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This is a result of that acquisition. We ended up with the position that you see here with regards to large oil fields. The two names you’ll see the most up there, us and Chevron. You’ll notice Apache, they make more oil than us, but in terms of having interest in large fields, they’ve only got one of the top 15, and we think that’s a very big part of what we do.The second part that’s important is technical people, and I can’t iterate enough for you that you can’t play in the Gulf of Mexico with average technical staff. You have to have people that know what they’re doing. Our staff has been doing it a lot of years. Most of them have spent their entire time in the Gulf of Mexico, the Gulf Coast, and the reason for that is your mistakes are much more costly than they are on shore, and so you’ve got to have people that know what they’re doing there. One other quick thing, when we talk about Gulf of Mexico, we still run into a lot of people that ask you want the average client is the Gulf of Mexico. The answer’s going to be 35 to 40%. And that was true for some of the predecessor companies, and the reason for that was they were highly gas, they had a lot of normal pressure gas wells that you see on a decline curve, and when the water hits on a gas well, there’s not a lot you can do. Your well’s going to go off very quickly. We, on the other hand, have 70% oil, so our wells look much more like the green curve there, which is, we produce at a flat rate. When the water hits, we start going on a decline, and typically you see a hyperbolic where as long as we’re moving fluid, we continue to move oil at a much shallower decline. In fact, when you look at our wells that have been on for more than three years, the average decline there is less than 14%. So, it puts us in a position where, if you look at our production, we’ve got somewhere between 15 to 20% straight decline, if you look at it, and then you add back about 5 to 10% on that just doing our behind pipe re-completions, so literally every year, all we’re really overcoming is about 5 to 10% of decline with our capital program.
This is the Exxon fields, just to give you some sense of size. I mentioned the old fields that we had acquired earlier from other independents. When you look at those fields, in the first six years we’ve had them, we’ve actually increased the ultimate recovery by 7% already. Basically the reserves today are what they were the days we bought them six years ago. We’re going to do the same thing at Exxon. A lot of potential here, a lot of stuff that Exxon simply couldn’t do because they didn’t capture capital, not because they didn’t know the ideas were here, but they’re $20 barrels and in the Exxon machine you can’t capture capital with $20 barrels.What we show you here is the forecast as it was from [inaudible] acquired. As you can see where we’ve already jumped the production significantly above that forecast, and then the dashed line kind of gives you some sense of what just a 5% increase in EUR would look like. And just 5% on these fields adds $3 billion flux of value in about two-thirds of the amount of oil we currently have on the books. Read the rest of this transcript for free on seekingalpha.com