Energy XXI to buy EPL Oil & GasStaff writer ▼ | March 12, 2014
As a result of the merger, Energy XXI will become the largest public independent producer on the Gulf of Mexico shelf, with production of approximately 65,000 barrels of oil equivalent (BOE) per day, 70 percent oil, including a reduction related to the pending divestiture of non-operated interests in the Eugene Island 330 and South Marsh Island 128 fields. Upon completion of the merger, Energy XXI expects to have an enterprise value of approximately $6 billion.
EPL owns working interests in 37 producing fields, mainly concentrated within nine core producing areas: an estimated 91 percent of proved reserves, 88 percent of production and 91 percent of revenues are associated with the Ship Shoal, East Bay, South Timbalier, South Pass 78 and 49, West Delta, Main Pass, Eugene Island and South Marsh complexes. EPL operates 90 percent of its properties, by reserves, similar to Energy XXI's 94 percent.
EPL's year-end reserves estimates were prepared as of Dec. 31, 2013 by Netherland, Sewell & Associates, Inc., independent oil and gas consultants. Including estimates for the subsequently acquired Eugene Island 258/259 field, and adjustments for lease-use natural gas, the properties are estimated to contain net proved and probable reserves of 106.3 million BOE, 71 percent of which is oil.
Proved reserves are estimated at 54.9 million barrels of oil and 139.2 billion cubic feet of natural gas, or a total of 78.1 million BOE, 70 percent of which are proved developed. Offshore leases total 273,713 net acres. At its Dec. 31, 2013 year end, EPL reported total assets of $1.86 billion, with net income for the year totaling $85.3 million. ■