Energy XXI Reports Fiscal 2015 Second-Quarter Resu
Post# of 29735
Posted On: 02/09/2015 12:06:49 AM
Energy XXI Reports Fiscal 2015 Second-Quarter Results, Issues Operations Update
HOUSTON, Feb. 8, 2015 (GLOBE NEWSWIRE) -- Energy XXI (Nasdaq: EXXI ) today announced fiscal second-quarter 2015 results and provided an operations update on activities in the Gulf of Mexico.
Highlights
Oil production within guidance
- Average Q2 production was 57,900 BOE/d (41,800 barrels of oil per day)
- Average third quarter production to date has averaged 60,000 BOE/d (43,000 barrels of oil per day)
Operating cost reductions better than guidance with more efficiencies expected
- LOE $119 million versus $142 million in previous quarter
- General and administrative costs, before severance charges, approximated $14 million
Revenue impact of lower commodity prices mitigated by hedge position
- Adjusted EBITDA $217.0 million versus Bloomberg consensus estimate of $215.3 million
Continued progress on asset monetizations
Non-cash goodwill write-down of $329 million taken primarily due to commodity prices
"We have made great progress in lowering our lease operating costs as well as our general and administrative costs, and expect further reductions in the future," Energy XXI Ltd Chairman, President and Chief Executive Officer John D. Schiller said. "Additionally, we are continuing to pursue and evaluate monetization of our Grand Isle gathering system, as well as evaluating bids on our non-core asset sale. These proceeds will enhance liquidity and reduce long term debt."
Fiscal 2015 Second-Quarter Results
For the 2015 fiscal second quarter, adjusted earnings before non-recurring charges and interest, taxes, depreciation, depletion and amortization (adjusted EBITDA) was $217.0 million (a non-GAAP measure reconciled below), compared with $169.8 million in the 2014 fiscal second quarter. The company reported a net loss available for common stockholders in the 2015 fiscal second quarter of $376.7 million, or $4.01 loss per diluted share (or loss per share of $0.35 before a non-cash goodwill impairment and severance costs), on revenues of $357.8 million, compared with fiscal 2014 second-quarter net income available for common stockholders of $7.6 million, or $0.10 income per diluted share, on revenues of $296.8 million. The company's reported loss on the quarter was primarily due to a non-cash write down on goodwill due to lower commodity prices, as well as executive severance and other severance costs associated with reducing general and administrative and field operating expenses.
Production for the 2015 fiscal second quarter averaged 57,900 net barrels of oil equivalent per day (BOE/d), with 41,800 barrels per day (Bbl/d) liquids, compared with 45,100 net BOE/d, 30,200 Bbl/d liquids in the 2014 fiscal second quarter. Current quarter production has averaged 60,000 BOE/d, of which 43,000 barrels are oil.
Hedging
During the fiscal second quarter, the company monetized certain calendar 2015 crude oil hedges for total cash proceeds of $26 million, and replaced some of those hedges with put spreads for calendar 2015. In late January and early February, the company monetized its three-way and put spread hedges for calendar 2015, receiving $73.1 million in cash proceeds. Following this monetization, the company entered into additional hedges for calendar 2015 and calendar 2016, bringing total crude oil hedges to approximately 72 percent and 39 percent of estimated volumes for those periods.
Operations Update
During the fiscal second quarter eight oil wells were brought online: two horizontal wells at West Delta 73, two oil wells at Main Pass 61, three wells at Ship Shoal 208, and one oil well at West Delta 30. Additionally, one recompletion was brought online at West Delta 30.
The production optimization work in the West Delta area, which includes water handling and compression equipment to alleviate line pressures and allow the company to optimize oil production in the field, should be completed by the end of February. At South Pass 49 the optimization project has been completed and brought online within the past week. Compression equipment was installed to allow for additional capacity, providing initial uplift from the field of approximately 1,000 BOE/d gross.
The company continues to focus on low risk recompletions to maximize capital efficiency. To date 23 recompletion targets have been identified across the core acreage, with another 20 that are being evaluated. The majority of recompletion opportunities are in the South Pass 78 field where the company deployed a workover rig in December 2014. The primary targets for these recompletions are proved developed non-producing reserves. Two wells have already been successfully recompleted with average initial production rate of approximately 450 Bbl/d each.
Divestiture Update
The Grand Isle gathering system was deregulated on February 1, 2015 and we continue to evaluate and pursue the monetization of the asset.
On our potential non-core asset divestiture, being marketed by The Oil & Gas Asset Clearinghouse, bids have been submitted and are being reviewed. The package includes approximately 6,000 BOE/d of production from Energy XXI from approximately 30 fields.
Capital Expenditures
During the 2015 fiscal second quarter, capital expenditures totaled $202 million, with $12.1 million in exploration and $189.9 million in development and other costs. Currently, the company is estimating the total fiscal 2015 capital program to range from $670 million to $690 million. As of December 31, 2014 the company had $434 million of available liquidity including $101 million cash.
Guidance
Third-quarter and full-year guidance is provided below.
Volume Projections FY 2015 3Q FY15
Net Production (per day)
Oil, including NGLs (Bbls) 41,000 - 44,000 41,000-44,000
BOE 57,000 – 61,000 58,000-62,000
% Oil, including NGLs
(using midpoint of guidance) 71% 71%
FY15 Cost Projections $MM)
2Q Actuals
3Q proj.
LOE 119 115-125
G&A 28* 16-20
Gathering & Transport 4.8 4-7
DD&A 33.29/BOE 32.00-34.50/BOE
*includes non-recurring charges
Quarter Ended
December 31, September 30, June 30, March 31, December 31,
Operating Highlights 2014 2014 2014 2014 2013
(In thousands, except per unit amounts)
Operating revenues
Crude oil sales $ 279,163 $ 370,155 $ 294,974 $ 254,641 $ 263,626
Natural gas sales 32,345 34,561 34,508 37,562 31,138
Hedge gain (loss) 46,247 1,485) 5,348) 7,020) 2,052
Total revenues 357,755 403,231 324,134 285,183 296,816
Percentage of operating revenues from crude oil
Prior to hedge gain (loss) 90% 91% 90% 87% 89%
Including hedge gain (loss) 91% 91% 89% 88% 88%
Operating expenses
Lease operating expense
Insurance expense 11,233 11,022 8,357 6,410 7,920
Workover and maintenance 13,130 29,416 14,408 17,797 19,690
Direct lease operating expense 95,003 102,147 79,806 59,417 66,179
Total lease operating expense 119,366 142,585 102,571 83,624 93,789
Production taxes 2,263 3,093 1,750 1,090 1,189
Gathering and transportation 4,771 9,188 6,509 5,700 5,978
DD&A 177,333 161,266 119,691 99,899 103,513
Goodwill impairment 329,293 -- -- -- --
General and administrative 27,745 26,424 30,824 24,208 17,698
Other - net 11,912 9,536 8,112 5,861 13,147
Total operating expenses 672,683 352,092 269,457 220,382 235,314
Operating income (loss) $ (314,928) $ 51,139 $ 54,677 $ 64,801 $ 61,502
Sales volumes per day
Natural gas (MMcf) 96.5 100.7 84.8 83.7 89.3
Crude oil (MBbls) 41.8 41.8 32.0 28.4 30.2
Total (MBOE) 57.9 58.6 46.1 42.3 45.1
Percent of sales volumes from crude oil 72% 71% 69% 67% 67%
Average sales price
Natural gas per Mcf 3.64 3.73 4.47 4.98 3.79
Hedge gain (loss) per Mcf 0.09 0.02 0.02) 0.31) 0.42
Total natural gas per Mcf $ 3.73 $ 3.75 $ 4.45 $ 4.67 $ 4.21
Crude oil per Bbl 72.56 96.28 101.45 99.71 94.85
Hedge gain (loss) per Bbl 11.82 0.43) 1.78) 1.83) 0.50)
Total crude oil per Bbl $ 84.38 $ 95.85 $ 99.67 $ 97.88 $ 94.35
Total hedge gain (loss) per BOE 8.68 0.28) 1.28) 1.83) 0.49
Operating revenues per BOE $ 67.15 $ 74.84 $ 77.28 $ 74.85 $ 71.54
Operating expenses per BOE
Lease operating expense
Insurance expense 2.11 2.05 1.99 1.68 1.91
Workover and maintenance 2.46 5.46 3.44 4.67 4.75
Direct lease operating expense 17.83 18.96 19.03 15.59 15.95
Total lease operating expense per BOE 22.40 26.47 24.46 21.94 22.61
Production taxes 0.42 0.57 0.42 0.29 0.29
Gathering and transportation 0.90 1.71 1.55 1.50 1.44
DD&A 33.29 29.93 28.54 26.22 24.95
Goodwill impairment 61.81 -- -- -- --
General and administrative 5.21 4.90 7.35 6.35 4.27
Other - net 2.23 1.77 1.93 1.54 3.17
Total operating expenses per BOE 126.26 65.35 64.25 57.84 56.73
Operating income (loss) per BOE $ (59.11) $ 9.49 $ 13.03 $ 17.01 $ 14.81
ENERGY XXI LTD
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share information)
(Unaudited)
Three Months Ended December 31, Six Months Ended December 31,
2014 2013 2014 2013
Revenues
Crude oil sales $ 324,655 $ 262,230 $ 693,156 $ 551,459
Natural gas sales 33,100 34,586 67,830 69,949
Total Revenues 357,755 296,816 760,986 621,408
Costs and Expenses
Lease operating 119,366 93,789 261,951 179,552
Production taxes 2,263 1,189 5,356 2,587
Gathering and transportation 4,771 5,978 13,959 11,323
Depreciation, depletion and amortization 177,333 103,513 338,599 203,729
Accretion of asset retirement obligations 12,798 7,425 25,617 14,751
Goodwill impairment 329,293 -- 329,293 --
General and administrative expense 27,745 17,698 54,169 41,370
(Gain) loss on derivative financial instruments 886) 5,722 4,169) 7,163
Total Costs and Expenses 672,683 235,314 1,024,775 460,475
Operating Income (Loss) 314,928) 61,502 263,789) 160,933
Other Income (Expense)
Income (loss) from equity method investees 1,619) 2,621) 738) 4,414)
Other income - net 991 913 1,942 1,435
Interest expense 66,901) 38,641) 133,164) 68,326)
Total Other Expense 67,529) 40,349) 131,960) 71,305)
Income (Loss) Before Income Taxes 382,457) 21,153 395,749) 89,628
Income Tax Expense (Benefit) 8,578) 10,658 15,467) 35,994
Net Income (Loss) 373,879) 10,495 380,282) 53,634
Preferred Stock Dividends 2,870 2,872 5,742 5,745
Net Income (Loss) Available for Common Stockholders $ (376,749) $ 7,623 $ (386,024) $ 47,889
Earnings (Loss) per Share
Basic $ (4.01) $ 0.10 $ (4.11) $ 0.64
Diluted $ (4.01) $ 0.10 $ (4.11) $ 0.64
Weighted Average Number of Common Shares Outstanding
Basic 93,993 73,964 93,913 74,873
Diluted 93,993 74,053 93,913 74,956
ENERGY XXI LTD
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 Six Months Ended
December 31, December 31,
2014 2013 2014 2013
In Thousands, Except per Unit Amounts)
Net Income (Loss) as Reported $ 373,879) $ 10,495 $ 380,282) $ 53,634
Interest expense - net 65,910 37,728 131,222 66,891
Depreciation, depletion and amortization 177,333 103,513 338,599 203,729
Goodwill impairment 329,293 -- 329,293 --
Income tax expense (benefit) 8,578) 10,658 15,467) 35,994
EBITDA 190,079 162,394 403,365 360,248
Adjustments to EBITDA
Accretion of asset retirement obligation 12,798 7,425 25,617 14,751
Non-recurring charges (severance costs) 14,122 -- 18,757 --
Adjusted EBITDA $ 216,999 $ 169,819 $ 447,739 $ 374,999
Adjusted EBITDA Per Share
Basic $ 2.31 $ 2.30 $ 4.77 $ 5.01
Diluted $ 2.31 $ 2.29 $ 4.77 $ 5.00
Weighted Average Number of Common Shares Outstanding
Basic 93,993 73,964 93,913 74,873
Diluted 93,993 74,053 93913 74,956
ENERGY XXI LTD
CONSOLIDATED BALANCE SHEETS
(In Thousands, except share information)
December 31, June 30,
2014 2014
Current Assets (Unaudited)
Cash and cash equivalents $ 101,284 $ 145,806
Accounts receivable
Oil and natural gas sales 102,882 167,075
Joint interest billings 19,098 12,898
Other 30,728 5,438
Prepaid expenses and other current assets 50,178 72,530
Deferred income taxes 11,235 52,587
Derivative financial instruments 150,026 1,425
Total Current Assets 465,431 457,759
Property and Equipment
Oil and natural gas properties, net - full cost method of accounting, including $807.8 million and $1,165.7 million of unevaluated properties not being amortized at December 31, 2014 and June 30, 2014, respectively 6,642,565 6,524,602
Other property and equipment, net 23,833 19,760
Total Property and Equipment, net of accumulated depreciation, depletion, amortization and impairment 6,666,398 6,544,362
Other Assets
Goodwill -- 329,293
Derivative financial instruments 8,377 3,035
Equity investments 27,685 40,643
Restricted Cash 6,024 6,350
Other assets and debt issuance costs, net of accumulated amortization 50,128 57,394
Total Other Assets 92,214 436,715
Total Assets $ 7,224,043 $ 7,438,836
LIABILITIES
Current Liabilities
Accounts payable $ 312,568 $ 417,776
Accrued liabilities 91,665 133,526
Notes payable 12,175 21,967
Asset retirement obligations 79,573 79,649
Derivative financial instruments -- 31,957
Current maturities of long-term debt 21,702 15,020
Total Current Liabilities 517,683 699,895
Long-term debt, less current maturities 3,989,922 3,744,624
Deferred income taxes 713,736 701,038
Asset retirement obligations 470,523 480,185
Derivative financial instruments -- 4,306
Other liabilities 8,629 10,958
Total Liabilities 5,700,493 5,641,006
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.001 par value, 7,500,000 shares authorized at December 31, 2014 and June 30, 2014
7.25% Convertible perpetual preferred stock, 3,000 and 8,000 shares issued and outstanding at December 31, 2014
and June 30, 2014, respectively -- --
5.625% Convertible perpetual preferred stock, 812,759 and 812,760 shares issued and outstanding at December 31, 2014 and June 30, 2014, respectively 1 1
Common stock, $0.005 par value, 200,000,000 shares authorized and 94,395,593 and 93,719,570 shares issued and outstanding at December 31, 2014 and June 30, 2014, respectively 471 468
Additional paid-in capital 1,842,152 1,837,462
Accumulated deficit 428,200) 19,626)
Accumulated other comprehensive income (loss), net of income taxes 109,126 20,475)
Total Stockholders' Equity 1,523,550 1,797,830
Total Liabilities and Stockholders' Equity $ 7,224,043 $ 7,438,836
ENERGY XXI LTD
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Six Months Ended December 31 ,
2014 2013
Cash Flows From Operating Activities
Net income (loss) $ (380,282) $ 53,634
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization 338,599 203,729
Goodwill impairment 329,293
Deferred income tax expense (benefit) 16,027) 32,872
Change in derivative financial instruments
Proceeds from sale of derivative instruments 29,236 --
Other – net 5,449) 364)
Accretion of asset retirement obligations 25,617 14,751
Loss (income) from equity method investees 738 4,414
Amortization and write-off of debt issuance costs and other 5,615 4,555
Stock-based compensation 2,632 3,971
Changes in operating assets and liabilities
Accounts receivable 33,819 16,999
Prepaid expenses and other current assets 22,483 6,219
Settlement of asset retirement obligations 53,960) 34,038)
Accounts payable and accrued liabilities 171,006) 45,042)
Net Cash Provided by Operating Activities 161,308 261,700
Cash Flows from Investing Activities
Acquisitions 287) 12,564)
Capital expenditures 449,114) 388,227)
Change in equity method investments 12,642 11,694)
Transfer from (to) restricted cash 325 746)
Proceeds from the sale of properties 6,947 1,748
Other 95 72)
Net Cash Used in Investing Activities 429,392) 411,555)
Cash Flows from Financing Activities
Proceeds from the issuance of common and preferred stock, net of offering costs 2,059 3,405
Discount on convertible debt allocated to additional paid-in capital -- 63,432
Repurchase of company common stock -- 153,491)
Dividends to shareholders – common 22,548) 17,798)
Dividends to shareholders – preferred 5,744) 5,745)
Proceeds from long-term debt 1,011,948 1,764,685
Payments on long-term debt 759,851) 1,127,879)
Debt issuance costs 2,302) 18,923)
Other -- 3)
Net Cash Provided by Financing Activities 223,562 507,683
Net Increase (Decrease) in Cash and Cash Equivalents 44,522) 357,828
Cash and Cash Equivalents, beginning of period 145,806 --
Cash and Cash Equivalents, end of period $ 101,284 $ 357,828
Fiscal 2015 Second Quarter Conference Call
Energy XXI will host its fiscal second-quarter conference call Monday, Feb. 9, at 10 a.m. CST. The dial-in numbers are 1 (888) 771-4371 (U.S.) and (0) 80 8238 9578 (U.K.) and the confirmation code is 38758743. 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 .
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.
Bbl/d – barrels per day of oil or condensate
Mcf/d – thousand cubic feet of gas per day.
NRI, Net Revenue Interest – the percentage of production revenue allocated to the working interest after first deducting proceeds allocated to royalty and overriding interest.
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.
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, our ability to integrate acquisitions, 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.
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. To learn more, visit the Energy XXI website at www.EnergyXXI.com .
INQUIRIES OF THE COMPANY Greg Smith Vice President, Investor Relations 713-351-3149 Kim Pinyopusarerk Manager, Investor Relations 713-351-3028
Read More: http://investorshangout.com/post/view?id=2631...z3RDVjs3Cg
Read More: http://investorshangout.com/post/view?id=2631...z3RDmhPUzZ
HOUSTON, Feb. 8, 2015 (GLOBE NEWSWIRE) -- Energy XXI (Nasdaq: EXXI ) today announced fiscal second-quarter 2015 results and provided an operations update on activities in the Gulf of Mexico.
Highlights
Oil production within guidance
- Average Q2 production was 57,900 BOE/d (41,800 barrels of oil per day)
- Average third quarter production to date has averaged 60,000 BOE/d (43,000 barrels of oil per day)
Operating cost reductions better than guidance with more efficiencies expected
- LOE $119 million versus $142 million in previous quarter
- General and administrative costs, before severance charges, approximated $14 million
Revenue impact of lower commodity prices mitigated by hedge position
- Adjusted EBITDA $217.0 million versus Bloomberg consensus estimate of $215.3 million
Continued progress on asset monetizations
Non-cash goodwill write-down of $329 million taken primarily due to commodity prices
"We have made great progress in lowering our lease operating costs as well as our general and administrative costs, and expect further reductions in the future," Energy XXI Ltd Chairman, President and Chief Executive Officer John D. Schiller said. "Additionally, we are continuing to pursue and evaluate monetization of our Grand Isle gathering system, as well as evaluating bids on our non-core asset sale. These proceeds will enhance liquidity and reduce long term debt."
Fiscal 2015 Second-Quarter Results
For the 2015 fiscal second quarter, adjusted earnings before non-recurring charges and interest, taxes, depreciation, depletion and amortization (adjusted EBITDA) was $217.0 million (a non-GAAP measure reconciled below), compared with $169.8 million in the 2014 fiscal second quarter. The company reported a net loss available for common stockholders in the 2015 fiscal second quarter of $376.7 million, or $4.01 loss per diluted share (or loss per share of $0.35 before a non-cash goodwill impairment and severance costs), on revenues of $357.8 million, compared with fiscal 2014 second-quarter net income available for common stockholders of $7.6 million, or $0.10 income per diluted share, on revenues of $296.8 million. The company's reported loss on the quarter was primarily due to a non-cash write down on goodwill due to lower commodity prices, as well as executive severance and other severance costs associated with reducing general and administrative and field operating expenses.
Production for the 2015 fiscal second quarter averaged 57,900 net barrels of oil equivalent per day (BOE/d), with 41,800 barrels per day (Bbl/d) liquids, compared with 45,100 net BOE/d, 30,200 Bbl/d liquids in the 2014 fiscal second quarter. Current quarter production has averaged 60,000 BOE/d, of which 43,000 barrels are oil.
Hedging
During the fiscal second quarter, the company monetized certain calendar 2015 crude oil hedges for total cash proceeds of $26 million, and replaced some of those hedges with put spreads for calendar 2015. In late January and early February, the company monetized its three-way and put spread hedges for calendar 2015, receiving $73.1 million in cash proceeds. Following this monetization, the company entered into additional hedges for calendar 2015 and calendar 2016, bringing total crude oil hedges to approximately 72 percent and 39 percent of estimated volumes for those periods.
Operations Update
During the fiscal second quarter eight oil wells were brought online: two horizontal wells at West Delta 73, two oil wells at Main Pass 61, three wells at Ship Shoal 208, and one oil well at West Delta 30. Additionally, one recompletion was brought online at West Delta 30.
The production optimization work in the West Delta area, which includes water handling and compression equipment to alleviate line pressures and allow the company to optimize oil production in the field, should be completed by the end of February. At South Pass 49 the optimization project has been completed and brought online within the past week. Compression equipment was installed to allow for additional capacity, providing initial uplift from the field of approximately 1,000 BOE/d gross.
The company continues to focus on low risk recompletions to maximize capital efficiency. To date 23 recompletion targets have been identified across the core acreage, with another 20 that are being evaluated. The majority of recompletion opportunities are in the South Pass 78 field where the company deployed a workover rig in December 2014. The primary targets for these recompletions are proved developed non-producing reserves. Two wells have already been successfully recompleted with average initial production rate of approximately 450 Bbl/d each.
Divestiture Update
The Grand Isle gathering system was deregulated on February 1, 2015 and we continue to evaluate and pursue the monetization of the asset.
On our potential non-core asset divestiture, being marketed by The Oil & Gas Asset Clearinghouse, bids have been submitted and are being reviewed. The package includes approximately 6,000 BOE/d of production from Energy XXI from approximately 30 fields.
Capital Expenditures
During the 2015 fiscal second quarter, capital expenditures totaled $202 million, with $12.1 million in exploration and $189.9 million in development and other costs. Currently, the company is estimating the total fiscal 2015 capital program to range from $670 million to $690 million. As of December 31, 2014 the company had $434 million of available liquidity including $101 million cash.
Guidance
Third-quarter and full-year guidance is provided below.
Volume Projections FY 2015 3Q FY15
Net Production (per day)
Oil, including NGLs (Bbls) 41,000 - 44,000 41,000-44,000
BOE 57,000 – 61,000 58,000-62,000
% Oil, including NGLs
(using midpoint of guidance) 71% 71%
FY15 Cost Projections $MM)
2Q Actuals
3Q proj.
LOE 119 115-125
G&A 28* 16-20
Gathering & Transport 4.8 4-7
DD&A 33.29/BOE 32.00-34.50/BOE
*includes non-recurring charges
Quarter Ended
December 31, September 30, June 30, March 31, December 31,
Operating Highlights 2014 2014 2014 2014 2013
(In thousands, except per unit amounts)
Operating revenues
Crude oil sales $ 279,163 $ 370,155 $ 294,974 $ 254,641 $ 263,626
Natural gas sales 32,345 34,561 34,508 37,562 31,138
Hedge gain (loss) 46,247 1,485) 5,348) 7,020) 2,052
Total revenues 357,755 403,231 324,134 285,183 296,816
Percentage of operating revenues from crude oil
Prior to hedge gain (loss) 90% 91% 90% 87% 89%
Including hedge gain (loss) 91% 91% 89% 88% 88%
Operating expenses
Lease operating expense
Insurance expense 11,233 11,022 8,357 6,410 7,920
Workover and maintenance 13,130 29,416 14,408 17,797 19,690
Direct lease operating expense 95,003 102,147 79,806 59,417 66,179
Total lease operating expense 119,366 142,585 102,571 83,624 93,789
Production taxes 2,263 3,093 1,750 1,090 1,189
Gathering and transportation 4,771 9,188 6,509 5,700 5,978
DD&A 177,333 161,266 119,691 99,899 103,513
Goodwill impairment 329,293 -- -- -- --
General and administrative 27,745 26,424 30,824 24,208 17,698
Other - net 11,912 9,536 8,112 5,861 13,147
Total operating expenses 672,683 352,092 269,457 220,382 235,314
Operating income (loss) $ (314,928) $ 51,139 $ 54,677 $ 64,801 $ 61,502
Sales volumes per day
Natural gas (MMcf) 96.5 100.7 84.8 83.7 89.3
Crude oil (MBbls) 41.8 41.8 32.0 28.4 30.2
Total (MBOE) 57.9 58.6 46.1 42.3 45.1
Percent of sales volumes from crude oil 72% 71% 69% 67% 67%
Average sales price
Natural gas per Mcf 3.64 3.73 4.47 4.98 3.79
Hedge gain (loss) per Mcf 0.09 0.02 0.02) 0.31) 0.42
Total natural gas per Mcf $ 3.73 $ 3.75 $ 4.45 $ 4.67 $ 4.21
Crude oil per Bbl 72.56 96.28 101.45 99.71 94.85
Hedge gain (loss) per Bbl 11.82 0.43) 1.78) 1.83) 0.50)
Total crude oil per Bbl $ 84.38 $ 95.85 $ 99.67 $ 97.88 $ 94.35
Total hedge gain (loss) per BOE 8.68 0.28) 1.28) 1.83) 0.49
Operating revenues per BOE $ 67.15 $ 74.84 $ 77.28 $ 74.85 $ 71.54
Operating expenses per BOE
Lease operating expense
Insurance expense 2.11 2.05 1.99 1.68 1.91
Workover and maintenance 2.46 5.46 3.44 4.67 4.75
Direct lease operating expense 17.83 18.96 19.03 15.59 15.95
Total lease operating expense per BOE 22.40 26.47 24.46 21.94 22.61
Production taxes 0.42 0.57 0.42 0.29 0.29
Gathering and transportation 0.90 1.71 1.55 1.50 1.44
DD&A 33.29 29.93 28.54 26.22 24.95
Goodwill impairment 61.81 -- -- -- --
General and administrative 5.21 4.90 7.35 6.35 4.27
Other - net 2.23 1.77 1.93 1.54 3.17
Total operating expenses per BOE 126.26 65.35 64.25 57.84 56.73
Operating income (loss) per BOE $ (59.11) $ 9.49 $ 13.03 $ 17.01 $ 14.81
ENERGY XXI LTD
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except per share information)
(Unaudited)
Three Months Ended December 31, Six Months Ended December 31,
2014 2013 2014 2013
Revenues
Crude oil sales $ 324,655 $ 262,230 $ 693,156 $ 551,459
Natural gas sales 33,100 34,586 67,830 69,949
Total Revenues 357,755 296,816 760,986 621,408
Costs and Expenses
Lease operating 119,366 93,789 261,951 179,552
Production taxes 2,263 1,189 5,356 2,587
Gathering and transportation 4,771 5,978 13,959 11,323
Depreciation, depletion and amortization 177,333 103,513 338,599 203,729
Accretion of asset retirement obligations 12,798 7,425 25,617 14,751
Goodwill impairment 329,293 -- 329,293 --
General and administrative expense 27,745 17,698 54,169 41,370
(Gain) loss on derivative financial instruments 886) 5,722 4,169) 7,163
Total Costs and Expenses 672,683 235,314 1,024,775 460,475
Operating Income (Loss) 314,928) 61,502 263,789) 160,933
Other Income (Expense)
Income (loss) from equity method investees 1,619) 2,621) 738) 4,414)
Other income - net 991 913 1,942 1,435
Interest expense 66,901) 38,641) 133,164) 68,326)
Total Other Expense 67,529) 40,349) 131,960) 71,305)
Income (Loss) Before Income Taxes 382,457) 21,153 395,749) 89,628
Income Tax Expense (Benefit) 8,578) 10,658 15,467) 35,994
Net Income (Loss) 373,879) 10,495 380,282) 53,634
Preferred Stock Dividends 2,870 2,872 5,742 5,745
Net Income (Loss) Available for Common Stockholders $ (376,749) $ 7,623 $ (386,024) $ 47,889
Earnings (Loss) per Share
Basic $ (4.01) $ 0.10 $ (4.11) $ 0.64
Diluted $ (4.01) $ 0.10 $ (4.11) $ 0.64
Weighted Average Number of Common Shares Outstanding
Basic 93,993 73,964 93,913 74,873
Diluted 93,993 74,053 93,913 74,956
ENERGY XXI LTD
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 Six Months Ended
December 31, December 31,
2014 2013 2014 2013
In Thousands, Except per Unit Amounts)
Net Income (Loss) as Reported $ 373,879) $ 10,495 $ 380,282) $ 53,634
Interest expense - net 65,910 37,728 131,222 66,891
Depreciation, depletion and amortization 177,333 103,513 338,599 203,729
Goodwill impairment 329,293 -- 329,293 --
Income tax expense (benefit) 8,578) 10,658 15,467) 35,994
EBITDA 190,079 162,394 403,365 360,248
Adjustments to EBITDA
Accretion of asset retirement obligation 12,798 7,425 25,617 14,751
Non-recurring charges (severance costs) 14,122 -- 18,757 --
Adjusted EBITDA $ 216,999 $ 169,819 $ 447,739 $ 374,999
Adjusted EBITDA Per Share
Basic $ 2.31 $ 2.30 $ 4.77 $ 5.01
Diluted $ 2.31 $ 2.29 $ 4.77 $ 5.00
Weighted Average Number of Common Shares Outstanding
Basic 93,993 73,964 93,913 74,873
Diluted 93,993 74,053 93913 74,956
ENERGY XXI LTD
CONSOLIDATED BALANCE SHEETS
(In Thousands, except share information)
December 31, June 30,
2014 2014
Current Assets (Unaudited)
Cash and cash equivalents $ 101,284 $ 145,806
Accounts receivable
Oil and natural gas sales 102,882 167,075
Joint interest billings 19,098 12,898
Other 30,728 5,438
Prepaid expenses and other current assets 50,178 72,530
Deferred income taxes 11,235 52,587
Derivative financial instruments 150,026 1,425
Total Current Assets 465,431 457,759
Property and Equipment
Oil and natural gas properties, net - full cost method of accounting, including $807.8 million and $1,165.7 million of unevaluated properties not being amortized at December 31, 2014 and June 30, 2014, respectively 6,642,565 6,524,602
Other property and equipment, net 23,833 19,760
Total Property and Equipment, net of accumulated depreciation, depletion, amortization and impairment 6,666,398 6,544,362
Other Assets
Goodwill -- 329,293
Derivative financial instruments 8,377 3,035
Equity investments 27,685 40,643
Restricted Cash 6,024 6,350
Other assets and debt issuance costs, net of accumulated amortization 50,128 57,394
Total Other Assets 92,214 436,715
Total Assets $ 7,224,043 $ 7,438,836
LIABILITIES
Current Liabilities
Accounts payable $ 312,568 $ 417,776
Accrued liabilities 91,665 133,526
Notes payable 12,175 21,967
Asset retirement obligations 79,573 79,649
Derivative financial instruments -- 31,957
Current maturities of long-term debt 21,702 15,020
Total Current Liabilities 517,683 699,895
Long-term debt, less current maturities 3,989,922 3,744,624
Deferred income taxes 713,736 701,038
Asset retirement obligations 470,523 480,185
Derivative financial instruments -- 4,306
Other liabilities 8,629 10,958
Total Liabilities 5,700,493 5,641,006
Commitments and Contingencies
Stockholders' Equity
Preferred stock, $0.001 par value, 7,500,000 shares authorized at December 31, 2014 and June 30, 2014
7.25% Convertible perpetual preferred stock, 3,000 and 8,000 shares issued and outstanding at December 31, 2014
and June 30, 2014, respectively -- --
5.625% Convertible perpetual preferred stock, 812,759 and 812,760 shares issued and outstanding at December 31, 2014 and June 30, 2014, respectively 1 1
Common stock, $0.005 par value, 200,000,000 shares authorized and 94,395,593 and 93,719,570 shares issued and outstanding at December 31, 2014 and June 30, 2014, respectively 471 468
Additional paid-in capital 1,842,152 1,837,462
Accumulated deficit 428,200) 19,626)
Accumulated other comprehensive income (loss), net of income taxes 109,126 20,475)
Total Stockholders' Equity 1,523,550 1,797,830
Total Liabilities and Stockholders' Equity $ 7,224,043 $ 7,438,836
ENERGY XXI LTD
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
Six Months Ended December 31 ,
2014 2013
Cash Flows From Operating Activities
Net income (loss) $ (380,282) $ 53,634
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation, depletion and amortization 338,599 203,729
Goodwill impairment 329,293
Deferred income tax expense (benefit) 16,027) 32,872
Change in derivative financial instruments
Proceeds from sale of derivative instruments 29,236 --
Other – net 5,449) 364)
Accretion of asset retirement obligations 25,617 14,751
Loss (income) from equity method investees 738 4,414
Amortization and write-off of debt issuance costs and other 5,615 4,555
Stock-based compensation 2,632 3,971
Changes in operating assets and liabilities
Accounts receivable 33,819 16,999
Prepaid expenses and other current assets 22,483 6,219
Settlement of asset retirement obligations 53,960) 34,038)
Accounts payable and accrued liabilities 171,006) 45,042)
Net Cash Provided by Operating Activities 161,308 261,700
Cash Flows from Investing Activities
Acquisitions 287) 12,564)
Capital expenditures 449,114) 388,227)
Change in equity method investments 12,642 11,694)
Transfer from (to) restricted cash 325 746)
Proceeds from the sale of properties 6,947 1,748
Other 95 72)
Net Cash Used in Investing Activities 429,392) 411,555)
Cash Flows from Financing Activities
Proceeds from the issuance of common and preferred stock, net of offering costs 2,059 3,405
Discount on convertible debt allocated to additional paid-in capital -- 63,432
Repurchase of company common stock -- 153,491)
Dividends to shareholders – common 22,548) 17,798)
Dividends to shareholders – preferred 5,744) 5,745)
Proceeds from long-term debt 1,011,948 1,764,685
Payments on long-term debt 759,851) 1,127,879)
Debt issuance costs 2,302) 18,923)
Other -- 3)
Net Cash Provided by Financing Activities 223,562 507,683
Net Increase (Decrease) in Cash and Cash Equivalents 44,522) 357,828
Cash and Cash Equivalents, beginning of period 145,806 --
Cash and Cash Equivalents, end of period $ 101,284 $ 357,828
Fiscal 2015 Second Quarter Conference Call
Energy XXI will host its fiscal second-quarter conference call Monday, Feb. 9, at 10 a.m. CST. The dial-in numbers are 1 (888) 771-4371 (U.S.) and (0) 80 8238 9578 (U.K.) and the confirmation code is 38758743. 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 .
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.
Bbl/d – barrels per day of oil or condensate
Mcf/d – thousand cubic feet of gas per day.
NRI, Net Revenue Interest – the percentage of production revenue allocated to the working interest after first deducting proceeds allocated to royalty and overriding interest.
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.
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, our ability to integrate acquisitions, 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.
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. To learn more, visit the Energy XXI website at www.EnergyXXI.com .
INQUIRIES OF THE COMPANY Greg Smith Vice President, Investor Relations 713-351-3149 Kim Pinyopusarerk Manager, Investor Relations 713-351-3028
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I'm in it to win it!
NASDAQ DIP and RIP
Here is the best word that describes what i do here.
Intuitive;
means having the ability to understand or know something without any direct evidence or reasoning process.
I was born with it, I'm truly blessed!
Alway's searching for winners'
NASDAQ DIP and RIP
Here is the best word that describes what i do here.
Intuitive;
means having the ability to understand or know something without any direct evidence or reasoning process.
I was born with it, I'm truly blessed!
Alway's searching for winners'
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