Energy XXI Rises from the Gulf

Eric Fox, Investopedia (02/01/2010)
"Energy XXI bought producing properties from Mitsui and Co. (NASDAQ:MITSY) for $283 million. Pro forma for this acquisition, the company will have proved reserves of 76.1 million barrels oil equivalent (BOE) and interests in nearly 300 wells. 70% of those reserves are oil, and 85% are offshore. The company's production will jump to 27,000 BOE per day.

The company financed this acquisition with an issuance of 90 million shares of its common stock at $1.90 per share and 1.1 million shares of 7.25% convertible perpetual preferred stock at $100 per share, raising $268.7 million in proceeds.

. . .Energy XXI also invests in minority interests in high-impact exploration wells in the region. . .These high impact exploration efforts paid off recently. Energy XXI reported a large discovery at one of its prospects in the shallow water Gulf of Mexico, along with partner McMoRan Exploration Company (NYSE:MMR). The Davy Jones hit 200 feet of hydrocarbon bearing sands at depths of approximately 29,000 feet. Energy XXI has a 15.8% working interest in the well, and Plains Exploration & Production Company (NYSE:PXP) has a 27.7% working interest.

Energy XXI is raising its profile in the Gulf of Mexico with a steady stream of acquisitions. This, coupled with the recent success on a high-profile exploratory well in the shallow water shelf, has made it a stock to watch."

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