As part of the deal Energy XXI will pay $39 a share in cash and stock to acquire EPL. The larger oil company will also take on all of EPL's debt, bringing Energy XXI's total consideration for the deal to $2.3 billion.
One of EPL's directors will join the Energy XXI once the deal closes.
The acquisition will make Energy XXI the largest independent producer on the Gulf of Mexico shelf.
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"EPL's assets and operations closely resemble our own, predominantly oil, with some of the highest margins in the industry and extraordinary opportunities for reserves and production growth through development and exploration activities," Energy XXI chairman and CEO John Schiller said in a press release.
TheStreet Ratings team rates ENERGY XXI (BERMUDA) as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate ENERGY XXI (BERMUDA) (EXXI) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including feeble growth in the company's earnings per share, deteriorating net income and disappointing return on equity."