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Energy XXI To Acquire EPL Oil & Gas

In addition to utilizing cash on hand to finance the purchase, Energy XXI has obtained commitments to increase its corporate revolver from $1.0875 billion currently to $1.675 billion in conjunction with the acquisition, as well as a $400 million unsecured bridge loan to augment the available revolver if EPL's bonds are repurchased. Energy XXI would anticipate retiring any bridge loan through the future issuance of high-yield notes. Details of financing terms will be disclosed upon completion of any issuances.

"Based on current expectations and market conditions, the acquisition is expected to be immediately accretive to existing Energy XXI shareholders, while offering EPL shareholders a significant premium to recent trading prices in addition to the ability to participate in the future success of the combined company," Schiller said.

TRANSACTION TERMS

The consideration to be received by EPL stockholders is valued at $39.00 per EPL share based on Energy XXI's closing price as of March 11, 2014, representing a 37 percent premium to the 30-day average closing price of EPL shares and a 34 percent premium over the closing price of EPL shares on March 11, 2014. The aggregate consideration will be paid 65 percent in cash and 35 percent in Energy XXI common shares, based on Energy XXI's closing price on March 11, 2014. EPL stockholders will be able to elect, for each EPL share held, either (i) $39.00 in cash, (ii) 1.669 common shares of Energy XXI, or (iii) $25.35 in cash plus 0.584 common shares of Energy XXI. All elections by shareholders will be subject to proration. Upon closing, Energy XXI shareholders are expected to own approximately 77 percent of the combined company and EPL shareholders are expected to own the remaining 23 percent.

Aggregate consideration to EPL shareholders is expected to consist of approximately $1 billion in cash and approximately 23.4 million common shares of Energy XXI. Once the transaction is completed, Schiller will remain chairman and CEO of the combined entity. The headquarters will remain in Houston. One member of EPL's board of directors will join the Energy XXI board of directors upon completion of the transaction, which is subject to shareholder approval at both companies, receipt of regulatory approvals and customary closing conditions. Both the boards of directors of Energy XXI and EPL are unanimously recommending that shareholders vote in favor of the transaction.

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