This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Energy XXI Reports Audited Fiscal Year-End Results And Provides Operational Update

ENERGY XXI (BERMUDA) LIMITED RECONCILIATION OF GAAP TO NON-GAAP MEASURES (In Thousands, except per share information) (Unaudited)

As required under Regulation G of the Securities Exchange Act of 1934, provided below are reconciliations of net income to the following non-GAAP financial measure: Adjusted EBITDA. The company uses this non-GAAP measure as a key metric for the management of the company and to demonstrate the company's ability to internally fund capital expenditures and service debt.

  Quarter Ended June 30, Year Ended June 30,
  2012 2011 2012 2011
         
Net Income as Reported $81,155 $35,217 $335,827 $64,655
         
Total other expense 26,494 35,307 108,811 132,006
Depreciation, depletion and amortization 106,644 85,179 367,463 293,479
Duplicate June 2011 Insurance Expense 2,143 2,143
Income tax expense (benefit) 8,761 8,100 38,646 12,262
         
Adjusted EBITDA $223,054 $165,946 $850,747 $504,545
         
Adjusted EBITDA Per Share        
Basic $2.83 $2.21 $11.00 $7.60
Diluted $2.82 $2.21 $10.96 $7.59
         
Weighted Average Number of Common Shares Outstanding        
Basic 78,840 74,986 77,310 66,356
Diluted 79,199 75,079 77,614 66,459
ENERGY XXI (BERMUDA) LIMITED CONSOLIDATED BALANCE SHEETS (In Thousands, except share information )
 
  June 30,
ASSETS 2012 2011
Current Assets    
Cash and cash equivalents $117,087 $28,407
Accounts receivable    
Oil and natural gas sales 126,107 126,194
Joint interest billings 3,840 4,526
Insurance and other 5,420 2,533
Prepaid expenses and other current assets 63,029 47,751
Derivative financial instruments 32,497 22
Total Current Assets 347,980 209,433
Property and Equipment    
Oil and natural gas properties - full cost method of accounting, including $418.8 million and $467.3 million of unevaluated properties not being amortized at June 30, 2012 and 2011, respectively 2,698,213 2,545,336
Other property and equipment 9,533 8,201
Total Property and Equipment, net of accumulated depreciation, depletion, amortization and impairment 2,707,746 2,553,537
Other Assets    
Derivative financial instruments 45,496
Deferred income taxes 2,411
Debt issuance costs, net of accumulated amortization and other assets 29,725 33,479
Total Other Assets 75,221 35,890
Total Assets $3,130,947 $2,798,860
LIABILITIES    
Current Liabilities    
Accounts payable 156,959 $163,741
Accrued liabilities 118,818 111,157
Notes payable 22,211 19,853
Asset retirement obligations 34,457 19,624
Derivative financial instruments 50,259
Current maturities of long-term debt 4,284 4,054
Total Current Liabilities 336,729 368,688
Long-term debt, less current maturities 1,014,060 1,109,333
Deferred income taxes 104,280
Asset retirement obligations 266,958 303,618
Derivative financial instruments 70,524
Other liabilities 3,080
Total Liabilities 1,725,107 1,852,163
Stockholders' Equity    
Preferred stock, $0.001 par value, 7,500,000 and 2,500,000 shares authorized at June 30, 2012 and 2011, respectively    
7.25% Convertible perpetual preferred stock, 8,000 shares issued and outstanding at June 30, 2012 and 2011, respectively
5.625% Convertible perpetual preferred stock, 814,117 and 1,050,000 shares issued and outstanding at June 30, 2012 and 2011, respectively 1 1
Common stock, $0.005 par value, 200,000,000 shares authorized and 79,147,340 and 76,203,574 shares issued and 78,837,697 and 76,202,921 shares outstanding at June 30, 2012 and 2011, respectively 396 381
Additional paid-in capital 1,501,785 1,479,959
Accumulated deficit (153,945) (465,160)
Accumulated other comprehensive income (loss), net of income taxes 57,603 (68,484)
Total Stockholders' Equity 1,405,840 946,697
Total Liabilities and Stockholders' Equity $3,130,947 $2,798,860
ENERGY XXI (BERMUDA) LIMITED CONSOLIDATED STATEMENTS OF INCOME (In Thousands, except per share information)
 
  Quarter Ended June 30, Year Ended June 30,
  2012 2011 2012 2011
  (unaudited) (unaudited)    
Revenues        
Crude oil sales $317,653 $240,603 $1,186,631 $719,683
Natural gas sales 24,293 42,178 116,772 139,687
Total Revenues 341,946 282,781 1,303,403 859,370
         
Costs and Expenses        
Lease operating expense 87,201 85,622 310,815 239,478
Production taxes 2,414 1,205 7,261 3,336
Gathering and transportation 4,358 6,868 16,371 12,499
Depreciation, depletion and amortization 106,644 85,179 367,463 293,479
Accretion of asset retirement obligations 9,908 9,898 39,161 32,127
General and administrative expense 19,733 17,553 86,276 75,091
(Gain) Loss on derivative financial instruments (4,722) (2,168) (7,228) (5,563)
Total Costs and Expenses 225,536 204,157 820,119 650,447
         
Operating Income  116,410 78,624 483,284 208,923
         
Other Income (Expense)        
Bridge loan commitment fees (4,500)
Loss on retirement of debt (4,472) (21,855)
Interest income and other (50) 22 71 198
Interest expense (26,444) (30,857) (108,882) (105,849)
Total Other Expense (26,494) (35,307) (108,811) (132,006)
         
Income Before Income Taxes 89,916 43,317 374,473 76,917
         
Income Tax Expense 8,761 8,100 38,646 12,262
         
Net Income 81,155 35,217 335,827 64,655
Induced Conversion of Preferred Stock 10 4,508 6,068 24,348
Preferred Stock Dividends 2,877 3,902 13,028 12,600
Net Income Available for Common Stockholders $78,268 $26,807 $316,731 $27,707
         
Earnings per Share        
Basic $0.99 $0.36 $4.10 $0.42
Diluted $0.93 $0.36 $3.85 $0.42
         
Weighted Average Number of Common Shares Outstanding        
Basic 78,840 74,986 77,310 66,356
Diluted 87,278 75,079 87,208 66,459
ENERGY XXI (BERMUDA) LIMITED CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands)
 
  Quarter Ended June 30, Year Ended June 30,
  2012 2011 2012 2011
Cash Flows From Operating Activities (unaudited) (unaudited)    
Net income $81,155 $35,217 $335,827 $64,655
Adjustments to reconcile net income to net cash provided by (used in) operating activities:        
Depreciation, depletion and amortization 106,644 85,179 367,463 293,479
Deferred income tax expense 8,760 8,007 38,796 12,169
Change in derivative financial instruments        
Proceeds from sale of derivative instruments 66,522 42,577
Other – net (15,598) (11,060) (52,155) (37,047)
Accretion of asset retirement obligations 9,908 9,898 39,161 32,127
Amortization of debt discount and premium   (43,521)
Amortization and write-off of debt issuance costs and other 1,968 4,950 7,559 15,772
Stock-based compensation 1,168 1,317 11,760 4,443
Payment of interest in-kind   2,225
Changes in operating assets and liabilities        
Accounts receivable 22,151 4,958 (4,995) (49,745)
Prepaid expenses and other current assets (20,769) (21,711) (15,890) (13,272)
Settlement of asset retirement obligations (8,427) (19,819) (14,990) (73,974)
Accounts payable and accrued liabilities 32,372 67,081 6,456 137,837
Net Cash Provided by Operating Activities 219,332 164,017 785,514 387,725
Cash Flows from Investing Activities        
Acquisitions (189) 9,862 (6,401) (1,012,262)
Capital expenditures (176,482) (91,037) (570,670) (281,233)
Insurance payments received   6,472
Proceeds from the sale of properties (220) 37,956 2,750 38,431
Other (2,188) (39) (1,744) (8)
Net Cash Used in Investing Activities (179,079) (43,258) (569,593) (1,255,072)
Cash Flows from Financing Activities        
Proceeds from the issuance of common and preferred stock, net of offering costs 192 22 9,839 562,112
Conversion of preferred stock to common (11) (1) (6,040) (11,957)
Dividends to shareholders (8,393) (3,987) (18,682) (12,313)
Proceeds from long-term debt 188,956 291,302 896,717 1,829,828
Payments on long-term debt (189,513) (411,339) (1,008,300) (1,456,190)
Debt issuance costs   (1,470) (29,614)
Other 79 15 (775) (336)
Net Cash Provided by (Used in) Financing Activities (8,690) (125,458) (127,241) 881,530
         
Net Increase (Decrease) in Cash and Cash Equivalents 31,563 (4,699) 88,680 14,183
         
Cash and Cash Equivalents, beginning of period 85,524 33,106 28,407 14,224
         
Cash and Cash Equivalents, end of period $117,087 $28,407 $117,087 $28,407
  Year Ended June 30,
Operating Highlights 2012 2011 2010 2009 2008
  (In Thousands, Except per Unit Amounts)
Operating revenues          
Crude oil sales $1,186,193 $777,869 $383,928 $278,014 $484,552
Natural gas sales 88,608 101,815 69,399 113,156 237,628
Hedge gain (loss) 28,602 (20,314) 45,604 42,660 (78,948)
Total revenues 1,303,403 859,370 498,931 433,830 643,232
Percent of operating revenues from crude oil          
Prior to hedge gain (loss)  93% 88% 85% 71% 67%
Including hedge gain (loss) 91% 84% 78% 68% 62%
Operating expenses          
Lease operating expense          
Insurance expense 28,521 27,876 27,603 19,188 18,218
Workover and maintenance 56,413 33,095 19,630 15,930 22,397
Direct lease operating expense 225,881 178,507 95,379 87,032 102,244
Total lease operating expense 310,815 239,478 142,612 122,150 142,859
Production taxes 7,261 3,336 4,217 5,450 8,686
Gathering and transportation 16,371 12,499  —  —  —
Depreciation, depletion and amortization 367,463 293,479 181,640 217,207 307,389
Impairment of oil and gas properties  —  —  — 576,996  —
General and administrative 86,276 75,091 49,667 24,756 26,450
Other – net 31,933 26,564 18,748 4,488 14,248
Total operating expenses 820,119 650,447 396,884 951,047 499,632
Operating income (loss) $483,284 $208,923 $102,047 $(517,217) $143,600
Sales volumes per day          
Natural gas (MMcf) 81.5 67.2 42.6 47.9 75.7
Crude oil (MBbls) 30.5 23.4 14.7 11.4 13.5
Total (MBOE) 44.1 34.6 21.8 19.3 26.2
Percent of sales volumes from crude oil 69% 68% 67% 59% 52%
Average sales price          
Natural gas per Mcf $2.97 $4.15 $4.47 $6.48 $8.57
Hedge gain per Mcf 0.94 1.54 2.68 1.60 0.34
Total natural gas per Mcf $3.91 $5.69 $7.15 $8.08 $8.91
           
Crude oil per Bbl $106.17 $90.95 $71.73 $67.06 $97.72
Hedge gain (loss) per Bbl 0.04 (6.80) 0.75 3.56 (17.82)
Total crude oil per Bbl $106.21 $84.15 $72.48 $70.62 $79.90
Total hedge gain (loss) per BOE $1.77 $(1.61) $5.74 $6.04 $(8.24)
Operating revenues per BOE $80.74 $67.98 $62.83 $61.47 $67.16
Operating expenses per BOE          
Lease operating expense          
Insurance expense 1.77 2.21 3.48 2.72 1.90
Workover and maintenance 3.49 2.62 2.47 2.26 2.34
Direct lease operating expense 13.99 14.12 12.01 12.33 10.68
Total lease operating expense per BOE 19.25 18.95 17.96 17.31 14.92
Production taxes 0.45 0.26 0.53 0.77 0.91
Impairment of oil and gas properties  —  —  — 81.75  —
Gathering and transportation 1.01 0.98  —  —  —
Depreciation, depletion and amortization 22.76 23.22 22.87 30.78 32.09
General and administrative 5.34 5.94 6.25 3.51 2.76
Other – net 1.98 2.10 2.36 0.64 1.49
Total operating expenses per BOE 50.79 51.45 49.97 134.76 52.17
Operating income (loss) per BOE $29.95 $16.53 $12.86 $(73.29) $14.99
   
Quarter Ended
Operating Highlights June 30, 2012 Mar. 31, 2012 Dec. 31, 2011 Sept. 30, 2011 June 30, 2011
  (In Thousands, Except per Unit Amounts)
Operating revenues          
Crude oil sales $314,639 $315,723 $306,064 $249,767 $270,252
Natural gas sales 19,657 19,154 21,659 28,138 31,875
Hedge gain (loss) 7,650 1,119 12,855 6,978 (19,346)
Total revenues 341,946 335,996 340,578 284,883 282,781
Percent of operating revenues from crude oil          
 Prior to hedge gain (loss) 94% 94% 93% 90% 89%
 Including hedge gain (loss) 92% 93% 91% 87% 85%
Operating expenses          
 Lease operating expense          
Insurance expense 6,825 7,138 7,096 7,462 8,814
Workover and maintenance 21,070 15,885 12,805 6,653 17,251
Direct lease operating expense 59,306 55,424 54,233 56,918 59,557
 Total lease operating expense 87,201 78,447 74,134 71,033 85,622
 Production taxes 2,414 1,499 1,174 2,174 1,205
Gathering and transportation 4,358 2,465 3,395 6,153 6,868
DD&A 106,644 88,448 87,568 84,803 85,179
 General and administrative 19,733 25,075 22,147 19,321 17,553
 Other – net 5,186 13,257 14,174 (684) 7,730
 Total operating expenses 225,536 209,191 202,592 182,800 204,157
Operating income $116,410 $126,805 $137,986 $102,083 $78,624
Sales volumes per day          
Natural gas (MMcf) 92.5 83.7 72.8 77.0 83.0
Crude oil (MBbls) 32.2 31.4 30.6 28.0 28.3
Total (MBOE) 47.6 45.3 42.7 40.8 42.1
Percent of sales volumes from crude oil 68% 69% 72% 69% 67%
           
Average sales price          
Natural gas per Mcf $2.34 $2.52 $3.23 $3.97 $4.22
Hedge gain per Mcf 0.55 0.54 1.43 1.39 1.37
Total natural gas per Mcf $2.89 $3.06 $4.66 $5.36 $5.59
Crude oil per Bbl $107.34 $110.54 $108.80 $97.11 $105.12
Hedge gain (loss) per Bbl 1.03 (1.05) 1.17 (1.11) (11.53)
Total crude oil per Bbl $108.37 $109.49 $109.97 $96.00 $93.59
Total hedge gain (loss) per BOE $1.77 $0.27 $3.27 $1.86 $(5.05)
           
Operating revenues per BOE $78.90 $81.43 $86.67 $75.91 $73.85
Operating expenses per BOE          
 Lease operating expense          
Insurance expense 1.57 1.73 1.81 1.99 2.30
Workover and maintenance 4.86 3.85 3.26 1.77 4.51
Direct lease operating expense 13.68 13.43 13.80 15.17 15.55
 Total lease operating expense per BOE 20.11 19.01 18.87 18.93 22.36
 Production taxes 0.56 0.36 0.30 0.58 0.31
Gathering and transportation 1.01 0.60 0.86 1.64 1.79
DD&A 24.61 21.44 22.28 22.60 22.24
General and administrative 4.55 6.08 5.64 5.15 4.58
Other – net 1.20 3.22 3.60 (0.18) 2.01
Total operating expenses per BOE 52.04 50.71 51.55 48.72 53.29
Operating income per BOE $26.86 $30.72 $35.12 $27.19 $20.56

ENERGY XXI (BERMUDA) LIMITED CONSOLIDATED COSTS INCURRED, CAPITAL EXPENDITURES AND PROVED RESERVES (Unaudited)

  Year Ended June 30,
  2012 2011 2010
  (In Thousands)
Oil and Gas Activities      
 Exploration costs $183,397 $98,133 $51,030
 Development costs 383,495 180,191 92,949
 Total 566,892 278,324 143,979
Administrative and Other 3,778 2,909 1,133
 Total capital expenditures 570,670 281,233 145,112
Property acquisitions      
 Proved 6,401 722,551 250,795
 Unproved 289,711 42,242
 Total acquisitions 6,401 1,012,262 293,037
Asset retirement obligations, insurance proceeds and other – net (55,399) 205,702 17,996
 Total costs incurred $521,672 $1,499,197 $456,145

 

  Crude Oil Natural Gas Total
  (MBbls) (MMcf) (MBOE)
Proved reserves at June 30, 2009  30,873 133,415 53,109
 Production  (5,352) (15,534) (7,941)
 Extensions and discoveries  698 5,637 1,638
 Revisions of previous estimates 3,643 7,403 4,877
 Purchases of minerals in place 17,621 37,862 23,931
Proved reserves at June 30, 2010 47,483 168,783 75,614
 Production  (8,553) (24,533) (12,642)
 Extensions and discoveries  3,056 39,555 9,649
 Revisions of previous estimates  2,155 (43) 2,148
 Reclassification of proved undeveloped (2,917) (4,579) (3,681)
 Purchases of minerals in place 37,115 97,591 53,380
 Sales of reserves (1,133) (40,458) (7,876)
Proved reserves at June 30, 2011 77,206 236,316 116,592
 Production  (11,172) (29,824) (16,143)
 Extensions and discoveries  11,444 27,821 16,081
 Revisions of previous estimates  9,098 (23,281) 5,217
 Reclassification of proved undeveloped (1,783) (2,042) (2,123)
Proved reserves at June 30, 2012 84,793 208,990 119,624
       
Proved developed reserves      
 June 30, 2009  20,183 82,432 33,922
 June 30, 2010  36,970 93,610 52,572
 June 30, 2011  59,234 134,024 81,572
 June 30, 2012  63,308 110,810 81,693
       
Proved undeveloped reserves      
 June 30, 2009  10,690 50,983 19,187
 June 30, 2010  10,513 75,173 23,042
 June 30, 2011  17,972 102,292 35,020
 June 30, 2012  21,485 98,680 37,931

CONFERENCE CALL TOMORROW, AUG. 9, AT 9 A.M. CDT, 3 P.M. LONDON TIME

Energy XXI will host its year-end conference call tomorrow, Aug. 9, at 9 a.m. CDT (3 p.m. London time). The dial-in numbers are 1 (631) 813-4724 (U.S.) and (0) 80 0032 3836 (U.K.), and the confirmation code is 98235588. For complete instructions on how to actively participate in the conference call, or to listen to the live audio webcast or a replay, please refer to www.EnergyXXI.com

COPIES OF ANNUAL REPORT

A copy of the company's annual report will be posted to shareholders in due course and a copy will be available on the company's website at www.EnergyXXI.com .

Forward-Looking Statements

All statements included in this release relating to future plans, projects, events or conditions and all other statements other than statements of historical fact included in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions, including changes in long-term oil and gas prices or other market conditions affecting the oil and gas industry, reservoir performance, the outcome of commercial negotiations and changes in technical or operating conditions, among others, that could cause actual results, including project plans and related expenditures and resource recoveries, to differ materially from those described in the forward-looking statements. Energy XXI assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.

Competent Person Disclosure

The technical information contained in this announcement relating to operations adheres to the standard set by the Society of Petroleum Engineers. Bobby Poirrier Jr., Vice President of Corporate Development, a registered Petroleum Engineer, is the qualified person who has reviewed and approved the technical information contained in this announcement.

About the Company

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 located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore. Seymour Pierce is Energy XXI's listing broker in the United Kingdom.   To learn more, visit the Energy XXI website at www.EnergyXXI.com .

The Energy XXI logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3587

Glossary

Barrel – unit of measure for oil and petroleum products, equivalent to 42 U.S. gallons.

BOE – barrels of oil equivalent, used to equate natural gas volumes to liquid barrels at a general conversion rate of 6,000 cubic feet of gas per barrel.

BOE/d – barrels of oil equivalent per day.

Field – an area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

MBBL – thousand barrels of oil.

MBOE – thousand barrels of oil equivalent.

CF – thousand cubic feet of gas.

MMBOE – million barrels of oil equivalent.

MMBTU – million British thermal units.

MMCF – million cubic feet of gas.

PV10 – the estimated present value of the resource, discounted at a 10 percent annual rate.

CONTACT: ENQUIRIES OF THE COMPANY
         
         Energy XXI
         Stewart Lawrence
         Vice President, Investor Relations and Communications
         713-351-3006
         slawrence@energyxxi.com
         Greg Smith
         Director, Investor Relations
         713-351-3149
         gsmith@energyxxi.com
         
         Seymour Pierce
         Nominated Adviser: Jonathan Wright
         Corporate Broking: Richard Redmayne
         Tel: +44 (0) 20 7107 8000
         
         Pelham Bell Pottinger
         James Henderson
         jhenderson@pelhambellpottinger.co.uk
         Mark Antelme
         mantelme@pelhambellpottinger.co.uk
         +44 (0) 20 7861 3232
         Pelham Bell Pottinger
         James Henderson
         jhenderson@pelhambellpottinger.co.uk
         Mark Antelme
         mantelme@pelhambellpottinger.co.uk
         +44 (0) 20 7861 3232

Energy XXI Logo 2

4 of 4

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,293.87 +27.88 0.16%
S&P 500 2,010.11 -1.25 -0.06%
NASDAQ 4,575.0790 -18.3460 -0.40%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs