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EXXI Energy Xxi (DI)

4.00
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Last Updated: 01:00:00
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Energy Xxi (DI) LSE:EXXI London Ordinary Share BMG100821401 COM SHS USD0.005 (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.00 0.00% 4.00 0.00 01:00:00
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Q2 Results & Operations Update (6499W)

02/02/2012 7:00am

UK Regulatory


TIDMEXXI

RNS Number : 6499W

Energy XXI (Bermuda) Limited

02 February 2012

Energy XXI Reports Record Fiscal Second-Quarter Results and Provides Operations Update

   --    Development drilling program delivers early successes 
   --    Oil represents 72% of production 
   --    Beat of estimates driven by increased oil production and prices 
   --    EBITDA of $226 million sets 4(th) consecutive quarterly record 
   --    Free cash flow cuts net debt, builds cash balance 

HOUSTON - Feb., 1, 2012 - Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced results for the fiscal second-quarter ended Dec. 31, 2011, and provided an operational update.

For the 2012 fiscal second quarter, Energy XXI reported earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) of $225.6 million, more than double the prior-year's fiscal second-quarter EBITDA of $97.8 million. Net income attributable to common shareholders for the 2012 fiscal second quarter was $93.4 million, or $1.11 per diluted share, on revenues of $340.6 million and production of 42,700 barrels of oil equivalent per day (BOE/d).

"Success in developing our asset base delivered record results for the fourth straight quarter and positioned us to continue achieving strong results in today's environment," Energy XXI Chairman and CEO John Schiller said. "Production from the properties acquired in December 2010 increased more than 20 percent during the first year, primarily from oil-focused activities. Oil represented 72 percent of our production in the fiscal second quarter, up from 70 percent in the prior-year period, while realized oil prices rose 41 percent to $110 per barrel. As a result, 93 percent of our revenues for the quarter were derived from oil. This combination generated significant free cash flow that helped us reduce our net debt-to-capitalization ratio to 44 percent from 58 percent a year earlier."

Exploration and Development Activity

At Main Pass 72 (100% WI/83.3% NRI), the Onyx well continues to deliver in excess of 2,200 barrels of oil per day gross as it has since coming online in June 2011. At Grand Isle 16/18 (100% WI/ 87% NRI), multiple recompletions and one development well are delivering gross production rates totaling 5,300 BOE/d. The Sunny development well was drilled to 8,579 feet total vertical depth (TVD) targeting updip C-2 sands. The well encountered 225 feet of net pay in the B and C sands and was dual-completed. Gross production from the B-4 and C-4 sands is currently averaging 1,400 BOE/d, while the primary target, the C--2 sand was gravel packed and is available to produce through a future wireline zone change. The Winters development well was drilled to 16,500 feet TVD, encountering 166 feet gross and 83 feet net of natural gas pay in the K-2 sand. The well is expected to be on production within three weeks at a rate in excess of 20 million cubic feet per day. The company plans to drill two additional development wells, Costello and Pi, later this fiscal year.

In the West Delta 73 field (100% WI/ 87% NRI), Magnum, the first of a four-well development drilling program, was drilled to 8,500 feet TVD, encountering 60 feet of net oil pay in three Pliocene F sands and first production is expected in March. Following Magnum is the Miller development well, a proved undeveloped location targeting F sands in a sparsely drilled area on the west side of the field with a planned total depth of 8,500 feet TVD.

At South Timbalier 54 (100% WI/ 87% NRI), drilling has commenced on Camshaft, the first of two planned development wells, targeting four separate G sands with a planned total depth of 12,000 feet TVD. Plans are to dual complete this well to optimize oil production.

Within the shallow-water, ultra-deep Gulf of Mexico shelf program, the McMoRan-operated partnership is approaching several important milestones.

Completion activities at the Davy Jones No. 1 discovery well at South Marsh Island Block 230 are in an advanced stage. The wellbore has been cleaned out to total depth and drilling mud has been displaced with completion fluid. Current expectations are to perforate and flow the well during the March quarter. Installation of the central processing facility, production platform and sales pipelines has been completed. First production from the well could be established shortly after a successful flow test. The company's investment in the Davy Jones discovery well (15.8% WI/12.3% NRI) as of Dec. 31, 2011, totaled about $45 million. McMoRan holds a 63.4 percent working interest in Davy Jones.

The Blackbeard East ultra-deep exploration by-pass well has been drilled to 33,318 feet TVD and the section below 30,800 feet TVD was recently logged, identifying potential hydrocarbons in the Sparta carbonate section. The Sparta interval measures 300 feet thick and appears to be a hydrocarbon-bearing fractured carbonate. A production liner will be set to total depth and the well will be temporarily abandoned while development options are evaluated. Blackbeard East is located in 80 feet of water on South Timbalier Block 144. The company's investment in Blackbeard East (18% WI/14.35% NRI) as of Dec. 31, 2011 was about $42 million. McMoRan holds a 72.0 percent working interest in the well.

The Lafitte exploration well (18% WI/14.6% NRI), located on Eugene Island Block 223 in 140 feet of water, is drilling below 33,000 feet TVD towards a proposed total depth of 34,000 feet TVD, targeting Lower Miocene, Oligocene and potentially Wilcox sections below the salt weld. In January 2012, wireline logs indicated 40 feet of possible hydrocarbon-bearing Frio sands between 31,300 feet and 31,700 feet TVD. In November 2011, wireline logs indicated 56 net feet of hydrocarbon-bearing sand over a 58 foot gross interval in the Cris-R section of the Lower Miocene. Recent pressure data and rotary sidewall cores obtained in the Cris-R sand are being evaluated. The new Frio and Cris-R sand intervals, combined with the 115 feet of potential net Miocene pay previously announced, brings the total possible productive net sands to 211 feet in the Lafitte well. Current plans are to drill ahead to 34,000 feet TVD targeting the Sparta section seen about 80 miles away at Blackbeard East. The company's investment at Lafitte as of Dec. 31, 2011 was about $31 million. McMoRan holds a 72.0 percent working interest in Lafitte.

The Blackbeard West #2 ultra-deep exploration well (22.9% WI/17.5% NRI) commenced drilling on Nov. 25, 2011 and is currently drilling below 15,450 feet TVD towards a proposed total depth of 26,000 feet TVD. The well, located on Ship Shoal Block 188 within the Blackbeard West unit, is targeting Miocene aged sands seen below the salt weld approximately 13 miles east at Blackbeard East. The company's investment at Blackbeard West #2 totaled $3.3 million at Dec., 31, 2011. McMoRan holds a 69.4 percent working interest in Ship Shoal Block 188.

In the partnership's first project to take the ultra-deep concept onshore, operations commenced Dec. 31, 2011 at the Lineham Creek exploration prospect. Lineham Creek is located in Cameron Parish, Louisiana and is targeting Eocene and Paleocene objectives below the salt weld, with a proposed total depth of 29,000 feet TVD. Chevron U.S.A Inc., as operator of the well, holds a 50 percent working interest, Energy XXI has a 9 percent working interest, and McMoRan has a 36.0 percent working interest.

Capital Expenditures

During the 2012 fiscal second quarter, capital expenditures, including plug-and-abandonment costs, totaled $134.5 million, with $46.6 million in exploration and $87.9 million in development and other investments. Total capital expenditures for fiscal 2012 ending June 30, 2012 are expected to be between $450 million and $500 million.

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 are reconciliations of net income to the following non-GAAP financial measure: EBITDA. 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.

 
                                                        Three Months Ended    Six Months Ended 
                                                           December 31,         December 31, 
                                                       --------------------  ------------------ 
                                                          2011       2010      2011      2010 
                                                       ----------  --------  --------  -------- 
 
Net Income as Reported                                    $97,089   $10,934  $163,420   $11,067 
 
  Interest expense-net                                     28,348    21,943    55,527    43,413 
  Depreciation, depletion and amortization                 87,568    62,922   172,371   116,999 
  Income tax expense                                       12,549     2,011    21,122     2,030 
 
EBITDA                                                   $225,554   $97,810  $412,440  $173,509 
                                                       ==========  ========  ========  ======== 
 
EBITDA Per Share 
  Basic                                                     $2.95     $1.49     $5.39     $2.98 
  Diluted                                                   $2.59     $1.49     $4.73     $2.97 
 
Weighted Average Number of Common Shares Outstanding 
  Basic                                                    76,498    65,479    76,481    58,241 
  Diluted                                                  87,227    65,670    87,138    58,500 
 
 

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED BALANCE SHEETS

(In Thousands, except share information)

 
                                                                                              December 31,   June 30, 
                                                                                                  2011         2011 
                                                                                              ------------  ---------- 
ASSETS                                                                                        (Unaudited) 
Current Assets 
  Cash and cash equivalents                                                                        $79,396     $28,407 
  Restricted cash                                                                                    1,028           - 
  Accounts receivable 
      Oil and natural gas sales                                                                    141,314     126,194 
      Joint interest billings                                                                        2,814       4,526 
      Insurance and other                                                                            3,661       2,533 
  Prepaid expenses and other current assets                                                         52,817      47,751 
  Derivative financial instruments                                                                   5,592          22 
                                                                                              ------------  ---------- 
         Total Current Assets                                                                      286,622     209,433 
                                                                                              ------------  ---------- 
Property and Equipment 
  Oil and natural gas properties - full cost method of accounting, including $516.6 million 
   and $467.3 million of unevaluated properties at December 31, 2011 and June 30, 2011, 
   respectively                                                                                  2,608,737   2,545,336 
  Other property and equipment                                                                       9,025       8,201 
                                                                                              ------------  ---------- 
         Total Property and Equipment                                                            2,617,762   2,553,537 
                                                                                              ------------  ---------- 
Other Assets 
  Derivative financial instruments                                                                   9,963           - 
  Deferred income taxes                                                                                  -       2,411 
  Debt issuance costs, net of accumulated amortization                                              30,635      33,479 
                                                                                              ------------  ---------- 
         Total Other Assets                                                                         40,598      35,890 
                                                                                              ------------  ---------- 
      Total Assets                                                                              $2,944,982  $2,798,860 
                                                                                              ============  ========== 
LIABILITIES 
Current Liabilities 
  Accounts payable                                                                                $150,596    $163,741 
  Accrued liabilities                                                                               95,419     111,157 
  Notes payable                                                                                      9,196      19,853 
  Asset retirement obligations                                                                      25,379      19,624 
  Derivative financial instruments                                                                  25,352      50,259 
  Current maturities of long-term debt                                                               2,555       4,054 
                                                                                              ------------  ---------- 
      Total Current Liabilities                                                                    308,497     368,688 
  Long-term debt, less current maturities                                                        1,029,009   1,109,333 
  Deferred income taxes                                                                             68,722           - 
  Asset retirement obligations                                                                     316,698     303,618 
  Derivative financial instruments                                                                     951      70,524 
  Other liabilities                                                                                  6,234           - 
                                                                                              ------------  ---------- 
      Total Liabilities                                                                          1,730,111   1,852,163 
                                                                                              ------------  ---------- 
Commitments and Contingencies 
Stockholders' Equity 
  Preferred stock, $0.001 par value, 7,500,000 shares authorized: 
  7.25 % Convertible perpetual preferred stock, 8,000 shares issued and outstanding at 
  December 
  31, 2011 and June 30, 2011, respectively                                                               -           - 
  5.625% Convertible perpetual preferred stock, 1,050,000 shares issued and outstanding at 
   December 
   31, 2011 and June 30, 2011, respectively                                                              1           1 
  Common stock, $0.005 par value, 200,000,000 shares authorized and 76,790,281 and 
   76,203,574 
   shares issued and 75,533,928 and 76,202,921 shares outstanding at December 31, 2011 and 
   June 
   30, 2011, respectively                                                                              384         381 
  Additional paid-in capital                                                                     1,499,528   1,479,959 
  Accumulated deficit                                                                            (309,152)   (465,160) 
  Accumulated other comprehensive income (loss), net of income taxes                                24,110    (68,484) 
                                                                                              ------------  ---------- 
      Total Stockholders' Equity                                                                 1,214,871     946,697 
                                                                                              ------------  ---------- 
 
      Total Liabilities and Stockholders' Equity                                                $2,944,982  $2,798,860 
                                                                                              ============  ========== 
 

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED STATEMENTS OF OPERATIONS

(In Thousands, except per share information)

(Unaudited)

 
 
                                                                   Three Months Ended    Six Months Ended 
                                                                      December 31,          December 31, 
                                                                  --------------------  ------------------- 
                                                                    2011       2010       2011      2010 
                                                                  ---------  ---------  --------  --------- 
 
Revenues 
  Oil sales                                                        $309,347   $146,539  $556,264   $262,369 
  Natural gas sales                                                  31,231     27,414    69,197     55,584 
                                                                  ---------  ---------  --------  --------- 
      Total Revenues                                                340,578    173,953   625,461    317,953 
                                                                  ---------  ---------  --------  --------- 
 
Costs and Expenses 
  Lease operating                                                    74,134     44,446   145,167     88,599 
  Production taxes                                                    1,174        716     3,348      1,410 
  Gathering and transportation                                        3,395        801     9,548        822 
  Depreciation, depletion and amortization                           87,568     62,922   172,371    116,999 
  Accretion of asset retirement obligations                           9,803      6,348    19,491     12,322 
  General and administrative                                         22,147     15,786    41,468     34,383 
  Loss (gain) on derivative financial instruments                     4,371    (1,638)   (6,001)    (2,776) 
                                                                  ---------  --------- 
      Total Costs and Expenses                                      202,592    129,381   385,392    251,759 
                                                                  ---------  ---------  --------  --------- 
 
Operating Income                                                    137,986     44,572   240,069     66,194 
                                                                  ---------  ---------  --------  --------- 
 
Other Income (Expense) 
  Bridge loan commitment fees                                             -    (4,500)         -    (4,500) 
  Loss on retirement of debt                                              -    (5,184)         -    (5,184) 
  Other income                                                           15        151        24        161 
  Interest expense                                                 (28,363)   (22,094)  (55,551)   (43,574) 
                                                                  ---------  ---------  --------  --------- 
      Total Other Income (Expense)                                 (28,348)   (31,627)  (55,527)   (53,097) 
                                                                  ---------  ---------  --------  --------- 
 
Income Before Income Taxes                                          109,638     12,945   184,542     13,097 
 
Income Tax Expense                                                   12,549      2,011    21,122      2,030 
 
Net Income                                                           97,089     10,934   163,420     11,067 
Induced Conversion of Preferred Stock                                     -     19,796         -     19,796 
Preferred Stock Dividends                                             3,706      2,426     7,412      4,420 
                                                                  ---------  ---------  --------  --------- 
Net Income (Loss) Attributable to Common Stockholders               $93,383  $(11,288)  $156,008  $(13,149) 
                                                                  =========  ========= 
 
Net Income (Loss) Per Share Attributable to Common Stockholders 
  Basic                                                               $1.22    $(0.17)     $2.04    $(0.23) 
  Diluted                                                             $1.11    $(0.17)     $1.88    $(0.23) 
 
Weighted Average Number of Common Shares Outstanding 
  Basic                                                              76,498     65,479    76,481     58,241 
  Diluted                                                            87,227     65,479    87,138     58,241 
 

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

 
 
                                                                          Three Months Ended       Six Months Ended 
                                                                             December 31,            December 31, 
                                                                        ----------------------  ---------------------- 
                                                                          2011        2010        2011        2010 
                                                                        ---------  -----------  ---------  ----------- 
Cash Flows From Operating Activities 
  Net income                                                              $97,089      $10,934   $163,420      $11,067 
  Adjustments to reconcile net income to net cash provided by 
   (used in) operating activities: 
      Depreciation, depletion and amortization                             87,568       62,922    172,371      116,999 
      Deferred income tax expense                                          12,547        2,011     21,272        2,030 
      Change in derivative financial instruments 
         Proceeds from sale of derivative instruments                      15,931        8,522     65,529       42,577 
         Other - net                                                      (6,445)      (7,515)   (25,691)     (16,214) 
      Accretion of asset retirement obligations                             9,803        6,348     19,491       12,322 
      Amortization of deferred gain on debt and debt discount and 
       premium                                                                  -     (40,383)          -     (43,132) 
      Amortization and write-off of debt issuance costs                     1,882        2,492      3,705        4,254 
      Stock-based compensation                                              1,189          391     10,114        2,180 
      Payment of interest in-kind                                               -        2,225          -        2,225 
      Changes in operating assets and liabilities 
         Accounts receivable                                             (30,275)     (48,371)   (17,581)     (39,971) 
         Prepaid expenses and other current assets                          4,067        9,883    (5,066)      (2,278) 
         Settlement of asset retirement obligations                       (1,407)     (29,311)    (1,994)     (34,618) 
         Accounts payable and accrued liabilities                            (96)       19,354   (37,586)       20,012 
                                                                        ---------  -----------  ---------  ----------- 
            Net Cash Provided by (Used in) Operating Activities           191,853        (498)    367,984       77,453 
                                                                        ---------  -----------  ---------  ----------- 
Cash Flows from Investing Activities 
  Acquisitions                                                            (6,242)  (1,013,003)    (6,177)  (1,013,011) 
  Capital expenditures                                                  (125,695)     (65,090)  (238,444)    (128,625) 
  Insurance payments received                                               5,692            -      6,472            - 
  Proceeds from the sale of properties                                      2,767            -      2,767          400 
  Other                                                                   (1,062)          115      (808)           83 
                                                                        ---------  -----------  ---------  ----------- 
            Net Cash Used in Investing Activities                       (124,540)  (1,077,978)  (236,190)  (1,141,153) 
                                                                        ---------  -----------  ---------  ----------- 
Cash Flows from Financing Activities 
  Proceeds from the issuance of common and preferred stock, net of 
   offering costs                                                             310      555,773      9,456      560,903 
  Conversion of preferred stock to common                                       -     (11,912)          -     (11,912) 
  Dividends to shareholders                                               (3,706)        (179)    (7,412)      (2,173) 
  Proceeds from long-term debt                                            285,854    1,113,000    522,324    1,160,000 
  Payments on long-term debt                                            (288,084)    (520,838)  (604,318)    (586,767) 
  Payments for debt issuance costs and other                                (759)     (30,260)      (855)     (30,584) 
                                                                        ---------  -----------  ---------  ----------- 
            Net Cash Provided by (Used in) Financing Activities           (6,385)    1,105,584   (80,805)    1,089,467 
                                                                        ---------  -----------  ---------  ----------- 
 
Net Increase in Cash and Cash Equivalents                                  60,928       27,108     50,989       25,767 
 
Cash and Cash Equivalents, beginning of period                             18,468       12,883     28,407       14,224 
 
Cash and Cash Equivalents, end of period                                  $79,396      $39,991    $79,396      $39,991 
                                                                        =========  ===========  =========  =========== 
 

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED OPERATIONAL INFORMATION (In thousands) (Unaudited)

 
                                                                     Quarter Ended 
                                                ------------------------------------------------------ 
 
 Operating Highlights                            Dec. 31,   Sept. 30,   June 30,   Mar. 31,   Dec. 31, 
                                                   2011        2011       2011       2011       2010 
                                                ---------  ----------  ---------  ---------  --------- 
 Operating revenues 
  Crude oil sales                                $306,064    $249,767   $270,252   $233,081   $156,273 
  Natural gas sales                                21,659      28,138     31,875     32,193     18,301 
  Hedge gain (loss)                                12,855       6,978   (19,346)    (6,638)      (621) 
                                                ---------  ----------  ---------  ---------  --------- 
      Total revenues                              340,578     284,883    282,781    258,636    173,953 
                                                ---------  ----------  ---------  ---------  --------- 
 Percent of operating revenues from crude oil 
   Prior to hedge gain (loss)                         93%         90%        89%        88%        90% 
   Including hedge gain (loss)                        91%         87%        85%        84%        84% 
 Operating expenses 
   Lease operating expense 
      Insurance expense                             7,096       7,462      8,814      6,543      6,376 
      Workover and maintenance                     12,805       6,653     17,251      4,121      4,105 
      Direct lease operating expense               54,233      56,918     59,557     54,593     33,965 
                                                ---------  ----------  ---------  ---------  --------- 
       Total lease operating expense               74,134      71,033     85,622     65,257     44,446 
   Production taxes                                 1,174       2,174      1,205        721        716 
   Gathering and transportation                     3,395       6,153      6,868      4,809        801 
  DD&A                                             87,568      84,803     85,179     91,301     62,922 
   General and administrative                      22,147      19,321     17,553     23,155     15,786 
   Other - net                                     14,174       (684)      7,730      9,288      4,710 
                                                ---------  ----------  ---------  ---------  --------- 
   Total operating expenses                       202,592     182,800    204,157    194,531    129,381 
                                                ---------  ----------  ---------  ---------  --------- 
 Operating income                                $137,986    $102,083    $78,624    $64,105    $44,572 
                                                =========  ==========  =========  =========  ========= 
 Sales volumes per day 
      Natural gas (MMcf)                             72.8        77.0       83.0       84.6       53.7 
      Crude oil (MBbls)                              30.6        28.0       28.3       27.3       20.4 
      Total (MBOE)                                   42.7        40.8       42.1       41.4       29.4 
 Percent of sales volumes from crude oil              72%         69%        67%        66%        70% 
 Average sales price 
      Natural gas per Mcf                           $3.23       $3.97      $4.22      $4.23      $3.70 
      Hedge gain per Mcf                             1.43        1.39       1.37       1.28       1.85 
                                                ---------  ----------  ---------  ---------  --------- 
      Total natural gas per Mcf                     $4.66       $5.36      $5.59      $5.51      $5.55 
                                                =========  ==========  =========  =========  ========= 
      Crude oil per Bbl                           $108.80      $97.11    $105.12     $94.94     $83.14 
      Hedge gain (loss) per Bbl                      1.17      (1.11)    (11.53)     (6.67)     (5.18) 
                                                ---------  ----------  ---------  ---------  --------- 
      Total crude oil per Bbl                     $109.97      $96.00     $93.59     $88.27     $77.96 
                                                =========  ==========  =========  =========  ========= 
      Total hedge gain (loss) per BOE               $3.27       $1.86    $(5.05)    $(1.78)    $(0.23) 
                                                =========  ==========  =========  =========  ========= 
 Operating revenues per BOE                        $86.67      $75.91     $73.85     $69.46     $64.34 
                                                ---------  ----------  ---------  ---------  --------- 
 Operating expenses per BOE 
   Lease operating expense 
      Insurance expense                              1.81        1.99       2.30       1.76       2.36 
      Workover and maintenance                       3.26        1.77       4.51       1.11       1.52 
      Direct lease operating expense                13.80       15.17      15.55      14.66      12.56 
                                                ---------  ----------  ---------  ---------  --------- 
       Total lease operating expense                18.87       18.93      22.36      17.53      16.44 
    Production taxes                                 0.30        0.58       0.31       0.19       0.26 
   Gathering and transportation                      0.86        1.64       1.79       1.28       0.29 
  DD&A                                              22.28       22.60      22.24      24.52      23.27 
  General and administrative                         5.64        5.15       4.58       6.22       5.84 
  Other - net                                        3.60      (0.18)       2.01       2.49       1.74 
                                                ---------  ----------  ---------  ---------  --------- 
  Total operating expenses                          51.55       48.72      53.29      52.23      47.84 
                                                ---------  ----------  ---------  ---------  --------- 
 Operating income per BOE                          $35.12      $27.19     $20.56     $17.23     $16.50 
                                                =========  ==========  =========  =========  ========= 
 

Conference Call Tomorrow, Feb. 2, at 9 a.m. CDT, 3 p.m. London Time

Energy XXI will host its fiscal second-quarter conference call tomorrow, Feb. 2, at 9 a.m. CST (3 p.m. London time). The dial-in numbers are 1 (631) 813-4724 (U.S.) and (0) 80 0032 3836 (U.K.), and the confirmation code is 43357511. For complete instructions on how to actively participate in the conference call, or to listen to the live audio webcast or a replay, please refer to www.EnergyXXI.com.

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 adheres to the standard set by the Society of Petroleum Engineers. Bobby Poirrier Jr., Vice President of Corporate Development, a 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. To learn more, visit the Energy XXI website at www.EnergyXXI.com.

GLOSSARY

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.

MMcf/d - million cubic feet of gas per day.

Net Pay - cumulative hydrocarbon-bearing formations.

NRI, Net Revenue Interest - the percentage of production revenue allocated to the working interest after first deducting proceeds allocated to royalty and overriding interest.

TD - target total depth of a well.

WI, 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.

Enquiries of the Company

Energy XXI

Stewart Lawrence

Vice President, Investor Relations and Communications

713-351-3006

slawrence@energyxxi.com

Greg Smith

Director, Investor Relations

713-351-3149

gsmith@energyxxi.com

Seymour Pierce

Jonathan Wright - Corporate Finance

Richard Redmayne - Corporate Broking

Tel: +44 (0) 20 7107 8000

Pelham Bell Pottinger

James Henderson

jhenderson@pelhambellpottinger.co.uk

Mark Antelme

mantelme@pelhambellpottinger.co.uk

+44 (0) 20 7861 3232

This information is provided by RNS

The company news service from the London Stock Exchange

END

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