Energy XXI Reports Fiscal First-Quarter Results
Post# of 301275
- Oil volumes higher on successful horizontal program
- Two additional drilling rigs to arrive during fiscal second quarter
HOUSTON, Oct. 29, 2013 (GLOBE NEWSWIRE) -- Energy XXI (Nasdaq: EXXI ) (LSE: EXXI ) today announced fiscal first-quarter results and provided an operations update on activities in the Gulf of Mexico.
For the 2014 fiscal first quarter, Energy XXI reported earnings before interest and other, taxes, depreciation, depletion and amortization (adjusted EBITDA) of $199.6 million, compared with $141.4 million in the 2013 fiscal first quarter. Net income available for common stockholders for the 2014 fiscal first quarter was $40.3 million, or $0.51 per diluted share, on revenues of $324.6 million, compared with fiscal 2013 first-quarter net income available for common stockholders of $15.4 million, or $0.19 per diluted share, on revenue of $270.2 million.
Production for the 2014 fiscal first quarter averaged 46,600 barrels of oil equivalent per day (BOE/d) net, compared with 37,300 BOE/d net in the 2013 fiscal first quarter. Oil volumes for the 2014 fiscal first quarter averaged 29,700 barrels per day (Bbl/d) net. Current production continues to average 47,000 BOE/d.
"Production remains stable with only two rigs drilling development wells," Energy XXI Chairman and Chief Executive Officer John Schiller said. "Success at West Delta 73 is driving oil volumes higher. The horizontal drilling program is working well and we continue to demonstrate repeatability of the program."
Capital Expenditures
During the 2014 fiscal first quarter capital, expenditures totaled $198.4 million, with $54.7 million in exploration and $143.7 million in development and other costs.
Conference Call Tomorrow, Oct. 30, at 9 a.m. CDT, 3 p.m. London Time
Energy XXI will host its fiscal first-quarter conference call tomorrow, Oct. 30, at 9 a.m. CDT (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 85886849. 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 September 30, | ||
| 2013 | 2012 | |
| Net Income Available for Common Stockholders | $40,266 | $15,384 |
| Preferred stock dividends | 2,873 | 2,876 |
| Net Income | 43,139 | 18,260 |
| Total other expense - net | 30,956 | 27,681 |
| Depreciation, depletion and amortization | 100,216 | 84,795 |
| Income tax expense | 25,336 | 10,710 |
| Adjusted EBITDA | $199,647 | $141,446 |
| Adjusted EBITDA Per Share | ||
| Basic | $2.63 | $1.79 |
| Diluted | $2.37 | $1.78 |
| Weighted Average Number of Common Shares Outstanding | ||
| Basic | 75,782 | 79,162 |
| Diluted | 84,073 | 79,337 |
| ENERGY XXI (BERMUDA) LIMITED | ||
| CONSOLIDATED BALANCE SHEETS | ||
| (In Thousands, except share information) | ||
| September 30, 2013 | June 30, 2013 | |
| (Unaudited) | ||
| Current Assets | ||
| Cash and cash equivalents | $17,362 | $— |
| Accounts receivable | ||
| Oil and natural gas sales | 139,226 | 132,521 |
| Joint interest billings | 10,362 | 9,505 |
| Insurance and other | 7,982 | 6,745 |
| Prepaid expenses and other current assets | 57,004 | 50,738 |
| Derivative financial instruments | 17,202 | 38,389 |
| Total Current Assets | 249,138 | 237,898 |
| Property and Equipment | ||
| Oil and natural gas properties - full cost method of accounting, including $435.2 million and $422.6 million of unevaluated properties not being amortized at September 30, 2013 and June 30, 2013, respectively | 3,399,831 | 3,289,505 |
| Other property and equipment | 17,319 | 17,003 |
| Total Property and Equipment, net of accumulated depreciation, depletion, amortization and impairment | 3,417,150 | 3,306,508 |
| Other Assets | ||
| Derivative financial instruments | 9,667 | 21,926 |
| Equity investments | 27,386 | 12,799 |
| Debt issuance costs, net of accumulated amortization and other assets | 40,243 | 32,580 |
| Total Other Assets | 77,296 | 67,305 |
| Total Assets | $3,743,584 | $3,611,711 |
| LIABILITIES | ||
| Current Liabilities | ||
| Accounts payable | $180,221 | $219,610 |
| Accrued liabilities | 86,755 | 105,192 |
| Notes payable | 18,031 | 22,524 |
| Deferred income taxes | 20,517 | 20,517 |
| Asset retirement obligations | 27,702 | 29,500 |
| Derivative financial instruments | 69 | 40 |
| Current maturities of long-term debt | 16,254 | 19,554 |
| Total Current Liabilities | 349,549 | 416,937 |
| Long-term debt, less current maturities | 1,530,129 | 1,350,491 |
| Deferred income taxes | 152,672 | 140,804 |
| Asset retirement obligations | 263,530 | 258,318 |
| Other liabilities | 13,409 | 7,915 |
| Total Liabilities | 2,309,289 | 2,174,465 |
| Stockholders' Equity | ||
| Preferred stock, $0.001 par value, 7,500,000 shares authorized at September 30, 2013 and June 30, 2013, respectively | ||
| 7.25% Convertible perpetual preferred stock, 8,000 shares issued and outstanding at September 30, 2013 and June 30, 2013, respectively | — | — |
| 5.625% Convertible perpetual preferred stock, 813,160 and 813,188 shares issued and outstanding at September 30, 2013 and June 30, 2013, respectively | 1 | 1 |
| Common stock, $0.005 par value, 200,000,000 shares authorized and 79,654,099 and 79,425,473 shares issued and 75,800,536 and 76,485,910 shares outstanding at September 30, 2013 and June 30, 2013, respectively | 398 | 397 |
| Additional paid-in capital | 1,519,110 | 1,512,311 |
| Retained earnings (deficit) | 1,818 | (29,352) |
| Accumulated other comprehensive income, net of income taxes | 6,844 | 26,552 |
| Treasury stock, at cost, 3,852,900 and 2,938,900 shares at September 30, 2013 and June 30, 2013, respectively | (93,876) | (72,663) |
| Total Stockholders' Equity | 1,434,295 | 1,437,246 |
| Total Liabilities and Stockholders' Equity | $3,743,584 | $3,611,711 |
| ENERGY XXI (BERMUDA) LIMITED | ||
| CONSOLIDATED STATEMENTS OF INCOME | ||
| (In Thousands, except per share information) | ||
| (Unaudited) | ||
| Three Months September 30, | ||
| 2013 | 2012 | |
| Revenues | ||
| Crude oil sales | $289,229 | $247,330 |
| Natural gas sales | 35,363 | 22,897 |
| Total Revenues | 324,592 | 270,227 |
| Costs and Expenses | ||
| Lease operating | 85,763 | 82,481 |
| Production taxes | 1,398 | 1,247 |
| Gathering and transportation | 5,345 | 7,991 |
| Depreciation, depletion and amortization | 100,216 | 84,795 |
| Accretion of asset retirement obligations | 7,326 | 7,652 |
| General and administrative expense | 23,672 | 23,888 |
| Loss on derivative financial instruments | 1,441 | 5,522 |
| Total Costs and Expenses | 225,161 | 213,576 |
| Operating Income | 99,431 | 56,651 |
| Other Income (Expense) | ||
| Loss from equity method investees | (1,793) | (1,495) |
| Other income - net | 522 | 359 |
| Interest expense | (29,685) | (26,545) |
| Total Other Expense | (30,956) | (27,681) |
| Income Before Income Taxes | 68,475 | 28,970 |
| Income Tax Expense | 25,336 | 10,710 |
| Net Income | 43,139 | 18,260 |
| Preferred Stock Dividends | 2,873 | 2,876 |
| Net Income Available for Common Stockholders | $40,266 | $15,384 |
| Earnings per Share | ||
| Basic | $0.53 | $0.19 |
| Diluted | $0.51 | $0.19 |
| Weighted Average Number of Common Shares Outstanding | ||
| Basic | 75,782 | 79,162 |
| Diluted | 84,073 | 79,337 |
| ENERGY XXI (BERMUDA) LIMITED | ||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
| (In Thousands) | ||
| (Unaudited) | ||
| Three Months September 30, | ||
| 2013 | 2012 | |
| Cash Flows From Operating Activities | ||
| Net income | $43,139 | $18,260 |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
| Depreciation, depletion and amortization | 100,216 | 84,795 |
| Deferred income tax expense | 22,480 | 10,789 |
| Change in derivative financial instruments | ||
| Proceeds from derivative instruments | — | 61 |
| Other – net | (2,357) | (5,347) |
| Accretion of asset retirement obligations | 7,326 | 7,652 |
| Loss from equity method investees | 1,793 | 1,495 |
| Amortization and write-off of debt issuance costs | 1,455 | 1,891 |
| Stock-based compensation | 3,532 | 456 |
| Changes in operating assets and liabilities | ||
| Accounts receivable | (2,131) | 10,755 |
| Prepaid expenses and other current assets | (6,270) | 16,037 |
| Settlement of asset retirement obligations | (18,063) | (10,136) |
| Accounts payable and accrued liabilities | (43,221) | (34,543) |
| Net Cash Provided by Operating Activities | 107,899 | 102,165 |
| Cash Flows from Investing Activities | ||
| Acquisitions | (15) | — |
| Capital expenditures | (198,358) | (186,698) |
| Net contributions to equity investees | (16,694) | (15,524) |
| Property deposit | — | (3,500) |
| Proceeds from the sale of properties | 1,748 | — |
| Other | (51) | 372 |
| Net Cash Used in Investing Activities | (213,370) | (205,350) |
| Cash Flows from Financing Activities | ||
| Proceeds from the issuance of common and preferred stock, net of offering costs | 3,267 | 6,319 |
| Repurchase of company common stock | (35,210) | — |
| Dividends to shareholders – common | (9,096) | (5,550) |
| Dividends to shareholders – preferred | (2,873) | (2,876) |
| Proceeds from long-term debt | 1,040,697 | 223,812 |
| Payments on long-term debt | (865,231) | (186,813) |
| Debt issuance costs | (8,720) | — |
| Other | (1) | (29) |
| Net Cash Provided by Financing Activities | 122,833 | 34,863 |
| Net Increase (Decrease) in Cash and Cash Equivalents | 17,362 | (68,322) |
| Cash and Cash Equivalents, beginning of period | — | 117,087 |
| Cash and Cash Equivalents, end of period | $17,362 | $48,765 |
| Quarter Ended | |||||
| Operating Highlights (Unaudited) | Sept. 30, 2013 | June 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sept. 30, 2012 |
| (In Thousands, Except per Unit Amounts) | |||||
| Operating revenues | |||||
| Crude oil sales | $290,965 | $270,623 | $273,280 | $280,953 | $242,830 |
| Natural gas sales | 32,584 | 38,630 | 27,070 | 29,657 | 17,396 |
| Hedge gain | 1,043 | 5,072 | 3,424 | 9,909 | 10,001 |
| Total revenues | 324,592 | 314,325 | 303,774 | 320,519 | 270,227 |
| Percent of operating revenues from crude oil | |||||
| Prior to hedge gain | 90% | 88% | 91% | 90% | 93% |
| Including hedge gain | 89% | 87% | 90% | 89% | 92% |
| Operating expenses | |||||
| Lease operating expense | |||||
| Insurance expense | 8,496 | 7,462 | 7,473 | 8,810 | 8,992 |
| Workover and maintenance | 14,586 | 15,622 | 19,166 | 20,217 | 10,113 |
| Direct lease operating expense | 62,681 | 59,371 | 59,666 | 56,895 | 63,376 |
| Total lease operating expense | 85,763 | 82,455 | 86,305 | 85,922 | 82,481 |
| Production taxes | 1,398 | 1,481 | 1,352 | 1,166 | 1,247 |
| Gathering and transportation | 5,345 | 5,668 | 4,411 | 6,098 | 7,991 |
| DD&A | 100,216 | 96,846 | 88,727 | 105,856 | 84,795 |
| General and administrative | 23,672 | 12,299 | 16,092 | 19,319 | 23,888 |
| Other – net | 8,767 | 3,829 | 7,017 | 8,621 | 13,174 |
| Total operating expenses | 225,161 | 202,578 | 203,904 | 226,982 | 213,576 |
| Operating income | $99,431 | $111,747 | $99,870 | $93,537 | $56,651 |
| Sales volumes per day | |||||
| Natural gas (MMcf) | 100.8 | 107.4 | 89.4 | 90.9 | 67.1 |
| Crude oil (MBbls) | 29.7 | 28.9 | 28.6 | 29.4 | 26.1 |
| Total (MBOE) | 46.6 | 46.8 | 43.5 | 44.6 | 37.3 |
| Percent of sales volumes from crude oil | 64% | 62% | 66% | 66% | 70% |
| Average sales price | |||||
| Natural gas per Mcf | $3.51 | $3.95 | $3.37 | $3.55 | $2.82 |
| Hedge gain per Mcf | 0.30 | 0.23 | 0.29 | 0.60 | 0.89 |
| Total natural gas per Mcf | $3.81 | $4.18 | $3.66 | $4.15 | $3.71 |
| Crude oil per Bbl | $106.31 | $102.82 | $106.11 | $103.79 | $101.03 |
| Hedge gain (loss) per Bbl | (0.63) | 1.08 | 0.42 | 1.80 | 1.87 |
| Total crude oil per Bbl | $105.68 | $103.90 | $106.53 | $105.59 | $102.90 |
| Total hedge gain per BOE | $0.24 | $1.19 | $0.87 | $2.42 | $2.91 |
| Operating revenues per BOE | $75.78 | $73.78 | $77.58 | $78.15 | $78.72 |
| Operating expenses per BOE | |||||
| Lease operating expense | |||||
| Insurance expense | 1.98 | 1.75 | 1.91 | 2.15 | 2.62 |
| Workover and maintenance | 3.41 | 3.67 | 4.89 | 4.93 | 2.95 |
| Direct lease operating expense | 14.63 | 13.94 | 15.24 | 13.87 | 18.46 |
| Total lease operating expense per BOE | 20.02 | 19.36 | 22.04 | 20.95 | 24.03 |
| Production taxes | 0.33 | 0.35 | 0.35 | 0.28 | 0.36 |
| Gathering and transportation | 1.25 | 1.33 | 1.13 | 1.49 | 2.33 |
| DD&A | 23.40 | 22.73 | 22.66 | 25.81 | 24.70 |
| General and administrative | 5.53 | 2.89 | 4.11 | 4.71 | 6.96 |
| Other – net | 2.05 | 0.90 | 1.79 | 2.10 | 3.84 |
| Total operating expenses per BOE | 52.58 | 47.56 | 52.08 | 55.34 | 62.22 |
| Operating income per BOE | $23.20 | $26.22 | $25.50 | $22.81 | $16.50 |
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.
Energy XXI Stewart Lawrence Vice President, Investor Relations and Communications 713-351-3006 Greg Smith Director, Investor Relations 713-351-3149 Cantor Fitzgerald Europe Nominated Adviser: David Porter, Rick Thompson Corporate Broking: Richard Redmayne Tel: +44 (0) 20 7894 7000 Pelham Bell Pottinger James Henderson Mark Antelme +44 (0) 20 7861 3232
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