"This merger of the two premier independent oil producers on the shelf will create an unrivalled operator," EPL Chairman, President and CEO Gary C. Hanna said. "As part of a larger organization, EPL shareholders will benefit from synergies across the board, a high-grading of the drilling portfolio and opportunities to expand across the Gulf of Mexico."
EPL owns working interests in 37 producing fields, mainly concentrated within nine core producing areas: an estimated 91 percent of proved reserves, 88 percent of production and 91 percent of revenues are associated with the Ship Shoal, East Bay, South Timbalier, South Pass 78 and 49, West Delta, Main Pass, Eugene Island and South Marsh complexes. EPL operates 90 percent of its properties, by reserves, similar to Energy XXI's 94 percent.
EPL's year-end reserves estimates were prepared as of Dec. 31, 2013 by Netherland, Sewell & Associates, Inc., independent oil and gas consultants. Including estimates for the subsequently acquired Eugene Island 258/259 field, and adjustments for lease-use natural gas, the properties are estimated to contain net proved and probable reserves of 106.3 million BOE, 71 percent of which is oil. Proved reserves are estimated at 54.9 million barrels of oil and 139.2 billion cubic feet of natural gas, or a total of 78.1 million BOE, 70 percent of which are proved developed. Offshore leases total 273,713 net acres. At its Dec. 31, 2013 year end, EPL reported total assets of $1.86 billion, with net income for the year totaling $85.3 million. Further information is available at www.eplweb.com .
"This acquisition adds meaningfully to our reserves, production, infrastructure and acreage positions, complemented by seismic data and field studies," Energy XXI Executive Vice President of Exploration and Production Ben Marchive said. "Upon completion, the combined company will own and operate 10 oil fields on the shelf with cumulative production exceeding 80 million barrels of oil each, with ample opportunity to grow organically by increasing recovery from those known reservoirs as well as by exploring around and below the producing horizons. The combined company's larger presence on the central Gulf of Mexico shelf can drive capital costs lower and operating efficiencies higher. In addition, we will be able to apply horizontal drilling and other exploitation expertise across the expanded portfolio, while leveraging advanced seismic data to explore sub-salt and deeper horizons across the region."