Energy XXI Announces Q2 Results
Energy XXI (Bermuda) Limited on Tuesday announced its 2nd Quarter results for the three months ended 31 December 2006.
* Production for the second quarter of fiscal 2007 averaged 15,700 barrels of oil equivalent per day (BOEP/D), an increase of 14% from the first quarter of fiscal 2007 average of 13,800 BOEP/D.
* Four successful exploration wells drilled during the first two quarters of fiscal 2007, including the following three discoveries: - The Oaks Estate LLC#1 (50% WI; Castex operated) logged 459 feet of true measured thickness of pay in 12 sands
* Drilled 2nd successful acceleration well,
* Production facilities being installed and first production projected to be 20 MMCF/D in March 2007 from the two wells - The Verda Ragen #1 (50% WI; Castex operated) logged 96 feet of true measured thickness of gas pay in two sands
* Production facilities being installed and first production projected to be 15 MMCF/D in April 2007 - The SL 19022 #1 well northwest of Rabbit Island (25% WI; Castex operated) logged 66 feet of true vertical thickness in one gas sand. This well will be tied into our Rabbit Island Central facilities during the fourth quarter.
* Five exploration wells currently being drilled, with two additional wells scheduled to spud in quarter ending March 31st
* Six new wells in our South Timbalier Area (100% WI); we completed three of these wells providing 1,930 BOEPD of production and have a fourth well scheduled for completion. In addition, through our workover program we have recompleted three existing wellbores, two as dual recompletions, with 1,900 BOEPD pending production.
* Agreement with Centurion Exploration Company gives the Company a 50% working interest in the Gridiron Project in South Louisiana, thereby providing additional exploration upside potential.
Financial (All dollar amounts are in US dollars)
* Oil and gas sales of $79.1 million, an increase of 20% over fiscal first quarter
* Net income of $10.4 million, compared to $1.9 million in the fiscal first quarter
* Proactive risk management strategy continues to pay dividends with clear hedge gains realized
* Net realized price of $54.71 per BOE versus $52.03 per BOE in the fiscal first quarter. Hedging activity added $7.19 per BOE to the net realized price in fiscal second quarter versus $1.68 per BOE in fiscal first quarter
* In early January, 2007, the Company entered into a global insurance settlement for all outstanding claims related to hurricanes Katrina and Rita for a total payment of $38.8 million to be realized during the fiscal third quarter
* The Company anticipates drilling 33 exploratory wells and 19 development wells during fiscal year 2007
* With the addition of the Gridiron Project and the acceleration of certain opportunities, the Company anticipates that total drilling spent during the last two quarters of fiscal 2007 will be approximately $150-175 million - This is compared to total drilling spent during the first two quarters of approximately $113 million, and means that total capital expenditure over fiscal 2007 will increase from the original forecast of $250 million.
* In South Timbalier there are currently two development wells drilling and four recompletions being hooked up to sales with anticipated production of 2,700 BOEPD net from these wells.
* Energy XXI continues to focus on further strategic acquisitions of companies and/or reserves already in production with operated offshore reserves around the world.
John Schiller, Chairman and Chief Executive Officer, commented:
"The second quarter saw continued operational success coupled with proactive risk management to support the strong financial results. Our aggressive drilling program is paying dividends, with four exploration successes out of seven South Louisiana exploration wells drilled. In addition; our South Timbalier drilling and workover programs continue to have a positive impact on production which will be coming online during the third quarter.
"We are excited about a number of potentially high impact wells currently drilling or due to be drilled in the near future as we progress the exploitation of our reserves and the further enhancement of Energy XXI's exploration portfolio."
Energy XXI is an independent oil and natural gas exploration and production company who emphasizes acquisitions as a significant part of their growth strategy. The Company's properties are primarily located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore.
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