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Current production estimated at 10,000 boepd, 50% oil in Central GOM, increasing combined oil production by approximately 50%
36.3 million barrels of oil equivalent of proved reserves that nearly doubles EPL's 1P reserves, 54% oil, 42% PDP, and 95% operated
Adds three oily Central GOM core areas that enhance operating synergies, with accretive cash flow metrics
Leverages EPL's proven strengths as an efficient exploiter of underdeveloped shelf assets and adds years to organic inventory
Fully underwritten financing as a result of EPL's underlevered balance sheet, strong credit quality and free cash flow potential
NEW ORLEANS, Sept. 17, 2012 (GLOBE NEWSWIRE) -- EPL Oil & Gas, Inc. (EPL or the Company) (NYSE:EPL) today announced it has executed a purchase and sale agreement to acquire certain shallow water Gulf of Mexico (GOM) shelf oil and natural gas interests from Hilcorp Energy GOM Holdings, LLC (Hilcorp) for $550 million.
The assets are currently producing approximately 10,000 barrels of oil equivalent (boe) per day, about 50% of which are oil. Estimated proved reserves as of the July 1, 2012 economic effective date totaled approximately 36.3 million boe, 54% of which are oil. The properties include three fields that Hilcorp had acquired from Chevron Corporation in Ship Shoal Block 208, South Pass 78, and South Marsh Island 239, which are all on the Central GOM shelf in the vicinity of EPL's existing core field areas. These three fields account for 64% of the current proved reserves, and approximately 82% of the total proved acquisition PV10 value estimated at $626 million using strip prices as of August 31, 2012 (see discussion of PV10 in appendix). The currently estimated asset retirement obligation to be assumed by EPL in the acquisition is expected to total approximately $120 million.