Energy XXI buys EPL Oil & Gas for $2.3 bn
HOUSTON -- Energy XXI has completed the acquisition of EPL Oil & Gas for approximately $2.3 billion, making Energy XXI the largest publicly-traded independent operator on the Gulf of Mexico shelf.
The transaction included the assumption of approximately $805 million of EPL debt, net of cash, payment of approximately $1.02 billion in cash, and approximately 23 million common shares of Energy XXI stock. After closing the transaction, Energy XXI has approximately 93 million shares outstanding (approximately 102 million shares fully diluted).
"This transaction begins a new chapter for Energy XXI," Chairman and CEO John Schiller said. "With assets that fit together hand in glove, along with the additional professionals who have joined our team, we have formed a stronger company focused on delivering value for our shareholders."
Oil and gas production for the combined companies currently approximates 62,000 boepd, 73% oil. Energy XXI expects production in the fiscal fourth quarter, ended June 30, 2014, to average 45,000-46,000 boepd, 68% being oil, which includes one month of EPL' s volumes.
"We are focused on merging the two portfolios and high grading our drilling inventory. Our capital expenditures will focus on low risk development drilling in the fields where we have enjoyed the most success," Schiller said. "Combined, we currently are operating nine rigs, and continue to de-risk our drilling schedule, staying focused on execution by establishing repeatable and predictable programs that will allow oil growth in our core properties."
At West Delta 73 (100% WI/ 87% NRI), Energy XXI has begun drilling horizontal oil development wells with two platform rigs on the recently refurbished WD73-C and WD74-B platforms. At West Delta 30 (100% WI/ 83% NRI), the field' s first horizontal oil well has begun drilling. The multi-well development drilling program at West Delta 30 targets shallow oil and gas pay beginning at 2,400 ft MD.
At West Delta 29 (100% WI/87.5% NRI), the first well to be drilled from the recently installed six slot J platform is expected to be online in July. At West Delta 28 (100% WI/87.5% NRI), the #19 well is being dual completed and expected to be online in July.
"We are excited by West Delta 28 and 29 successes because they represent eastern extensions of our existing West Delta 30 program," Schiller said. "Combined with our success at West Delta 30, we have confirmed a large inventory of opportunities that can be accelerated going into the next fiscal year."
At Ship Shoal 208 (100% WI/83% NRI), the E-13 development well is pending flow testing this month, with an up hole sand set up as a selective.