Endeavour Reports Loss for 2005

Endeavour International Corporation announced fourth-quarter and full-year financial and operational results. A loss of $31.4 million, or $0.42 per diluted share, which includes $17.4 million for the effect of impairment of oil and gas properties, litigation settlement and gains on asset sales, was recorded for the year as compared to a loss of $23.4 million or $0.37 per diluted share for the full- year 2004. Revenues for the year were $38.7 million, up from $3.7 million the previous year. The average oil price per barrel for the year was $52.08 as compared to $40.38 per barrel for 2004. Production for the year was 756,200 barrels of oil equivalent (BOE), reflecting a full year of production from the Norwegian assets purchased late in 2004. Total proved reserves for the company as of December 31, 2005 were 2.2 million BOE.

"In only our second year as a company, we accomplished much in building a North Sea-focused company with assets, people and tools that will be successful over time," said William L. Transier, co-chief executive officer of the company. "Although our Norwegian assets performed better than expected due to higher commodity prices, our year-end results were negatively impacted by unsuccessful exploration drilling. We are steadfast in our belief that our exploration campaign will yield positive results and that our business model will create substantial future value."

For the fourth quarter 2005, the company reported a loss of $25.6 million or $0.34 per diluted share, which includes $23.0 million for the effect of impairment of oil and gas properties and litigation settlement, as compared to a loss of $4.5 million or $0.06 per diluted share the same quarter in 2004. Revenues for the period were $11.0 million, and production was 205,000 barrels of oil equivalent (BOE). The average oil price for the quarter was $54.17 per barrel.

"Although we did not make a commercial discovery in 2005, our exploration activity laid the foundation for a larger and improved portfolio that will benefit our ongoing drilling campaign," added John N. Seitz, co-chief executive officer. "We already have one well underway and our pool of developing prospects for the next two years will provide an opportunity to create significant value for our stockholders."

    Significant events for the company during the year included:

     * Participated in license rounds in the UK and Norway that
       increased total leasehold position to 1.8 million acres -- In 2005,
       Endeavour was awarded 11 production licenses encompassing 17 blocks
       during the 23rd Seaward Licensing Round held by the UK Department of
       Trade and Industry.  This added to the nine licenses and 18 blocks
       awarded in 2004.  Six of the new licenses cover six blocks in the
       Central North Sea with Endeavour serving as operator of three of the
       blocks.  The company was also named operator of six blocks on two
       licenses in the Inner Moray Firth. The remaining three licenses
       (comprising five blocks) are located in the Southern Gas Basin with
       Endeavour serving as operator of two blocks.  Total gross acreage held
       by the company in the UK Continental Shelf is now 1.3
       million acres. In Norway, Endeavour holds interests in 11 production
       licenses, two of which were awarded in December as part of the 2005
       Awards in Predefined Areas process.  Total gross acreage in the
       Norwegian Continental Shelf comprises approximately 500,000 acres of
       Endeavour's portfolio.
     * Launched multiple-well exploratory campaign -- In 2005, Endeavour
       drilled four exploratory wells, with the company acting as operator of
       two of the wells. The four wells were plugged and abandoned when they
       did not encounter commercial hydrocarbons.  In early February, drilling
       operations began on the company's fifth well, the Cygnus prospect on
       Block 44/12, as part of a farm-in agreement covering blocks 44/11 and
       44/12 in the Southern North Sea. The prospect is located in a prolific
       part of the basin northwest of the Hawksley gas field. The company
       holds a 12.5 percent working interest in the blocks. Endeavour has
       obtained two drilling slots on the Global Santa Fe 140, a semisubmersible rig, and will operate two wells in the second half of the
       year that are expected to be drilled in the UKCS Central Graben region.
       Other wells will be drilled as technical and partnership details and
       rig arrangements are finalized.
     * Expanded role in Norway as an operator and explorer -- After an
       extensive evaluation by the Ministry of Petroleum and Energy of its
       technical; operational; and health, safety and environmental
       competencies, Endeavour Energy Norge AS was notified of its prequalification as an operator in the NCS in November.  That was followed
       by the award of an operating interest in a production license in the
       greater Ekofisk area located in the southernmost part of the Norwegian
       sector of the North Sea.  To ensure its ability to fulfil its role as
       an operator, the company joined with several other operators in the NCS
       to form a consortium that has entered into a contract for the use of a
       drilling rig for a three-year period beginning the second half of 2006.
       Endeavour is committed to two rig slots in late 2007 and 2008 as its
       part of the contract with Dolphin AS, a subsidiary of Fred Olsen Energy
       ASA. Drilling will be conducted by the Bredford Dolphin, a semi
       submersible drilling rig.
     * Acquired interest in a field under development that will deliver first
       production from the UK -- Late in the year, Endeavour entered into a
       definitive agreement to purchase an eight percent interest in the Enoch
       Field, one of the first discoveries to be developed along the median
       line between the UK and Norway. The company's net share of
       daily production, slated to begin in late 2006, is expected to be
       approximately 1,000 barrels of oil equivalent.
     * Continued effort to optimize production from existing Norwegian
       assets -- Production from the company's Njord and Brage interests
       remained stable throughout the year at approximately 2,000 barrels of
       oil equivalent.  Development wells were drilled in both fields to
       offset natural declines in existing wells and extend the life of the
       assets.  Although volumes are forecast to decline somewhat over the
       next two years, an upgrading of facilities in the Njord field will
       allow for a significant increase in the production of natural gas
       beginning in late 2007 and other development wells will be drilled to
       maintain oil volumes from both facilities.

Company: Endeavour International Corporation more info
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