Energy Partners Increases 2005 E&P Budget

Energy Partners, Ltd. has closed the previously announced acquisition of properties and reserves in south Louisiana for $146.0 million, after adjustments for the exercise of preferential rights by third parties and estimated closing adjustments. The acquisition is composed of nine fields, four of which are currently producing, with estimated proved reserves of 51.5 billion cubic feet of natural gas equivalent as of January 20, 2005. The Company also said that the borrowing base on its credit facility has been increased to $150 million. EPL utilized cash on hand and drew down $60 million from its credit facility to fund the acquisition.

In connection with the acquisition, EPL's board has approved a budget increase of $40 million to cover exploration and development expenditures related to the properties and prospects in the acquisition, bringing the overall 2005 exploration and development budget to $240 million. The Company has also recently entered into hedges covering 15,000 Mmbtu per day of natural gas with a floor of $5.00 and a cap of $10.00 per Mmbtu for the months of July through December in 2005. For 2006, new contracts are in place covering 15,000 Mmbtu of natural gas per day with a floor of $5.00 and a cap of $9.50 per Mmbtu.
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