filings with the Securities and Exchange Commission. (http://www.sec.gov/).
Appendix
PV-10 Definition and Discussion
PV-10 may be considered a non-GAAP financial measure as defined by the SEC. We believe that the presentation of PV-10 is relevant and useful to our investors as supplemental disclosure to the standardized measure, or after-tax amount, because it presents the discounted future net cash flows attributable to our proved reserves before taking into account future corporate income taxes and our current tax structure. Because the standardized measure is dependent on the unique tax situation of each company, our calculation may not be comparable to those of our competitors. Because of this, PV-10 can be used within the industry and by creditors and securities analysts to evaluate estimated net cash flows from proved reserves on a more comparable basis.