HOUSTON, Sept. 18, 2008 (GLOBE NEWSWIRE) -- Energy XXI (Bermuda) Limited (Nasdaq:EXXI) (LSE:EXXI) (LSE:EXXS) today provided an operational update related to storm impacts.

Energy XXI safely evacuated all operating personnel and shut in a majority of its production ahead of Hurricane Ike. Following the storm, inspections have revealed limited damage to company-operated facilities from Hurricane Ike, although two non-operated fields accounting for approximately 1,750 barrels of oil equivalent per day (BOE/d), or about 7 percent of the company's pre-storm net production, will be off-line indefinitely due to toppled production platforms.

The Eugene Island 330 field, in which Energy XXI holds a 17.5 percent working interest, has lost its two primary producing platforms, which accounted for approximately 1,200 BOE/d of the company's net production prior to the recent storms. In addition, a single well at Ewing Bank 948 that had been producing about 550 BOE/d net is off-line due to the loss of the third-party platform through which it produced via sub-sea tie-back. These outages are incremental to the 300 BOE/d of net volumes knocked offline by Hurricane Gustav due to the loss of a small producing platform at South Timbalier 21. Assessments will be conducted to determine potential redevelopment options at all three locations.

The company's total clean-up and repair costs related to Hurricane Ike are expected to be capped at its $7.5 million insurance deductible. Energy XXI does not purchase business interruption insurance. There have been no reported injuries to personnel or environmental impacts related to the company's properties.

Restoration efforts following Hurricane Gustav were delayed further by Hurricane Ike, but have since resumed. As of today, Sept. 18, the company's production has reached about 10,000 BOE/d, or approximately 38 percent of pre-storm levels. Due to the effects of Hurricanes Gustav and Ike, Energy XXI estimates that production for the quarter ending Sept. 30 will average approximately 18,000 BOE/d. In addition to the indefinite delay of volumes from the Eugene Island 330 and Ewing Banks 948 fields, production constraints could continue beyond September, depending on the return to service of third-party pipelines and related facilities. Energy XXI expects quarterly production to exceed its hedged volumes. Lehman Brothers is a minor participant in the company's outstanding hedges and revolving credit facility. Their bankruptcy filing is expected to have no material impact on the company.

Key Field and Rig Status

With the exception of Eugene Island 330, all of the company's key fields are expected to be restored to production once third-party take-away pipelines are placed back in service, although some may flow at constrained levels while portions of the pipeline systems remain under repair. The current status of key fields follows.

 Eastern Gulf Fields
 * Main Pass 61 -- Production was fully restored as of Sept. 16;
 * Main Pass 72/73 -- Production was fully restored as of Sept. 16;
 * South Pass 49 -- All top side facilities are ready to flow; volumes
   remain shut-in due to a leak in the third-party-operated oil sales
   line and water damage at a related third-party facility at South
   Pass 24.

 Central Gulf Fields
 * South Timbalier 21:
     -- The ST-21 D&H platform's 6-inch departing gas sales line and
        14-inch low-pressure gas loop line are damaged; repairs are
        underway;
     -- The Gulf South take-away pipeline that handles most of the
        natural gas production from South Timbalier 21 sustained
        damage at Timbalier Island during Hurricane Gustav and is
        expected to be off-line for up to a month.
 * East Cameron 334/335 -- These fields had been returned to partial
   production Sept. 8 and were shut in again for Hurricane Ike. The
   third-party take-away pipeline servicing the area has reportedly
   sustained additional damage that will likely require several weeks
   to repair.

 Onshore/Gulf Coast Fields
 * Rabbit Island -- The field facilities incurred no significant
   damage; awaiting third-party pipeline availability, expected in the
   near term;
 * Lake Salvador -- No significant damage was incurred; the Joe McHugh
   field flowed throughout Hurricane Ike; awaiting flood waters to
   recede in some other areas;
 * Laphroaig -- No significant damage was incurred; production is
   curtailed approximately 20 percent awaiting third-party pipeline
   availability, expected in the near term.

Other Activity

The company's operational headquarters in downtown Houston also were safely evacuated ahead of Hurricane Ike's landfall. While most Houston-area residents have experienced electrical power outages and varying degrees of home damage due to the storm, there have been no reported injuries to personnel, and the company's offices have re-opened and daily corporate functions have resumed.

Of the eight rigs drilling wells in which Energy XXI has an interest, the three land rigs continued operations throughout the storm. The remainder, which include three barge rigs and two offshore rigs, were safely evacuated ahead of the storm and have since returned to operations.

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.

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