EPL Increases 2007 Capital Budget by $50 Million; Approves 2008 Budget

EPL's Board approved an increase in the 2007 capital budget from $300 million to $350 million. As previously indicated, the increased expenditures are being used to fund development costs as a result of exploration success and to provide the capital to fund leasehold costs as a result of the Company's recent high bids in the October MMS lease sale assuming the leases are awarded in 2007. EPL was high bidder on eight lease blocks on the Gulf of Mexico Shelf and in deepwater totaling $19.2 million of potential expenditures. To date, EPL has been awarded two leases, located in South Timbalier 57 and East Cameron 41, at a cost of $0.4 million.

The Company further announced that the Board approved an initial capital budget for 2008 of $200 million, which reflects the Company's plans to allocate a portion of next year's cash flow to debt repayment and the cash flow impact of the divestiture of EPL's onshore South Louisiana assets that closed in 2007. EPL also stated it is continuing to market a package of non-strategic Shelf assets, and any resulting sales proceeds will be used for debt pay down as well. The drilling component of the 2008 capital budget includes a mixture of moderate risk exploration wells and low risk development wells. The exploratory prospects within the budget include a combination of moderate and high potential targets.

Richard A. Bachmann commented, "Our initial budget includes an exciting slate of exploratory wells from our existing portfolio. Looking ahead to the first half of 2008, our plans will likely include an exploratory opportunity within our recent South Timbalier 46 discovery area, as well as a few exploratory opportunities within our successful Bay Marchand area to the north of South Timbalier. Also, we plan to initiate a pilot program within our East Bay asset base to enhance oil production through the drilling of two infill horizontal wells."

Bachmann continued, "We are committed to funding our 2008 capital program with internally generated funds and to debt repayment, and will continue to maintain a flexible approach to our spending plans to assure that we achieve that goal."