Attached files
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| 8-K - Energy XXI Ltd | v205910_8k.htm |
| EX-99.1 - EX-99.1 - Energy XXI Ltd | v205910_ex99-1.htm |
Energy
XXI Closes Acquisition of Gulf of Mexico Shelf Properties From
ExxonMobil
HOUSTON –
Dec. 17, 2010 – Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced it
has completed the previously announced purchase of certain shallow-water Gulf of
Mexico shelf oil and natural gas interests from ExxonMobil and its
affiliates.
The acquisition nearly doubles the
company’s reserves and production profile, adding approximately 20,000 net
barrels of oil equivalent (BOE) per day of production, about 53 percent of
which is oil, and an estimated 66 million BOE of net proved and probable
reserves, 61 percent of which is oil. Offshore leases included in the
purchase total 130,853 net acres.
“The acquired properties fit our
existing assets well, adding nine fields right in the heart of our producing
properties,” Energy XXI Chairman and CEO John Schiller said. “In
addition to oil-weighted reserves and production, supported by an extensive
pipeline system, this acquisition includes acreage, seismic data and field
studies that will help us develop a portfolio of attractive drilling and
recompletion opportunities.”
Pro forma
for the acquisition, estimated proved plus probable reserves increase 72 percent
to 158.1 million BOE from 92.1 million BOE at the company’s June 30, 2010 fiscal
year end. Production increases to approximately 46,000 BOE per day,
up more than 77 percent from the 25,900 BOE per day average in the most recent
fiscal quarter ended Sept. 30, 2010.
The
transaction was funded through a combination of cash on hand, borrowings against
the company’s $700 million corporate revolver, as amended, and proceeds from the
previously disclosed private placement by the company’s operating subsidiary,
Energy XXI Gulf Coast, Inc., of $750 million of 9.25% senior unsecured notes due
2017, which closed earlier today. Actual funding requirements at
closing totaled $1.01 billion, including the 10 percent deposit that had been
placed in escrow. The purchase remains subject to post-closing adjustments to
reflect actual operating results since the effective date of Dec. 1,
2010.
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. Seymour Pierce is Energy XXI’s listing broker in the
United Kingdom.
Glossary
Reserves:
Proved Oil and Gas Reserves
– Those quantities of crude oil and gas, which, by analysis of
geoscience and engineering data, can be estimated with reasonable certainty to
be economically producible — from a given date forward, from known
reservoirs, and under existing economic conditions, operating methods and
government regulations — prior to the time at which contracts providing the
right to operate expire, unless evidence indicates that renewal is reasonably
certain, regardless of whether deterministic or probabilistic methods are used
for the estimation. The project to extract the hydrocarbons must have commenced
or the operator must be reasonably certain that it will commence the project
within a reasonable time. This definition has been abbreviated from
the definition of “Proved oil and gas reserves” contained in
Rule 4-10(a)(22) of SEC Regulation S-X.
Probable Reserves – Those
additional reserves that are less certain to be recovered than proved reserves
but which, together with proved reserves, are as likely as not to be recovered.
This definition has been abbreviated from the applicable definition contained in
Rule 4-10(a)(18) of SEC Regulation S-X.
Possible Reserves – Those
additional reserves that are less certain to be recovered than probable
reserves. This definition has been abbreviated from the applicable definition
contained in Rule 4-10(a)(17) of Regulation S-X.
Other
terms:
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.
MMBOE – million barrels of oil
equivalent.
Enquiries
of the Company
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Energy
XXI
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Pelham
Bell Pottinger
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Stewart
Lawrence
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James
Henderson
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Vice
President, Investor Relations and
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jhenderson@pelhambellpottinger.co.uk
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Communications
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Mark
Antelme
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713-351-3006
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mantelme@pelhambellpottinger.co.uk
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slawrence@energyxxi.com
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+44
(0) 20 7861 3232
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Seymour
Pierce – UK AIM Adviser
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Jonathan
Wright/
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Jeremy
Porter – Corporate Finance
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Richard
Redmayne – Corporate Broking
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Tel:
+44 (0) 20 7107 8000
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