* Main Pass 61 oil wells placed on production
* Fastball natural gas project placed on-line
* Cote de Mer, hurricane-affected facilities represent future volumes
HOUSTON, Nov. 2, 2009 (GLOBE NEWSWIRE) -- Energy XXI (Bermuda) Limited (Nasdaq:EXXI) (LSE:EXXI) today announced fiscal first-quarter results for the period ended Sept. 30, 2009 and provided an operational update.
For the 2010 fiscal first quarter, Energy XXI reported net cash provided by operating activities of $27.3 million and earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) of $51.3 million, compared with $71.1 million and $75.9 million, respectively, in the 2009 fiscal first quarter.
The company reported a 2010 fiscal first-quarter net loss of $12.3 million, or $0.08 per share, on revenues of $84.9 million and production of 15,500 barrels of oil equivalent per day (BOE/d). The loss includes $9.2 million of non-cash deferred tax expense primarily resulting from changes in other comprehensive income related to the value of the hedge portfolio. In the 2009 fiscal first quarter, the company had a net loss of $4.7 million, or $.03 per share, on revenues of $119.7 million and production of 18,800 BOE/d. The net realized price received for the company's production in the 2010 fiscal first quarter averaged $59.59 per BOE, compared with $69.23 per BOE in the 2009 fiscal first quarter.
"The capital program is generating excellent results, reversing the fiscal first-quarter production decline," Energy XXI Chairman and CEO John Schiller said. "Shut-in of a key well at our South Timbalier 21 field and the virtual shut-down of the capital program in the last quarter of our 2009 fiscal year resulted in lower volumes in the just-completed 2010 fiscal first quarter. Today, we are capable of producing nearly 20,000 BOE/d, and we still have significant volumes pending from new wells and the restoration of hurricane-affected properties."
Volumes have been increased at the Main Pass 61 oil field offshore Louisiana, in which Energy XXI has a 50 percent working interest (WI), a 39.2 percent net revenue interest (NRI) and serves as operator. The MP 61 #C-9 well, which was spud Sept. 5 and drilled to a total vertical depth (TVD) of 9,000 feet, was completed in the J-6 sand and placed on production at a net rate of 1,026 BOE/d. The MP #A-10 well, which was spud Sept. 7 and drilled to 7,187 feet TVD, was completed in the J-6 sand and placed on production at a net rate of 1,013 BOE/d. The MP 61 #A-11 well, which was spud Sept. 14 and drilled to 7,386 feet TVD, was completed in the J-6 sand and placed on production at an initial net rate of 550 BOE/d, which is continuing to ramp up.
In addition, the Newfield-operated Fastball discovery at Vioska Knoll 1003 offshore Louisiana, in which Energy XXI holds a 16.7 percent NRI, has been placed online at a currently constrained net rate of 770 BOE/d.
Onshore Louisiana, in Vermillion Parish, the Energy XXI operated Cote de Mer discovery also is nearing first production. This project, in which Energy XXI holds a 23.6 percent NRI, is expected to be placed online in November at a rate of between 750 and 1,200 BOE per day, net to Energy XXI.
Several significant company properties offshore Louisiana continue to be curtailed due to hurricane damage on third-party pipelines. The Eugene Island 280 field (21.4 percent NRI) is expected to return to service in November at between 250 and 300 BOE per day, net to Energy XXI; the East Cameron 334/335 field (42.5 percent NRI) is expected to return to service in December at between 900 and 1,100 BOE per day, net to Energy XXI; and the South Pass 49 field (21.2 percent NRI) is expected to return to service in February at between 700 and 800 BOE per day, net to Energy XXI.
In addition to development activities, Energy XXI is funding 14.1 percent of the exploratory costs to earn a 15.8 percent WI and 12.6 percent NRI at the ultra-deep Davy Jones prospect at South Marsh Island Block 230 on the Gulf of Mexico shelf, offshore Louisiana. This McMoRan-operated well, which is in 20 feet of water, has been drilled to 26,300 feet toward a proposed target depth of 28,000 feet, seeking to test the Eocene (Wilcox), Paleocene and possibly Cretaceous (Tuscaloosa) sections within a large ultra-deep structure encompassing four OCS lease blocks.
Capital Expenditures
During the 2010 fiscal first quarter, capital expenditures totaled $36.9 million, excluding plug-and-abandonment costs, with $6.2 million in exploration and $30.7 million in development and other investments.
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 Macquarie Capital (Europe) 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 is a reconciliation of net income to EBITDA, a
non-GAAP financial measure. 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. This non-GAAP measure is useful in comparisons of oil and gas
exploration and production companies as it excludes non-operating
fluctuations in assets and liabilities.
Three Months Ended
September 30,
-------------------
2009 2008
-------------------
Net Loss as Reported $(12,300) $ (4,651)
Total other (income) expense 18,976 20,971
Depreciation, depletion and amortization 35,351 62,409
Income tax expense (benefit) 9,247 (2,851)
-------------------
EBITDA $ 51,274 $75,878
===================
EBITDA Per Share
Basic $0.35 $0.52
Diluted $0.35 $0.52
Weighted Average Number of Common Stock
Outstanding
Basic 145,755 144,783
Diluted 145,755 144,783
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED BALANCE SHEETS
(In Thousands, except share information)
Sept. 30, June 30,
2009 2009
-----------------------
ASSETS (Unaudited)
Current Assets
Cash and cash equivalents $ 107,301 $ 88,925
Restricted cash 526 --
Accounts receivable
Oil and natural gas sales 29,964 40,087
Joint interest billings 16,642 17,624
Insurance and other 47,004 2,562
Prepaid expenses and other current assets 36,059 16,318
Royalty deposit 1,746 1,746
Derivative financial instruments 20,629 31,404
-----------------------
Total Current Assets 259,871 198,666
-----------------------
Property and equipment, net of accumulated
depreciation, depletion, amortization and
impairment
Oil and natural gas properties - full
cost method of accounting 1,040,188 1,102,596
Other property and equipment 8,742 9,149
-----------------------
Total Property and Equipment - net 1,048,930 1,111,745
-----------------------
Other Assets
Derivative financial instruments 1,529 3,838
Debt issuance costs, net of accumulated
amortization 13,427 14,413
-----------------------
Total Other Assets 14,956 18,251
-----------------------
Total Assets $1,323,757 $1,328,662
=======================
LIABILITIES
Current Liabilities
Accounts payable $ 92,627 $ 81,025
Note payable 13,045 --
Accrued liabilities 50,905 36,180
Asset retirement obligations 66,700 66,244
Derivative financial instruments 13,917 15,732
Current maturities of long-term debt 2,202 4,107
-----------------------
Total Current Liabilities 239,396 203,288
Long-term debt, less current maturities 856,100 858,720
Deferred income taxes 29,580 26,889
Asset retirement obligations 66,803 77,955
Derivative financial instruments 1,788 4,818
Other 27,649 29,492
-----------------------
Total Liabilities 1,221,316 1,201,162
-----------------------
Commitments and Contingencies (Note 13)
Stockholders' Equity
Preferred stock, $0.01 par value, 2,500,000
shares authorized and no shares issued at
September 30, 2009 and June 30, 2009 -- --
Common stock, $0.001 par value, 400,000,000
shares authorized and 146,605,377 and
146,415,258 shares issued and 146,068,497
and 145,750,584 shares outstanding at
September 30, 2009 and June 30, 2009,
respectively 146 146
Additional paid-in capital 604,141 604,724
Accumulated deficit (528,167) (515,867)
Accumulated other comprehensive income,
net of income taxes 26,321 38,497
-----------------------
Total Stockholders' Equity 102,441 127,500
-----------------------
Total Liabilities and Stockholders'
Equity $1,323,757 $1,328,662
=======================
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share information)
(Unaudited)
Three Months Ended
September 30,
-----------------------
2009 2008
-----------------------
Revenues
Oil sales $ 66,293 $ 82,062
Natural gas sales 18,614 37,682
-----------------------
Total Revenues 84,907 119,744
-----------------------
Costs and Expenses
Lease operating expense 25,425 34,998
Production taxes 1,275 2,036
Depreciation, depletion and amortization 35,351 62,409
Accretion of asset retirement obligations 5,146 2,461
General and administrative expense 8,066 6,235
Gain on derivative financial instruments (6,279) (1,864)
-----------------------
Total Costs and Expenses 68,984 106,275
-----------------------
Operating Income 15,923 13,469
-----------------------
Other Income (Expense)
Interest income 1,986 1,334
Interest expense (20,962) (22,305)
-----------------------
Total Other Income (Expense) (18,976) (20,971)
-----------------------
Loss Before Income Taxes (3,053) (7,502)
Income Tax Expense (Benefit) 9,247 (2,851)
-----------------------
Net Loss $ (12,300) $ (4,651)
=======================
Loss Per Share
Basic $ (0.08) $ (0.03)
Diluted $ (0.08) $ (0.03)
Weighted Average Number of Common Shares
Outstanding
Basic 145,755 144,783
Diluted 145,755 144,783
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Three Months Ended
September 30,
-----------------------
2009 2008
-----------------------
Cash Flows From Operating Activities
Net loss $ (12,300) $ (4,651)
Adjustments to reconcile loss to net cash
provided by (used in) operating activities:
Deferred income tax expense (benefit) 9,247 (2,851)
Change in derivative financial instruments (12,356) (1,342)
Accretion of asset retirement obligations 5,146 2,461
Depreciation, depletion, and amortization 35,351 62,409
Amortization of deferred gain on debt (1,843) (318)
Amortization and write-off of debt
issuance costs 1,118 1,012
Common stock issued to Directors for
services and common stock option expense 903 263
Changes in operating assets and
liabilities
Accounts receivable 15,276 54,068
Prepaid expenses and other current
assets (6,696) (14,168)
Asset retirement obligations (9,834) (6,480)
Accounts payable and other liabilities 3,240 (19,348)
-----------------------
Net Cash Provided by Operating
Activities 27,252 71,055
-----------------------
Cash Flows from Investing Activities
Capital expenditures (10,141) (86,123)
Insurance payments received 7,979 --
Transfer to restricted cash (526) --
Other 88 --
-----------------------
Net Cash Used in Investing Activities (2,600) (86,123)
-----------------------
Cash Flows from Financing Activities
Proceeds from long-term debt -- 144,751
Payments on long-term debt (4,661) (150,083)
Purchase of bonds -- (58,792)
Other (1,615) (467)
-----------------------
Net Cash Used in Financing Activities (6,276) (64,591)
-----------------------
Net Increase (Decrease) in Cash and Cash
Equivalents 18,376 (79,659)
Cash and Cash Equivalents, beginning of
period 88,925 168,962
-----------------------
Cash and Cash Equivalents, end of period $ 107,301 $ 89,303
=======================
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED OPERATIONAL INFORMATION
(Unaudited)
Quarter Ended
-----------------------------------------------------
Sept. 30, June 30, Mar. 31, Dec. 31, Sept. 30,
2009 2009 2009 2008 2008
-----------------------------------------------------
(In thousands except for unit amounts)
Operating
revenues
Crude oil
sales $ 58,114 $ 58,920 $ 46,492 $ 53,388 $ 119,214
Natural gas
sales 9,770 15,168 20,435 33,111 44,442
Hedge gain
(loss) 17,023 27,010 39,209 20,353 (43,912)
-----------------------------------------------------
Total
revenues 84,907 101,098 106,136 106,852 119,744
-----------------------------------------------------
Percent of
operating
revenues from
crude oil
Prior to
hedge gain
(loss) 85.6% 79.5% 69.5% 61.7% 72.8%
Including
hedge gain
(loss) 78.1% 70.8% 68.3% 62.4% 68.5%
Operating
expenses
Lease
operating
expense
Insurance
expense 5,954 4,356 4,980 4,934 4,918
Workover and
maintenance 3,231 4,622 341 7,094 3,873
Direct lease
operating
expense 16,240 15,646 19,643 25,536 26,207
-----------------------------------------------------
Total lease
operating
expense 25,425 24,624 24,964 37,564 34,998
Production
taxes 1,275 (51) 1,587 1,878 2,036
Impairment of
oil and gas
properties -- -- 117,887 459,109 --
Depreciation,
depletion
and
amortization 35,351 39,744 50,052 65,002 62,409
General and
administrative 8,066 6,168 6,117 6,236 6,235
Other - net (1,133) 3,852 7,643 (7,604) 597
-----------------------------------------------------
Total
operating
expenses 68,984 74,337 208,250 562,185 106,275
-----------------------------------------------------
Operating
income
(loss) $ 15,923 $ 26,761 $(102,114) $(455,333) $ 13,469
=====================================================
Sales volumes
per day
Natural gas
(MMcf) 33.2 41.1 49.2 54.4 46.8
Crude oil
(MBbls) 10.0 11.9 12.5 10.1 11.0
Total (MBOE) 15.5 18.7 20.7 19.2 18.8
Percent of
sales volumes
from crude oil 64.5% 63.6% 60.4% 52.6% 58.5%
Average sales
price
Natural gas
per Mcf $ 3.20 $ 4.06 $ 4.62 $ 6.62 $ 10.33
Hedge gain
(loss) per
Mcf 2.90 3.85 2.98 1.41 (1.57)
-----------------------------------------------------
Total natural
gas per Mcf $ 6.10 $ 7.91 $ 7.60 $ 8.03 $ 8.76
=====================================================
Crude oil
per Bbl $ 63.44 $ 54.56 $ 41.40 $ 57.38 $ 117.75
Hedge gain
(loss) per
Bbl 8.93 11.68 23.16 14.27 (36.70)
-----------------------------------------------------
Total crude
oil per Bbl $ 72.37 $ 66.24 $ 64.56 $ 71.65 $ 81.05
=====================================================
Total hedge
gain (loss)
per BOE $ 11.95 $ 15.86 $ 21.07 $ 11.54 $ (25.39)
=====================================================
Operating
revenues per
BOE $ 59.59 $ 59.36 $ 57.04 $ 60.57 $ 69.23
-----------------------------------------------------
Operating
expenses per
BOE
Lease
operating
expense
Insurance
expense 4.18 2.56 2.68 2.79 2.84
Workover
and
maintenance 2.27 2.71 0.18 4.02 2.24
Direct
lease
operating
expense 11.40 9.19 10.56 14.48 15.15
-----------------------------------------------------
Total lease
operating
expense 17.85 14.46 13.42 21.29 20.23
Production
taxes 0.89 (0.03) 0.85 1.06 1.18
Impairment
of oil
and gas
properties -- -- 63.35 260.26 --
Depreciation,
depletion
and
amortization 24.81 23.34 26.90 36.85 36.08
General and
admini-
strative 5.66 3.62 3.29 3.54 3.60
Other - net (0.80) 2.27 4.11 (4.31) 0.35
-----------------------------------------------------
Total
operating
expenses 48.41 43.66 111.92 318.69 61.44
-----------------------------------------------------
Operating
income (loss)
per BOE $ 11.18 $ 15.70 $ (54.88) $ (258.12) $ 7.79
=====================================================
GLOSSARY
Barrel - unit of measure for oil and petroleum products, equivalent to 42 U.S. gallons.
Bcfe - billion cubic feet equivalent, used to equate liquid barrels to natural gas volumes at a general conversion rate of 6,000 cubic feet of gas per barrel.
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.
MBOE - thousand barrels of oil equivalent.
MMBOE - million barrels of oil equivalent.
MD - measured depth.
Net Pay - cumulative hydrocarbon-bearing formations.
Net Revenue Interest - the percentage of production revenue allocated to the working interest after first deducting proceeds allocated to royalty and overriding interest.
Spud - to begin drilling a well.
TD - target total depth of a well.
TD'd - to finish drilling a well.
TVD - total vertical depth.
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.