"Our results for the recently completed quarter were affected by delays in bringing on new production and the shut-in of existing volumes due to weather and temporary operational issues, as we indicated previously," Energy XXI Chairman and CEO John Schiller said. "Those challenges were overcome in April as we executed the drilling and production-optimization programs and set new volume records. From our initial start-up of operations in April 2006, Energy XXI has grown rapidly through both acquisitions and the drill bit and today is producing more than 20,000 barrels of oil equivalent per day. We expect to continue advancing our growth strategy as we layer in the Pogo properties and carry out the organic capital program." For the fiscal third quarter, Energy XXI reported net income of $9.6 million, or $.11 per diluted share, on revenues of $77.6 million. Cash flow from operating activities totaled $76.2 million. For the same period last year, the company posted net income of $67,000.
The company's proactive risk-management strategy continued to pay dividends, resulting in a net realized price of $59.54 per barrel of oil equivalent (BOE) in the fiscal third quarter, including $7.95 per BOE contributed by hedging activity. Third-quarter production averaged 14,500 BOE per day. Prior-year fiscal third-quarter comparisons are not meaningful because the company had not yet established operations.
In January, the company finalized a global insurance settlement for all remaining claims related to hurricanes Katrina and Rita, resulting in the receipt of $38.8 million, virtually all of which was recorded during the fiscal third quarter as a reduction in accounts receivable.
During the fiscal third quarter, Energy XXI was successful in five of eight exploration wells and four of five development wells, while performing 11 workovers.
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 primarily located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore. In April 2007, Energy XXI announced an agreement to purchase Gulf of Mexico shelf properties from Pogo Producing Company.
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