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 Fiscal Second-Quarter Results

Stocks in this article: EXXI

Approximately 65 miles south of Lomond North, completion activities have commenced on the Davy Jones offset well (15.8% WI/12.5% NRI). Flow testing of the well is expected in the first half of calendar 2014.

The Lineham Creek exploration well (9% WI/ 6.75% NRI), located onshore in Cameron Parish, Louisiana, has been suspended while future plans are being developed.

SHARE REPURCHASE PROGRAM

As previously announced in May 2013, the company's Board of Directors approved the repurchase of the company's common shares up to a value of $250 million, plus an additional $76 million share repurchase associated with the issuance of preferred convertible notes in November 2013. To date, repurchased shares totaled 9,415,563 at a cost of $242.9 million, or an average price per share of $25.80, totaling approximately 12 percent of the company's stock outstanding at the beginning of the program. Following these purchases, the company has a total of 70,322,050 shares outstanding.

CAPITAL EXPENDITURES

During the 2014 fiscal second quarter, capital expenditures totaled $189.9 million, with $50.1 million in exploration and $139.8 million in development and other costs. In addition, acquisition expenditures for the quarter totaled $12.5 million. Capital expenditures for fiscal 2014 are estimated at $705 million, excluding acquisitions.

CONFERENCE CALL TOMORROW, FEB. 7, AT 9 A.M. CST, 3 P.M. LONDON TIME

Energy XXI will host its fiscal second-quarter conference call tomorrow, Feb. 7, at 9 a.m. CST (3 p.m. London time). The dial-in numbers are 1 (631) 813-4724 (U.S.) and (0) 800 028 8438 (U.K.), and the confirmation code is 34659187. 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 .

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.

  Three Months Ended Six Months Ended
  December 31, December 31,
  2013 2012 2013 2012
         
Net Income as Reported $10,495 $41,332 $53,634 $59,592
Preferred stock dividends 2,872 2,874 5,745 5,749
Net Income Available for Common  Stockholders 7,623 38,458 47,889 53,843
         
Interest expense and other income-net 37,728 26,569 66,891 52,755
Depreciation, depletion and amortization 103,513 105,856 203,729 190,651
Income tax expense 10,658 25,020 35,994 35,730
         
EBITDA $159,522 $195,903 $354,503 $332,979
         
Loss from equity method investments   2,621  616  4,414  2,111
         
Adjusted EBITDA  $162,143 $196,519  $358,917  $335,090
         
Adjusted EBITDA Per Share        
Basic $2.19 $2.48 $4.79 $4.23
Diluted $2.19 $2.25 $4.79 $4.22
         
Weighted Average Number of Common Shares Outstanding        
 Basic 73,964 79,314 74,873 79,238
 Diluted 74,053 87,468 74,956 79,367
         
     
ENERGY XXI (BERMUDA) LIMITED  
CONSOLIDATED BALANCE SHEETS
(In Thousands, except share information)
     
  December 31, June 30,
  2013 2013
  (Unaudited)  
Current Assets    
Cash and cash equivalents $357,828  $—
Restricted cash 746
Accounts receivable    
Oil and natural gas sales 130,398 132,521
Joint interest billings 5,647 9,505
Insurance and other 7,424 6,745
Prepaid expenses and other current assets 45,603 50,738
Derivative financial instruments 7,731 38,389
Total Current Assets 555,377 237,898
Property and Equipment    
Oil and natural gas properties - full cost method of accounting, including $251.4 million and $422.6 million of unevaluated properties not being amortized at December 31, 2013 and June 30, 2013, respectively 3,523,881 3,289,505
Other property and equipment 16,582 17,003
Total Property and Equipment, net of accumulated depreciation, depletion, amortization and impairment 3,540,463 3,306,508
Other Assets    
Derivative financial instruments 501 21,926
Equity investments 18,440 12,799
Debt issuance costs, net of accumulated amortization and other assets 46,927 32,580
Total Other Assets 65,868 67,305
Total Assets $4,161,708 $3,611,711
LIABILITIES    
Current Liabilities    
Accounts payable 196,652 $219,610
Accrued liabilities 77,411 105,192
Notes payable 10,288 22,524
Deferred income taxes 20,517
Asset retirement obligations 29,911 29,500
Derivative financial instruments 1,820 40
Current maturities of long-term debt 12,843 19,554
Total Current Liabilities 328,925 416,937
Long-term debt, less current maturities 1,999,086 1,350,491
Deferred income taxes 177,497 140,804
Asset retirement obligations 277,173 258,318
Derivative financial instruments 932
Other liabilities 11,907 7,915
Total Liabilities 2,795,520 2,174,465
Commitments and Contingencies    
Stockholders' Equity    
Preferred stock, $0.001 par value, 7,500,000 shares authorized at December 31, 2013 and June 30, 2013, respectively    
7.25% Convertible perpetual preferred stock, 8,000 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively
5.625% Convertible perpetual preferred stock, 812,760 and 813,188 shares issued and outstanding at December 31, 2013 and June 30, 2013, respectively 1 1
Common stock, $0.005 par value, 200,000,000 shares authorized and 79,693,213 and 79,425,473 shares issued and 71,513,450 and 76,485,910 shares outstanding at December 31, 2013 and June 30, 2013, respectively 398 397
Additional paid-in capital 1,581,664 1,512,311
Retained earnings (deficit) 739 (29,352)
Accumulated other comprehensive income (loss), net of income taxes (4,456) 26,552
Treasury stock, at cost, 8,179,100 and 2,938,900 shares at December 31, 2013 and June 30, 2013, respectively (212,158) (72,663)
Total Stockholders' Equity 1,366,188 1,437,246
Total Liabilities and Stockholders' Equity $4,161,708 $3,611,711
     
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, except per share information)
(Unaudited)
     
  Three Months Six Months
  Ended December 31, Ended December 31,
  2013 2012 2013 2012
Revenues        
Crude oil sales $262,230 $285,824 $551,459 $533,154
Natural gas sales 34,586 34,695 69,949 57,592
Total Revenues 296,816 320,519 621,408 590,746
         
Costs and Expenses        
Lease operating 93,789 85,922 179,552 168,403
Production taxes 1,189 1,166 2,587 2,413
Gathering and transportation 5,978 6,098 11,323 14,089
Depreciation, depletion and amortization 103,513 105,856 203,729 190,651
Accretion of asset retirement obligations 7,425 7,756 14,751 15,408
General and administrative expense 17,698 19,319 41,370 43,207
Loss on derivative financial instruments 5,722 865 7,163 6,387
Total Costs and Expenses 235,314 226,982 460,475 440,558
         
Operating Income 61,502 93,537 160,933 150,188
         
Other Income (Expense)        
Loss from equity method investees (2,621) (616) (4,414) (2,111)
Other income - net 913 543 1,435 902
Interest expense (38,641) (27,112) (68,326) (53,657)
Total Other Expense (40,349) (27,185) (71,305) (54,866)
         
Income Before Income Taxes 21,153 66,352 89,628 95,322
         
Income Tax Expense 10,658 25,020 35,994 35,730
Net Income 10,495 41,332 53,634 59,592
Preferred Stock Dividends 2,872 2,874 5,745 5,749
Net Income Available for Common Stockholders $7,623 $38,458 $47,889 $53,843
         
Earnings per Share        
Basic $0.10 $0.48 $0.64 $0.68
Diluted $0.10 $0.47 $0.64 $0.68
         
Weighted Average Number of Common Shares Outstanding        
Basic 73,964 79,314 74,873 79,238
Diluted 74,053 87,468 74,956 79,367
     
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
     
  Three Months Six Months
  Ended December 31, Ended December 31,
  2013 2012 2013 2012
Cash Flows From Operating Activities        
Net income $10,495 $41,332 $53,634 $59,592
Adjustments to reconcile net income to net cash provided by        
(used in) operating activities:        
Depreciation, depletion and amortization 103,513 105,856 203,729 190,651
Deferred income tax expense 10,392 22,025 32,872 32,814
Change in derivative financial instruments        
Proceeds from derivative instruments 100 161
Other – net 1,993 (8,671) (364) (14,018)
Accretion of asset retirement obligations 7,425 7,756 14,751 15,408
Loss from equity method investees 2,621 616 4,414 2,111
Amortization of debt discount and issuance costs 3,100 1,907 4,555 3,798
Stock-based compensation 439 1,200 3,971 1,656
Changes in operating assets and liabilities        
Accounts receivable 19,130 (18,153) 16,999 (7,397)
Prepaid expenses and other current assets 12,489 4,685 6,219 20,722
Settlement of asset retirement obligations (15,975) (14,673) (34,038) (24,809)
Accounts payable and accrued liabilities (1,821) (4,509) (45,042) (39,053)
Net Cash Provided by Operating Activities 153,801 139,471 261,700 241,636
Cash Flows from Investing Activities        
Acquisitions (12,549) (41,156) (12,564) (41,156)
Capital expenditures (189,869) (192,352) (388,227) (379,050)
Net distributions (contributions) from/to equity investees 5,000 (11,694) (15,524)
Transfer to restricted cash (746) (746)
Return of property deposit 3,500
Proceeds from the sale of properties 1,748
Other (21) (17) (72) 355
Net Cash Used in Investing Activities (198,185) (230,025) (411,555) (435,375)
Cash Flows from Financing Activities        
Proceeds from the issuance of common and preferred stock, net of offering costs 138 69 3,405 6,388
Discount on convertible debt allocated to additional paid-in capital 63,432 63,432
Repurchase of company common stock (118,281) (153,491)
Dividends to shareholders – common (8,702) (5,553) (17,798) (11,103)
Dividends to shareholders – preferred (2,872) (2,874) (5,745) (5,750)
Proceeds from long-term debt 723,988 385,637 1,764,685 609,449
Payments on long-term debt (262,648) (294,446) (1,127,879) (481,259)
Debt issuance costs (10,203) (18,923)
Other (2) (149) (3) (178)
Net Cash Provided by Financing Activities 384,850 82,684 507,683 117,547
         
Net Increase (Decrease) in Cash and Cash Equivalents 340,466 (7,870) 357,828 (76,192)
Cash and Cash Equivalents, beginning of period 17,362 48,765 117,087
Cash and Cash Equivalents, end of  period $357,828 $40,895 $357,828 $40,895
   
ENERGY XXI (BERMUDA) LIMITED
CONSOLIDATED OPERATIONAL INFORMATION (Unaudited)
  Quarter Ended
Operating Highlights Dec. 31, 2013 Sep. 30, 2013 June 30, 2013 Mar. 31, 2013 Dec. 31, 2012
Operating revenues (In Thousands, Except per Unit Amounts)
Crude oil sales $263,626 $290,965 $270,623 $273,280 $280,953
Natural gas sales 31,138 32,584 38,630 27,070 29,657
Hedge gain 2,052 1,043 5,072 3,424 9,909
Total revenues 296,816 324,592 314,325 303,774 320,519
Percent of operating revenues from crude oil          
Prior to hedge gain 89% 90% 88% 91% 90%
Including hedge gain 88% 89% 87% 90% 89%
Operating expenses          
Lease operating expense          
Insurance expense 7,920 8,496 7,462 7,473 8,810
Workover and maintenance 19,690 14,586 15,622 19,166 20,217
Direct lease operating expense 66,179 62,681 59,371 59,666 56,895
Total lease operating expense 93,789 85,763 82,455 86,305 85,922
Production taxes 1,189 1,398 1,481 1,352 1,166
Gathering and transportation 5,978 5,345 5,668 4,411 6,098
DD&A 103,513 100,216 96,846 88,727 105,856
General and administrative 17,698 23,672 12,299 16,092 19,319
Other – net 13,147 8,767 3,829 7,017 8,621
Total operating expenses 235,314 225,161 202,578 203,904 226,982
Operating income $61,502 $99,431 $111,747 $99,870 $93,537
Sales volumes per day          
Natural gas (MMcf) 89.3 100.8 107.4 89.4 90.9
Crude oil (MBbls) 30.2 29.7 28.9 28.6 29.4
Total (MBOE) 45.1 46.6 46.8 43.5 44.6
Percent of sales volumes from crude oil 67% 64% 62% 66% 66%
Average sales price          
Natural gas per Mcf $3.79 $3.51 $3.95 $3.37 $3.55
Hedge gain per Mcf 0.42 0.30 0.23 0.29 0.60
Total natural gas per Mcf $4.21 $3.81 $4.18 $3.66 $4.15
Crude oil per Bbl $94.85 $106.31 $102.82 $106.11 $103.79
Hedge gain (loss) per Bbl (0.50) (0.63) 1.08 0.42 1.80
Total crude oil per Bbl $94.35 $105.68 $103.90 $106.53 $105.59
Total hedge gain per BOE $0.49 $0.24 $1.19 $0.87 $2.42
Operating revenues per BOE $71.54 $75.78 $73.78 $77.58 $78.15
Operating expenses per BOE          
Lease operating expense          
Insurance expense 1.91 1.98 1.75 1.91 2.15
Workover and maintenance 4.75 3.41 3.67 4.89 4.93
Direct lease operating expense 15.95 14.63 13.94 15.24 13.87
Total lease operating expense per BOE 22.61 20.02 19.36 22.04 20.95
Production taxes 0.29 0.33 0.35 0.35 0.28
Gathering and transportation 1.44 1.25 1.33 1.13 1.49
DD&A 24.95 23.40 22.73 22.66 25.81
General and administrative 4.27 5.53 2.89 4.11 4.71
Other – net 3.17 2.05 0.90 1.79 2.10
Total operating expenses per BOE 56.73 52.58 47.56 52.08 55.34
Operating income per BOE $14.81 $23.20 $26.22 $25.50 $22.81

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. Phil Kerig, Director of Corporate Development , 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. Cantor Fitzgerald Europe is Energy XXI's listing broker in the United Kingdom.   To learn more, visit the Energy XXI website at www.EnergyXXI.com .

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.

Bopd – barrels of oil per day

MMcf/d – million cubic feet of gas per day.

MD – total measured depth of a well.

Net Pay – cumulative hydrocarbon-bearing formations.

NRI, Net Revenue Interest – the percentage of production revenue allocated to the working interest after first deducting proceeds allocated to royalty and overriding interest.

TD – target total depth of a well.

TVD –true vertical depth of a well.

WI, Working Interest – the interest held in lands by virtue of a lease, operating agreement, fee title or otherwise, under which the owner of the interest is vested with the right to explore for, develop, produce and own oil, gas or other minerals and bears the proportional cost of such operations.

Workover / Recompletion – operations on a producing well to restore or increase production. A workover or recompletion may be performed to stimulate the well, remove sand or wax from the wellbore, to mechanically repair the well, or for other reasons.

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
         
         Cantor Fitzgerald Europe
         Nominated Adviser: David Porter, Rick Thompson
         Corporate Broking: Richard Redmayne
         Tel: +44 (0) 20 7894 7000
         
         Pelham Bell Pottinger
         James Henderson
         jhenderson@pelhambellpottinger.co.uk
         Mark Antelme
         mantelme@pelhambellpottinger.co.uk
         +44 (0) 20 7861 3232

Energy XXI Logo 2

3 of 3

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 16,399.67 +19.26 0.12%
S&P 500 1,904.01 +17.25 0.91%
NASDAQ 4,316.0740 +57.6360 1.35%

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