Energy XXI (NASDAQ:EXXI) today announced fiscal fourth-quarter and
full-year financial and operating results for the period ended June
30, 2015, and provided an operations update. Highlights include:
- Production remaining stable into fiscal first quarter at 58,300
BOE/d
- Current liquidity is $679 million
- $124 million available on $500 million revolver
- Proved reserves estimated at 183.5 MMBOE, 75 percent oil
- Non-cash impairment causes ceiling test write-down due to
commodity prices
- Acquisitions and divestitures in fiscal fourth-quarter and
to-date
- Monetized Grand Isle Gathering System
- Sold East Bay field
- Acquired producing Gulf of Mexico assets from M21K, LLC
- Cost control efforts driving per barrel equivalent costs lower
- LOE down 30 percent from fiscal 4Q2014 to 4Q2015
- G&A down 36 percent from fiscal 4Q2014 to 4Q2015
- Principal and cash interest expense reduction through open
market bond purchases
"As an organization, we responded aggressively to the
challenging commodity price environment in fiscal 2015. We focused
on our low risk assets, including horizontal drilling and
recompletions, which allowed us to maintain production and arrest
base declines," Energy XXI Chairman, President and Chief Executive
Officer John Schiller said. "Our operations team is doing an
excellent job of reducing costs in the field and delivering
development opportunities that offer attractive yields in today's
commodity price environment and we continue to practice capital
discipline across our operations. We are actively managing our
balance sheet and our liquidity. We continue to focus on reducing
our debt and to date we have retired over $425 million in face
value of debt lowering our projected annual interest expense by
over $32 million."
For the 2015 fiscal fourth quarter, adjusted EBITDA was $121.8
million on revenues of $219.5 million, as volumes averaged 59,300
barrels of oil equivalent per day (BOE/d), 71 percent of which was
oil. These results compare with 2014 fiscal fourth-quarter adjusted
EBITDA of $184.1 million on revenues of $301.3 million
and volumes of 46,100 BOE/d, 69 percent oil. Net loss
attributable to common shareholders in the 2015 fiscal fourth
quarter totaled ($1.7) billion, or ($17.92) per diluted share,
compared with fiscal 2014 fourth-quarter net loss attributable to
common shareholders of ($18.3) million, or ($0.24) per diluted
share.
For the full fiscal year ended June 30, 2015, adjusted EBITDA
was $760.5 million, compared with $729.7 million generated in
fiscal 2014. Fiscal 2015 net loss attributable to common
shareholders was ($2.4) billion, or ($25.97) per diluted
share, on revenues of $1.4 billion and production of
58,900 BOE/d. These results compare with net income
available for common shareholders for fiscal 2014 of
$6.6 million, or $0.09 per diluted share, on revenues of $1.2
billion and production of 45,000 BOE/d.
Results for the fiscal fourth-quarter and fiscal year-end 2015
were significantly impacted by non-cash ceiling test write-downs of
oil and gas properties, driven by lower commodity prices.
(Adjusted EBITDA is a non-GAAP financial measure and is defined
and reconciled to the most directly comparable GAAP measure under
"Non-GAAP Financial Measures" in the tables below)
Reserves
The company's June 30, 2015 fiscal year-end proved reserves were
estimated at 183.5 MMBOE and have a pre-tax present value of $2.8
billion.
The company's proved reserves are all in the Gulf of Mexico or
U.S. Gulf Coast, 68 percent are proved developed, 75 percent are
liquids (of which 95 percent is crude oil and condensate), and 25
percent are natural gas. Year-over-year proved developed
reserves, as a percentage of total proved reserves, increased by
seven percent.
| Summary of Changes in Proved
Reserves |
| (in MMBOE) |
|
| |
|
| Balance as of June 30,
2014 |
246.2 |
| Production |
(21.5) |
| Extensions, discoveries,
additions |
17.3 |
| Purchases |
-- |
| Sales of proved reserves |
(12.2) |
| Revisions: |
|
| Pricing |
(19.2) |
| Decreased capital
spending (SEC 5-yr rule) |
(6.9) |
| Performance &
Technical |
(20.2) |
|
Total revisions |
(46.3) |
| |
|
| Balance as of June 30,
2015 |
183.5 |
The reserves are reported as of June 30, 2015 and do not include
the reserves, or present value attributed to the M21K, LLP
acquisition which closed August 11, 2015. The company is
working with reserve auditors to complete the reserves
estimates. The reserves associated with the M21K, LLP
acquisition have never been included in the company's reserves.
The following fiscal year-ended June 30, 2015 estimated proved
reserves attributable to the company's net interests in oil and gas
properties were audited by Netherland Sewell & Associates, Inc.
(NSAI), independent oil and gas reserves consultants.
| |
Oil |
Gas |
NGL |
Equivalent |
PV 10 |
| Summary of year-end proved reserves as of
June 30, 2015 |
(MBBL) |
(MMCF) |
(MBBL) |
(MBOE) |
(in thousands) |
| |
|
|
|
|
|
| Proved |
|
|
|
|
|
| Developed |
88,607 |
187,993 |
5,406 |
125,345 |
1,950,353 |
| Undeveloped |
40,989 |
90,550 |
2,070 |
58,151 |
884,083 |
| Total proved reserves PV-10 |
129,596 |
278,543 |
7,476 |
183,496 |
2,834,436 |
| |
|
|
|
|
|
| Future income taxes discounted at 10% |
|
|
|
|
77,026 |
| |
|
|
|
|
|
| Standardized measure of future discounted net
cash flows |
|
|
|
|
2,757,410 |
| |
| (1) We refer to ''PV-10''
as the present value of estimated future net revenues of estimated
proved reserves using a discount rate of 10%. This amount includes
projected revenues less estimated production costs, abandonment
costs and development costs. PV-10 is not a financial measure
prescribed under accounting principles generally accepted in the
U.S. (''U.S. GAAP''); therefore, the table reconciles this amount
to the standardized measure of discounted future net cash flows,
which is the most directly comparable U.S. GAAP financial measure.
Management believes that the non-U.S. GAAP financial measure of
PV-10 is relevant and useful for evaluating the relative monetary
significance of oil and natural gas properties. PV-10 is used
internally when assessing the potential return on investment
related to oil and natural gas properties and in evaluating
acquisition opportunities. We believe the use of this pre-tax
measure is valuable because there are unique factors that can
impact an individual company when estimating the amount of future
income taxes to be paid. Management believes that the presentation
of PV-10 provides useful information to investors because it is
widely used by professional analysts and sophisticated investors in
evaluating oil and natural gas companies. PV-10 is not a measure of
financial or operating performance under U.S. GAAP, nor is it
intended to represent the current market value of our estimated oil
and natural gas reserves. PV-10 should not be considered in
isolation or as a substitute for the standardized measure of
discounted future net cash flows as defined under U.S. GAAP.
Average prices (calculated using the average of the
first-day-of-the-month commodity prices during the 12-month period
ending on June 30, 2015) used in determining future net revenues
were $68.17 per barrel of oil for West Texas Intermediate benchmark
plus $5.62 per barrel for crude quality and location differentials,
for a total of $73.79 per barrel. For NGL's, the average price used
was $29.54 per barrel. For natural gas, the average price used was
$3.08 per MMBtu. |
Production Update/Annual Guidance
Production for the current fiscal first-quarter is averaging
58,300 BOE/d, 71 percent oil. The company has suspended the
development drilling program at West Delta 73 with the completion
of the Sabinal well. The company is focused on low-cost
recompletions and workovers to maintain production, and has
multiple identified recompletions targeted for the remainder of
fiscal 2016. The following table includes the company's
current expectations with respect to production for fiscal year
2016:
| Volume
Projections |
FY
2016 |
| Net Production (per
day) |
|
| Oil, including NGLs
(Bbls) |
35,000 – 40,000 |
| BOE |
54,000 – 59,000 |
| % Oil, including NGLs (using midpoint
of guidance) |
~66 |
Acquisitions and Divestitures
On August 11, 2015 Energy XXI acquired the remaining 80 percent
interest in Energy XXI M21K, LLC, a subsidiary in which it already
owned a 20 percent equity interest and was the operator of the
assets. Energy XXI purchased the remaining interest from its joint
venture partner for consideration consisting of the assumption of
all obligations and liabilities of M21K, including approximately
$25.2 million of outstanding debt which was required to be paid at
closing. The producing assets are 45 percent liquids, offsetting
the liquids sold with the East Bay divestiture on June 30, 2015. As
stated above, the reserve estimates are currently being finalized
by third party reserves auditors.
On June 30, 2015 the company announced the monetization of the
Grand Isle Gathering System to CorEnergy Infrastructure Trust, Inc.
("CorEnergy") for $245 million in cash plus assumption of
abandonment liabilities related to the assets. Concurrently
with the sale, Energy XXI entered into an operating lease agreement
with CorEnergy whereby it will continue to have access to and
operate the pipeline assets, which consist of gathering and
transportation pipelines in the shallow waters of the Gulf of
Mexico, as well as certain storage facilities and salt water
disposal wells at the Grand Isle terminal located onshore adjacent
to Energy XXI's shore base operations. Under the terms of the
lease agreement, Energy XXI will retain any revenues generated from
transporting third party volumes.
The company also closed on the sale of the East Bay Field to a
private buyer for $21 million plus the assumption of plugging
abandonment liability on June 30, 2015. In addition, Energy
XXI will retain a 5% overriding royalty interest on these assets
for a period not to exceed 5 years from the closing date, and
Energy XXI will also retain 50 percent of the deep rights
associated with the East Bay Field. Net proved reserves associated
with the East Bay Field were estimated at approximately 10.2
million barrels of oil equivalent, 94 percent liquids, as of June
30, 2014.
Capital Expenditures and Liquidity
The company's capital program for fiscal year 2016, which began
July 1, 2015, is budgeted at $130 to $150 million.
Development drilling and recompletions account for 25 percent of
planned spending, acquisition spending represents 18 percent,
facilities and land is estimated at 5 percent, capitalized general
and administrative targeted at 17 percent, and plugging and
abandonment represent 35 percent.
As of September 25, 2015, the company had available liquidity of
$679 million. The company has been opportunistic in repurchasing
bonds, and to date has retired over $425 million in face value of
bonds with annualized cash interest expense savings of over $32
million.
Conference Call Today, Sept. 29, at 5 p.m.
CT
Energy XXI will host its year-end conference call Tuesday, Sept.
29, at 5 p.m. CT. The dial-in numbers is 1 (631) 813-4724
(U.S.) and the confirmation code is 27812792. 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.
Copies of Annual Report
A copy of the company's annual report will be posted to
shareholders in due course and a copy will be available on the
company's website at www.EnergyXXI.com.
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, access to capital and ability
to fund drilling costs and otherwise meet Energy XXI's obligations,
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. In addition, Energy XXI
discloses proved reserves in this press release, each of which is
defined in greater detail in the glossary below. 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. Lee Williams, Director of Corporate
Reserves, 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 development 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.
ENERGY XXI LIMITED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In Thousands, except per share information)
(Unaudited)
Adjusted EBITDA is a supplemental non-GAAP financial measure
that is used by management and external users of the Company's
consolidated financial statements, such as industry analysts and
investors. The Company defines Adjusted EBITDA as earnings before
interest expense, income taxes, depreciation, depletion,
amortization, exploration expenses, gains/losses on derivatives
less net cash received or paid in settlement of commodity
derivatives and other similar non-cash or non-recurring charges.
Adjusted EBITDA is not a measure of net income or cash flows as
determined by United States generally accepted accounting
principles, or GAAP. The following table presents a
reconciliation of the GAAP financial measure net income to the
non-GAAP financial measure of Adjusted EBITDA for the periods
presented:
| |
Three
Months Ended June 30, |
Year
Ended June 30, |
| |
2015 |
2014 |
2015 |
2014 |
| |
|
(Restated) |
|
(Restated) |
| |
|
|
|
|
| Net Income (Loss) |
$ (1,690,004) |
$ (15,403) |
$ (2,433,838) |
$ 18,125 |
| Interest expense, net |
105,105 |
51,702 |
323,308 |
162,728 |
| Depreciation, depletion and
amortization |
183,279 |
117,502 |
705,521 |
414,026 |
| Income Tax Expense
(Benefit) |
(380,392) |
(1,818) |
(613,350) |
35,020 |
| (Gains) losses on commodity derivative
contracts — net 1 |
29,711 |
28,265 |
(235,439) |
86,968 |
| Net cash (paid) received for
commodity derivative contracts not designated as hedging
instruments 1 |
3,339 |
(5,524) |
183,403 |
(17,312) |
| Impairment of oil and natural
gas properties |
1,852,268 |
-- |
2,421,884 |
-- |
| Goodwill impairment |
-- |
-- |
329,293 |
-- |
| Accretion of asset retirement
obligations |
12,358 |
9,366 |
50,081 |
30,183 |
| Acquisition and integration
costs and disposition costs |
490 |
-- |
3,603 |
-- |
| One-time litigation
accrual |
-- |
-- |
500 |
-- |
| Severance and departing
director consulting payments |
7,013 |
-- |
24,421 |
-- |
| One time bank fee related to
covenant waiver |
-- |
-- |
1,500 |
-- |
| Consulting payments relating to
Company strategic review |
76 |
-- |
578 |
-- |
| Non-cash compensation expense related to
one-time grant |
(1,483) |
-- |
(990) |
-- |
| Adjusted EBITDA |
$ 121,760 |
$ 184,090 |
$ 760,475 |
$ 729,738 |
| |
|
|
|
|
| Adjusted EBITDA per Share |
|
|
|
|
| Basic |
$ 1.29 |
$ 2.38 |
$ 8.08 |
$ 9.81 |
| Diluted |
$ 1.18 |
$ 2.15 |
$ 7.40 |
$ 9.80 |
| |
|
|
|
|
| Weighted Average Number of Common Shares
Outstanding |
|
|
|
|
| Basic |
94,442 |
77,265 |
94,167 |
74,375 |
| Diluted |
102,985 |
85,661 |
102,732 |
74,445 |
| |
| (1) The adjustments for the
derivative fair value (gains) losses and net cash receipts on
settled commodity derivative instruments have the effect of
adjusting net income (loss) for changes in the fair value of
derivative instruments, which are recognized at the end of each
accounting period because we do not designate commodity derivative
instruments as accounting hedges. This results in reflecting
commodity derivative gains and losses within Adjusted EBITDAX on a
cash basis during the period the derivatives settled. |
PV-10
We refer to ''PV-10'' as the present value of estimated future
net revenues of estimated proved reserves using a discount rate of
10%. This amount includes projected revenues less estimated
production costs, abandonment costs and development costs. PV-10 is
not a financial measure prescribed under accounting principles
generally accepted in the U.S. (''U.S. GAAP''); therefore, the
table below reconciles this amount to the standardized measure of
discounted future net cash flows, which is the most directly
comparable U.S. GAAP financial measure. Management believes that
the non-U.S. GAAP financial measure of PV-10 is relevant and useful
for evaluating the relative monetary significance of oil and
natural gas properties. PV-10 is used internally when assessing the
potential return on investment related to oil and natural gas
properties and in evaluating acquisition opportunities. We believe
the use of this pre-tax measure is valuable because there are
unique factors that can impact an individual company when
estimating the amount of future income taxes to be paid. Management
believes that the presentation of PV-10 provides useful information
to investors because it is widely used by professional analysts and
sophisticated investors in evaluating oil and natural gas
companies. PV-10 is not a measure of financial or operating
performance under U.S. GAAP, nor is it intended to represent the
current market value of our estimated oil and natural gas reserves.
PV-10 should not be considered in isolation or as a substitute for
the standardized measure of discounted future net cash flows as
defined under U.S. GAAP. Average prices (calculated using the
average of the first-day-of-the-month commodity prices during the
12-month period ending on June 30, 2015) used in determining future
net revenues were $68.17 per barrel of oil for West Texas
Intermediate benchmark plus $5.62 per barrel for crude quality and
location differentials, for a total of $73.79 per barrel. For
NGL's, the average price used was $29.54 per barrel. For natural
gas, the average price used was $3.08 per MMBtu.
FINANCIAL INFORMATION
The following information as of and for the years ended June 30,
2014, 2013, 2012, and 2011 and the three months ended June 30, 2014
has been updated to reflect the restatement to our financial
statements. The consolidated financial statements for prior
periods presented in this earnings release have been restated
primarily to reflect the recognition of gains and losses on
derivative financial instruments previously included in accumulated
other comprehensive income (loss) as gain (loss) on derivative
financial instruments in earnings as a component of revenues and
the reclassification of amounts associated with settled contracts
previously included in oil and gas sales revenues to gain (loss) on
derivative financial instruments as a result of not qualifying for
cash flow hedge accounting treatment. The restatement also reflects
resulting adjustments to net oil and natural gas properties,
impairment of oil and natural gas properties and depreciation,
depletion and amortization due to the previous inclusion of the
value of the cash flow hedges in our full cost ceiling test, which
is only permitted if the derivative instruments qualify for cash
flow hedge accounting. Additionally, resulting adjustments to
deferred income taxes and income tax expense (benefit) are also
reflected in the restatement. Our Form 10-K contains restated
financial statements for the year ended June 30, 2015 including (1)
an audited restated balance sheet as of June 30, 2014, (2) audited
restated consolidated statements of operations, consolidated
statements of cash flows, and consolidated statements of
stockholders' equity (deficit) for the years ended June 30, 2014
and 2013, (3) unaudited restated quarterly consolidated financial
statements for the quarters ended September 30, 2014 and 2013,
December 31, 2014 and 2013, March 31, 2015 and 2014 (4) unaudited
restated quarterly consolidated financial information for the
quarter ended June 30, 2014.
| ENERGY XXI
LTD |
| OPERATING
HIGHLIGHTS |
| (Unaudited) |
| |
| |
Year
Ended June 30, |
| |
|
2014 |
2013 |
2012 |
2011 |
| Operating Highlights |
2015 |
(Restated) |
(Restated) |
(Restated) |
(Restated) |
| |
(In thousands, except
per unit amounts) |
| Operating revenues |
|
|
|
|
|
| Oil sales |
$ 1,052,731 |
$ 1,104,208 |
$ 1,067,687 |
$ 1,186,193 |
$ 777,869 |
| Natural gas sales |
117,282 |
135,883 |
112,753 |
88,608 |
101,813 |
| Gain (loss) on derivative
financial instruments |
235,439 |
(86,968) |
(21,508) |
229,809 |
(162,732) |
| Total
revenues |
1,405,452 |
1,153,123 |
1,158,932 |
1,504,610 |
716,950 |
| Percentage of operating revenues from crude
oil |
|
|
|
|
|
| Prior to gain (loss) on
derivative financial instruments |
90% |
89% |
90% |
93% |
88% |
| Operating expenses |
|
|
|
|
|
| Lease operating expense |
|
|
|
|
|
| Insurance
expense |
40,046 |
31,183 |
32,737 |
28,521 |
27,876 |
| Workover and
maintenance |
65,562 |
66,481 |
65,118 |
56,413 |
33,095 |
| Direct lease
operating expense |
357,927 |
268,083 |
239,308 |
225,881 |
178,507 |
| Total lease
operating expense |
463,535 |
365,747 |
337,163 |
310,815 |
239,478 |
| Production taxes |
8,385 |
5,427 |
5,246 |
7,261 |
3,336 |
| Gathering and
transportation |
21,144 |
23,532 |
24,168 |
16,371 |
12,499 |
| DD&A |
705,521 |
414,026 |
363,791 |
350,569 |
274,553 |
| Accretion of asset retirement
obligations |
50,081 |
30,183 |
30,885 |
39,161 |
32,127 |
| Impairment of oil and natural
gas properties |
2,421,884 |
-- |
-- |
-- |
-- |
| Goodwill impairment |
329,293 |
-- |
-- |
-- |
-- |
| General and administrative |
116,500 |
96,402 |
71,598 |
86,276 |
75,091 |
| Total operating
expenses |
4,116,343 |
935,317 |
832,851 |
810,453 |
637,084 |
| Operating income (loss) |
$ (2,710,891) |
$ 217,806 |
$ 326,081 |
$ 694,157 |
$ 79,866 |
| |
|
|
|
|
|
| Sales volumes per day |
|
|
|
|
|
| Natural gas (MMcf) |
102.7 |
89.7 |
88.6 |
81.5 |
67.2 |
| Crude oil (MBbls) |
41.8 |
30.1 |
28.3 |
30.5 |
23.4 |
| Total (MBOE) |
58.9 |
45 |
43.1 |
44.1 |
34.6 |
| Percent of sales volumes from crude oil |
71% |
67% |
66% |
69% |
68% |
| |
|
|
|
|
|
| Average sales price |
|
|
|
|
|
| Oil per Bbl |
$ 68.99 |
$ 100.59 |
$ 103.48 |
$ 106.17 |
$ 90.95 |
| Natural gas per Mcf |
3.13 |
4.15 |
3.48 |
2.97 |
4.15 |
| Gain (loss) on derivative
financial instruments per BOE |
10.95 |
(5.29) |
(1.37) |
14.24 |
(12.87) |
| Total revenues
per BOE |
65.36 |
70.16 |
73.77 |
93.21 |
56.71 |
| |
|
|
|
|
|
| Operating expenses per BOE |
|
|
|
|
|
| Lease operating expense |
|
|
|
|
|
| Insurance
expense |
1.86 |
1.90 |
2.08 |
1.77 |
2.21 |
| Workover and
maintenance |
3.05 |
4.04 |
4.15 |
3.49 |
2.62 |
| Direct lease
operating expense |
16.64 |
16.31 |
15.23 |
13.99 |
14.12 |
| Total lease
operating expense per BOE |
21.55 |
22.25 |
21.46 |
19.25 |
18.95 |
| Production taxes |
0.39 |
0.33 |
0.33 |
0.45 |
0.26 |
| Gathering and
transportation |
0.98 |
1.43 |
1.54 |
1.01 |
0.99 |
| DD&A |
32.81 |
25.19 |
23.16 |
21.72 |
21.72 |
| Accretion of asset retirement
obligations |
2.33 |
1.84 |
1.97 |
2.43 |
2.54 |
| Impairment of oil and natural
gas properties |
112.63 |
-- |
-- |
-- |
-- |
| Goodwill impairment |
15.31 |
-- |
-- |
-- |
-- |
| General and administrative |
5.42 |
5.87 |
4.56 |
5.34 |
5.94 |
| Total operating expenses per
BOE |
191.42 |
56.91 |
53.02 |
50.20 |
50.40 |
| Operating income (loss) per BOE |
$ (126.06) |
$ 13.25 |
$ 20.75 |
$ 43.01 |
$ 6.31 |
| |
|
|
|
|
|
| |
|
|
|
|
|
| ENERGY XXI
LTD |
| CONSOLIDATED BALANCE
SHEETS |
| (In Thousands, except
share information) |
| (Unaudited) |
| |
|
|
| |
June
30, |
June
30, |
| |
|
2014 |
| ASSETS |
2015 |
(Restated) |
| Current Assets |
|
|
| Cash and cash equivalents |
$ 756,848 |
$ 145,806 |
| Accounts receivable |
|
|
| Oil and natural gas sales |
100,243 |
167,075 |
| Joint interest billings |
12,433 |
12,898 |
| Other |
43,513 |
5,438 |
| Prepaid expenses and other current
assets |
24,298 |
72,530 |
| Deferred income taxes |
-- |
52,587 |
| Restricted cash |
9,359 |
-- |
| Derivative financial instruments |
22,229 |
1,425 |
| Total Current Assets |
968,923 |
457,759 |
| Property and Equipment |
|
|
| Oil and natural gas properties,
net - full cost method of accounting, including $436.4 million
and $1,165.7 million of unevaluated properties not being amortized
at June 30, 2015 and 2014, respectively |
3,570,759 |
6,427,263 |
| Other property and equipment,
net |
21,820 |
19,760 |
| Total Property and Equipment,
net of accumulated depreciation, depletion, amortization and
impairment |
3,592,579 |
6,447,023 |
| Other Assets |
|
|
| Goodwill |
-- |
329,293 |
| Derivative financial
instruments |
3,898 |
3,035 |
| Equity investments |
10,835 |
40,643 |
| Restricted cash |
32,667 |
6,350 |
| Other assets and debt issuance
costs, net of accumulated amortization |
81,927 |
57,394 |
| Total Other Assets |
129,327 |
436,715 |
| Total Assets |
$ 4,690,829 |
$ 7,341,497 |
| LIABILITIES |
|
|
| Current Liabilities |
|
|
| Accounts payable |
$ 156,339 |
$ 417,776 |
| Accrued liabilities |
155,306 |
133,526 |
| Notes payable |
-- |
21,967 |
| Asset retirement
obligations |
33,286 |
79,649 |
| Derivative financial
instruments |
2,661 |
31,957 |
| Current maturities of long-term
debt |
11,395 |
15,020 |
| Total Current
Liabilities |
358,987 |
699,895 |
| Long-term debt, less current maturities |
4,597,037 |
3,744,624 |
| Deferred income taxes |
-- |
666,969 |
| Asset retirement obligations |
453,799 |
480,185 |
| Derivative financial instruments |
1,358 |
4,306 |
| Other liabilities |
8,370 |
10,958 |
| Total Liabilities |
5,419,551 |
5,606,937 |
| Stockholders' Equity |
|
|
| Preferred stock, $0.001 par value, 7,500,000
shares authorized at June 30, 2015 and 2014 |
|
|
| 7.25% Convertible perpetual preferred stock,
3,000 and 8,000 shares issued and outstanding at June 30, 2015 and
2014, respectively |
-- |
-- |
| 5.625% Convertible perpetual preferred stock,
812,759 and 812,760 shares issued and outstanding at June 30, 2015
and 2014, respectively |
1 |
1 |
| Common stock, $0.005 par value, 200,000,000
shares authorized and 94,643,498 and 93,719,570 shares
issued and outstanding at June 30, 2015 and 2014, respectively |
472 |
468 |
| Additional paid-in capital |
1,843,918 |
1,837,462 |
| Accumulated deficit |
(2,573,113) |
(103,371) |
| Total Stockholders' Equity |
(728,722) |
1,734,560 |
| Total Liabilities and
Stockholders' Equity |
$ 4,690,829 |
$ 7,341,497 |
| |
|
|
| |
|
|
| ENERGY XXI
LTD |
| CONSOLIDATED STATEMENTS
OF OPERATIONS |
| (In Thousands, except
per share information) |
| (Unaudited) |
| |
|
|
|
| |
Year
Ended June 30, |
| |
|
2014 |
2013 |
| |
2015 |
(Restated) |
(Restated) |
| |
|
|
|
| Revenues |
|
|
|
| Oil sales |
$ 1,052,731 |
$ 1,104,208 |
$ 1,067,687 |
| Natural gas sales |
117,282 |
135,883 |
112,753 |
| Gain (loss) on derivative
financial instruments |
235,439 |
(86,968) |
(21,508) |
| Total
Revenues |
1,405,452 |
1,153,123 |
1,158,932 |
| |
|
|
|
| Costs and Expenses |
|
|
|
| Lease operating |
463,535 |
365,747 |
337,163 |
| Production taxes |
8,385 |
5,427 |
5,246 |
| Gathering and
transportation |
21,144 |
23,532 |
24,168 |
| Depreciation, depletion and
amortization |
705,521 |
414,026 |
363,791 |
| Accretion of asset retirement
obligations |
50,081 |
30,183 |
30,885 |
| Impairment of oil and natural
gas properties |
2,421,884 |
-- |
-- |
| Goodwill impairment |
329,293 |
-- |
-- |
| General and administrative
expense |
116,500 |
96,402 |
71,598 |
| Total Costs and
Expenses |
4,116,343 |
935,317 |
832,851 |
| |
|
|
|
| Operating Income (Loss) |
(2,710,891) |
217,806 |
326,081 |
| |
|
|
|
| Other Income (Expense) |
|
|
|
| Loss from equity method
investees |
(17,165) |
(5,231) |
(6,010) |
| Other income, net |
4,176 |
3,298 |
1,965 |
| Interest expense |
(323,308) |
(162,728) |
(108,659) |
| Total Other
Expense, net |
(336,297) |
(164,661) |
(112,704) |
| |
|
|
|
| Income (Loss) Before Income Taxes |
(3,047,188) |
53,145 |
213,377 |
| |
|
|
|
| Income Tax Expense (Benefit) |
(613,350) |
35,020 |
32,594 |
| |
|
|
|
| Net Income (Loss) |
(2,433,838) |
18,125 |
180,783 |
| Preferred Stock Dividends |
11,468 |
11,489 |
11,496 |
| Net Income (Loss) Attributable to Common
Stockholders |
$ (2,445,306) |
$ 6,636 |
$ 169,287 |
| |
|
|
|
| Earnings (Loss) per Share |
|
|
|
| Basic |
$ (25.97) |
$ 0.09 |
$ 2.14 |
| Diluted |
$ (25.97) |
$ 0.09 |
$ 1.94 |
| |
|
|
|
| Weighted Average Number of Common Shares
Outstanding |
|
|
|
| Basic |
94,167 |
74,375 |
79,063 |
| Diluted |
94,167 |
74,445 |
87,263 |
| |
|
|
|
| |
|
|
|
| ENERGY XXI
LTD |
| CONSOLIDATED STATEMENTS
OF CASH FLOWS |
| (In
Thousands) |
| (Unaudited) |
| |
|
|
|
| |
Year
Ended June 30, |
| |
|
2014 |
2013 |
| |
2015 |
(Restated) |
(Restated) |
| |
|
|
|
| Cash Flows From Operating Activities |
|
|
|
| Net income (loss) |
$ (2,433,838) |
$ 18,125 |
$ 180,783 |
| Adjustments to reconcile net income (loss) to
net cash provided by operating activities: |
|
|
|
| Depreciation, depletion and
amortization |
705,521 |
414,026 |
363,791 |
| Impairment of oil and natural
gas properties |
2,421,884 |
-- |
-- |
| Goodwill impairment |
329,293 |
-- |
-- |
| Deferred income tax expense
(benefit) |
(614,383) |
31,379 |
19,722 |
| Change in fair value of
derivative financial instruments |
(52,036) |
69,656 |
20,851 |
| Accretion of asset retirement
obligations |
50,081 |
30,183 |
30,885 |
| Loss from equity method
investees |
17,165 |
5,231 |
6,010 |
| Amortization and write-off of
debt issuance costs and other |
23,247 |
13,774 |
6,898 |
| Stock-based compensation |
4,124 |
6,711 |
3,505 |
| Changes in operating assets and
liabilities |
|
|
|
| Accounts
receivable |
51,284 |
63,283 |
1,690 |
| Prepaid expenses
and other assets |
48,062 |
6,019 |
12,499 |
| Settlement of
asset retirement obligations |
(106,573) |
(57,391) |
(41,939) |
| Accounts payable
and accrued liabilities |
(113,078) |
(55,536) |
33,453 |
| Net Cash Provided
by Operating Activities |
330,753 |
545,460 |
638,148 |
| |
|
|
|
| Cash Flows from Investing Activities |
|
|
|
| Acquisitions, net of cash |
(301) |
(849,641) |
(161,164) |
| Capital expenditures |
(723,829) |
(788,676) |
(816,105) |
| Insurance payments
received |
3,920 |
1,983 |
-- |
| Change in equity method
investments |
12,642 |
(34,294) |
(16,693) |
| Transfer from (to) restricted
cash |
(14,676) |
(325) |
-- |
| Proceeds from the sale of
properties |
261,931 |
126,265 |
-- |
| Other |
(135) |
113 |
(41) |
| Net Cash Used in
Investing Activities |
(460,448) |
(1,544,575) |
(994,003) |
| |
|
|
|
| Cash Flows from Financing Activities |
|
|
|
| Proceeds from the issuance of
common and preferred stock, net of offering costs |
2,336 |
3,994 |
7,021 |
| Proceeds from convertible debt
allocated to additional paid-in capital |
-- |
63,432 |
-- |
| Repurchase of company common
stock |
-- |
(184,263) |
(58,666) |
| Dividends to shareholders –
common |
(24,436) |
(34,680) |
(25,992) |
| Dividends to shareholders –
preferred |
(11,468) |
(11,489) |
(11,496) |
| Cash restricted under revolving
credit facility related to property sold |
(21,000) |
|
|
| Proceeds from long-term
debt |
2,586,572 |
3,420,873 |
1,576,551 |
| Payments on long-term debt |
(1,747,849) |
(2,079,485) |
(1,243,848) |
| Debt issuance costs |
(43,352) |
(33,461) |
(4,805) |
| Other |
(66) |
-- |
3 |
| Net Cash Provided
by Financing Activities |
740,737 |
1,144,921 |
238,768 |
| |
|
|
|
| Net Increase (Decrease) in Cash and Cash
Equivalents |
611,042 |
145,806 |
(117,087) |
| Cash and Cash Equivalents,
beginning of period |
145,806 |
-- |
117,087 |
| Cash and Cash Equivalents, end
of period |
$ 756,848 |
$ 145,806 |
$ -- |
| |
|
|
|
| |
|
|
|
| |
|
|
|
| |
|
|
|
| Other Information-Gain
(loss) on Derivative Financial Instruments |
| (Unaudited) |
| |
|
|
|
|
| |
Three
Months Ended June 30, |
Year
Ended June 30, |
| |
2015 |
2014 |
2015 |
2014 |
| |
|
(Restated) |
|
(Restated) |
| |
|
|
|
|
| Cash Settlements, net of purchased put
premium amortization |
3,339 |
(5,524) |
81,049 |
(17,312) |
| Proceeds from monetizations |
-- |
-- |
102,354 |
-- |
| Unrealized change in fair value |
(33,050) |
(22,741) |
52,036 |
(69,656) |
| |
|
|
|
|
| Gain (loss) on derivative financial
instruments |
(29,711) |
(28,265) |
235,439 |
(86,968) |
Glossary
Proved Oil and Gas Reserves -- Those quantities
of crude oil and gas, which, by analysis of geoscience and
engineering data, can be estimated with reasonable certainty to be
economically producible -- from a given date forward, from known
reservoirs, and under existing economic conditions, operating
methods and government regulations -- prior to the time at which
contracts providing the right to operate expire, unless evidence
indicates that renewal is reasonably certain, regardless of whether
deterministic or probabilistic methods are used for the estimation.
The project to extract the hydrocarbons must have commenced or the
operator must be reasonably certain that it will commence the
project within a reasonable time. This definition has been
abbreviated from the definition of "Proved oil and gas reserves"
contained in Rule 4-10(a)(22) of SEC Regulation S-X.
Proved Developed Reserves -- Reserves are
categorized as proved developed if they are expected to be
recovered from existing wells.
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.
MBBL – thousand barrels of oil.
MBOE – thousand barrels of oil equivalent.
MMBOE – million barrels of oil equivalent.
MMBTU – million British thermal units.
MMCF – million cubic feet of gas.
CONTACT: ENQUIRIES OF THE COMPANY
Energy XXI
Greg Smith
Vice President, Investor Relations
713-351-3149
gsmith@energyxxi.com
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