Stock Update (NASDAQ:EXXI): Energy XXI Ltd Provides Fiscal Year-End Reserves Update

Energy XXI Ltd (NASDAQ:EXXI) announced fiscal year-end reserves.

“Our proved reserves decreased primarily due to production of 22 million barrels of oil equivalent (“MMBOE”) during fiscal year 2015, as well as the divestiture of non-core assets, price-based adjustments, and our reduced capital expenditures due to the current low commodity price environment,”Energy XXI Chairman, President and Chief Executive Officer John Schiller said. “Our Fiscal Year 2015 reserve additions of 17 MMBOE demonstrate our ability to continue to replace our reserves organically while upgrading our portfolio by delivering on the divesture of our higher cost, non-core properties. It is significant that 68 percent of the proved reserves have already been developed, demonstrating the high quality and potential of our liquid-rich asset base. When looking at our reserves, it is important to note that 100 percent of the total future abandonment costs are booked against proved developed reserves,” Mr. Schiller continued. “The reserves that we lost to price and reduced forecasted capital expenditures over the next five years don’t simply go away; those hydrocarbons are still in the ground and as prices recover we expect to once again realize the value of those barrels.”

The company’s June 30, 2015 fiscal year-end proved reserves were estimated at 183.5 MMBOE. The present value of proved reserves total $2.8 billion. The company has proved and probable reserves totaling 265.7 MMBOE, with a present value of $4.5 billion.

All of the company’s proved reserves are 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
Sales of proved reserves (12.2)
Pricing (19.2)
Decreased capital spending (6.9)
Technical  (20.2)
Total performance 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 closedAugust 11, 2015. At the time of closing, the proved reserves associated with the M21K, LLP assets were estimated at 13 MMBOE with a present value of$82 million at strip prices. The company is working with reserve auditors to complete those estimates. The reserves associated with the M21K, LLPacquisition have never been included in the company’s reserves.

The following fiscal year-ended June 30, 2015 estimated proved, probable and possible 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. (Original Source)

Shares of Energy XXI closed today at $1.45, down $0.15 or 9.37%. EXXI has a 1-year high of $14.76 and a 1-year low of $1.20. The stock’s 50-day moving average is $1.66 and its 200-day moving average is $3.00.

On the ratings front, EXXI has been the subject of a number of recent research reports. In a report issued on July 14, KeyBanc analyst David Deckelbaum maintained a Buy rating on EXXI, with a price target of $3.50, which implies an upside of 141.4% from current levels. Separately, on June 22, Canaccord Genuity’s Stephen Berman reiterated a Buy rating on the stock and has a price target of $5.

According to, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, David Deckelbaum and Stephen Berman have a total average return of -35.5% and -32.5% respectively. Deckelbaum has a success rate of 10.7% and is ranked #3734 out of 3755 analysts, while Berman has a success rate of 15.0% and is ranked #3754.

Energy XXI Ltd is an oil and gas exploration and production company. The Company’s properties are located in the United StatesGulf of Mexico waters and the Gulf Coast onshore.

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