TIDMEXXS
RNS Number : 2418Y
Energy XXI (Bermuda) Limited
20 December 2010
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
Energy XXI
Stewart Lawrence
Vice President, Investor Relations and Communications
713-351-3006
slawrence@energyxxi.com
Seymour Pierce - UK AIM Adviser
Jonathan Wright/
Jeremy Porter - 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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