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Energy XXI

TICKER: EXXI:NASDAQ

Energy XXI has implemented an "acquire and exploit" growth strategy to build a geographically focused portfolio with some of the highest per-unit margins in the industry. It has completed five major acquisitions totaling approximately $2.5B since its founding in October 2005, creating a company with more than 116 MMboe/d of proved reserves and about 42 Mboe/d of production, 67% of which is oil. Energy XXI operates or has an interest in 7 of the 11 largest oil fields in the Gulf of Mexico. The company's core properties are located in coastal and offshore Louisiana.


The information provided below is from analysts, newsletters and other contributors. Please contact the company and visit its website before making an investment decision.

Expert Comments:

Andrew Coleman, Raymond James (8/15/14) "Stars are not lining up for Energy XXI as the stock is yet again being punished; this time for conservative guidance, despite in-line Q4 FY/14 numbers. . .we reiterate our Strong Buy rating considering 1) We expected the Q4 FY/14 print to be mixed and 2) The outlook from here features almost twice the drilling activity as compared to last fiscal year, lower exploration spend, and lower risk drilling, which should drive volumes and NAV higher."

Brian Foote, Clarkson Capital Markets (8/14/14) "Energy XXI management guides what we view to be a highly-achievable 59–64k boe/d from the combined assets, with emphasis on oil and cash generation to reduce the current 67% debt/capital levels. This being management's first attempt at forward guidance, we note the production is also potentially conservative as it includes 10% production downtime (half of which is controllable, per management). . .the market currently discards Energy XXI at a substantial $2.5B discount. . .management knows what needs to be done—we would purchase shares while they do it."

Andrew Coleman, Raymond James (8/5/14) "For fiscal Q4/14, production was 46.1 Mboepd, in line with both our/consensus 45.7/45.9 Mboepd estimates and a hair above the high end of the prior 45–46 Mboepd guidance. . .proved reserves of 246 MMboe grew 38% year over year."

Brian Foote, Clarkson Capital Markets (6/12/14) "We note synergies in Energy XXI's EPL Oil & Gas Inc. transaction beyond its Exxon Mobil Corp. transaction due to fields being adjacent (west delta 30 and 29 fields for example). The company is running nine rigs now, and we expect next fiscal year, which commences in just over three weeks, to demonstrate the synergistic acquisition's rationale."

The Energy Report Interview with Porter Stansberry (6/12/14) "Energy XXI fits into the strategy of owning the best assets in good locations. Its strategy is to buy large, existing conventional reservoirs of oil and gas in the shallow Gulf areas and, using new technologies, revive production. It has zero exploration risk. Energy XXI is located very close to the major distribution areas of the Gulf Coast and it has low production costs because of the conventional nature of the reservoirs. The company also has a kicker. It owns a share in nearly a dozen ultra-deep wells that contain trillions of cubic feet of gas and could also contain huge amounts of oil. If these wells can be put into production, Energy XXI could quickly become a major producer of hydrocarbons. I like this strategy and because so much investor attention is focused on onshore production right now, good Gulf of Mexico resources have simply been forgotten." More >

more comments

Andrew Coleman, Raymond James (6/5/14) "We reiterate our Strong Buy rating on Energy XXI. . .having closed the Energy Partners Ltd. merger, management aims to quickly integrate the combined assets and realize operating synergies above their initial $80M target. . .overall, we expect the company to generate at least 5% organic production growth over the next 12 months from the combination of a larger backlog and lower-risk profile."

Michael Glick, Johnson Rice & Co. (6/4/14) "Energy XXI announced the close of its merger with EPL Oil & Gas Inc. and provided an operations update. . .the company does have a high level of current activity, with nine rigs currently running, and should be well positioned to grow volumes/cash flow during the summer. In addition, EXXI expects cost savings and synergies to exceed initial targets."

Bret Jensen, Seeking Alpha (5/20/14) "Positive catalysts for Energy XXI are starting to emerge that could lead to significant capital appreciation for patient investors. The company should gain significant synergies through a recent merger, the stock is substantially below analyst price targets and shares provide a nice dividend yield as well."

Andrew Coleman, Raymond James (5/19/14) "We are raising our rating on Energy XXI to Strong Buy from Outperform, and reiterating our $29/share price target on shares. In roughly two weeks, the company's merger with EPL Oil & Gas Inc. should be complete (shareholder vote on May 30), giving the company access to a larger low-risk activity set with opportunities for operating and capital synergies."

Andrew Coleman, Raymond James (5/1/14) "Energy XXI's Q3 FY14 results were in line, making this a relatively uneventful quarter as the focus remains on closing the EPL Oil & Gas Inc. acquisition. . .as the execution profile improves and given our below-consensus oil deck, we remain focused on proved developed producing value and note the potential upside catalysts. We reiterate our Outperform rating and are raising our target price to $29."

Bret Jensen, Seeking Alpha (4/29/14) "Energy XXI is one exploration and production concern that looks well positioned to produce outsized gains in the future. . .the company should see brighter days in 2015 and prospective investors should start to plan to take advantage of that opportunity."

Brian Foote, Clarkson Capital Markets (4/28/14) "With a May 30 shareholder vote, the combination of Energy XXI and EPL Oil & Gas Inc. creates, in our opinion, a unique and inexpensive investment opportunity, given this will be the only shelf-focused public company. . .given the strategic and operating logic we see in the transaction, we believe Energy XXI shares should be purchased ahead of the closure of the transaction."

The Energy Report Interview with Andrew Coleman (4/24/14) "Last month, Energy XXI announced that it will acquire Energy Partners. This is part of a plan to create the largest pure-play Gulf of Mexico shelf producer. In my view, this will allow Energy XXI to boost its low-risk inventory, effectively resetting the clock on its development plans. It is similar to what happened after the firm's acquisition of properties from Exxon Mobil Corp. in 2010: the increased inventory allowed it to have a deeper backlog and to be more selective with its development plans. This deal with Energy Partners allows Energy XXI to do the same thing. In the short term, it will find low-hanging fruit to monetize, generating more production growth and cash flows over the next 12–24 months." More >

Andrew Coleman, Raymond James (3/13/14) "We reiterate our Outperform rating and are raising our price target to $28/share on Energy XXI. . .yesterday morning, the company announced it would acquire Energy Partners Ltd. in a cash and stock deal worth $2.3B."

Brian Foote, Clarkson Capital Markets (3/12/14) "Energy XXI's purchase of Eagle Plains Resources Ltd. is an accretive transaction at a good price, combining two great companies. . .CEO John Schiller and his team are creating a $5.5B, 65 Mboe/d, growing Gulf of Mexico (GOM) shelf pure play with significant development and exploration upside. . .synergies appear obvious to us, the combination of two well-run GOM shelf companies whose acreage positions fit like a glove. . .we reiterate our Outperform rating and $52/share price target, as we believe there is now an even stronger argument for multiple expansion."

Morning Coffee (3/7/14) "EXXI is one of our top gas picks in the exploration and production space."

Michael Glick, Johnson Rice & Co. (2/10/14) "Heading into the company's June fiscal year-end, Energy XXI Ltd. will materially ramp activity in the West Delta area. The company has 12 horizontals planned over the next 10 months, more than the entire program to date, which has tripled production at WD 73. . .Energy XXI should be in a position for strong oil growth in Q4 FY/14 and into FY/15."

Andrew Coleman, Raymond James (2/10/14) "We are reiterating our Outperform rating on Energy XXI given its current valuation. . .management has hedged ~60% of the next 12 months' oil production with ~$90/bbl floors. Additionally, the ongoing share buyback could repurchase another 5% of shares, exploration catalysts are firming in late calendar 2014 and horizontal well inventory is softening the company's underlying base decline rate."

Brian Foote, Clarkson Capital Markets (2/7/14) "For Energy XXI Ltd., 10% oil production growth appears achievable, and the horizontal program seems to be running well; management confirmed 46 Kboe/day current production. . .we would encourage investors to take advantage of this selloff, which has taken shares of the company to levels last seen in 2011. . .we think ample liquidity, cash flow and valuation support exist."

Andrew Coleman, Raymond James (1/22/14) "We are sticking with our Outperform rating for Energy XXI Ltd. . .Freeport-McMoran Copper & Gold Inc. noted 150 ft of pay was logged at its Lomond North well on the Ultra-Deep Shelf, for which Energy XXI holds an 18% interest. . .management's buyback program looks ~75% complete with ~$80M left on its authorization."

Oil & Gas 360, Seeking Alpha (1/16/14) "In an operations update on Jan. 7, 2014, Energy XXI announced production rates of more than 30 Mbblpd (average of 45 Mboepd) for fiscal Q2/14 ended Dec. 31, 2013. The amount is an increase compared to Q1/14's total of 29.7 Mbblpd."

Derek Chipman, Seeking Alpha (1/14/14) "Energy XXI continues to offer an excellent reward opportunity through the lucrative resources it has access to, and by maintaining a strong capital structure, its valuation is considerably attractive. . .the company trades at a hefty discount to its net asset value. . .overall, Energy XXI's fundamentals provide strong reinforcement for the upside potential investors are waiting for."

Andrew Coleman, Raymond James (1/7/14) "We are trimming our near-term growth outlook for Energy XXI given their latest operations report, but our estimates are rising on our new 2014 price deck. Shares were down last week on news of Merlin being a dry hole, but we were not giving credit for that well in our model. Overall, we see Proved Developed Producing NAV at $26/share and Proved Undeveloped adding another $16/share—factoring in $100/bbl realizations. Management has reinitiated its $250M buyback program given the current price level, and activities at West Delta along with Main Pass (Don Carlos) paint an improving picture of medium-term growth. We reiterate our Outperform rating."

Michael Glick, Johnson Rice & Co. (1/7/14) "Energy XXI provided a post Q2 FY/13 operations update, announcing volumes approximated 45 Mboe/d, in-line with our estimate. EXXI continues to grow oil volumes (+300 bbl/d QOQ) with minimal development drilling. On the exploration front, EXXI announced a success at the WD 30 Stricker prospect. . .EXXI also announced an attractive (small) acquisition at West Delta and provided an update on its buyback program (repurchased 11% of outstanding shares to date)."

Brian Foote, Clarkson Capital Markets (1/7/14) "This morning, Energy XXI announced preliminary production and operations stats for the Q2/14. . .a miss on gas production is the main new negative in this ops report, and we think is more than offset by oil production surpassing the 30 Mbbl/d mark and positive activity in core exploration and development areas. Production growth on the oil side is the most important variable in our view for revaluation, as the company trades at what we see as a severe discount to proved reserve value."

The Energy Report Interview with Chad Mabry (12/19/13) "We have a Buy rating on Energy XXI. Shares of Energy XXI, on a relative basis, are more attractive because they are trading below their proved-only valuation and the company is pursuing a number of exploration objectives, which could cause the stock to outperform. . .Energy XXI is the third largest oil producer on the shelf. It is taking advantage of its footprint in the area and its expertise of the geology in the basin to pursue some deeper exploration targets, not necessarily the ultra-deep. We should get some results into 2014 from the company. Energy XXI [has] become [a] consolidator on the shelf. Looking into 2014, we wouldn't be surprised to see Energy XXI target some larger objectives internationally, specifically in Malaysia, which offers a nice analog field to what we've seen in the Gulf of Mexico, but with larger scale." More >

Brian Foote, Clarkson Capital Markets (11/19/13) "Energy XXI reported the pricing of the upsized $350M Rule 144A convertible note offering launched yesterday, with the original size estimated at $300M. . .the convertible notes will mature in December 2018, pay 3% interest semiannually and convert into 24.7523 shares per note. . .the company launched a concurrent buyback of 2,776,200 shares of common, or $76M, representing 3.7% of the float. . .we think the convertible notes are an inexpensive way to grow the company, so we maintain our Outperform rating and $52 target."

Derek Chipman, Seeking Alpha (11/7/13) "Energy XXI just finished its Q1 FY14 with EBITDA of $199.6M and net income of $40.3M, which translates to EPS of $0.51 on a diluted basis; on a year-over-year basis, both EBITDA and net income experienced favorable increases, which were 41% and 162%, respectively. Analysts even underestimated the company's total revenue potential for this quarter, which came out to $324.5M; for the most part, these metrics are quite favorable, with the company seeing improvement across the board."

Mark Lear, Credit Suisse (10/30/13) "We maintain our Outperform rating for Energy XXI. . .the company has already identified fifty drilling opportunities having only mapped 20% of its WD30 oil field. The initial well is targeting an untested fault block and is estimated to recover 1.9 MMboe for a drill and complete cost of $10M."

Brian Foote, Clarkson Capital Markets (10/30/13) "Following a quarter marked by generally well-received production guidance and the right trajectory of oil production (up) and lease operating expense costs (down), shares are down 7.5%. . .we continue to rate the stock Outperform, and our target is unchanged at $52, so we view the selloff as an opportunity."

Andrew Coleman, Raymond James (10/28/13) "We're reiterating our Outperform rating on Energy XXI after this week's deep dive into the company's portfolio and upcoming activities at the annual investor event. For upside there's a basket of potentially impactful exploration catalysts on deck for 2014, but the stock looks cheap just based on the value of its proven reserves. . .management plans to add value by chasing 'the next 5%,' driving up the total value of these reserves."

Andrew Coleman, Raymond James (10/22/13) "We reiterate our Outperform rating after a business-as-usual press release from Energy XXI. Production was roughly in-line with our model and guidance for the year-end exit rate of 47,000 boe/day has not changed. . .the West Delta 73 horizontal program continues to yield strong well results with Big Sky 3 and the Hulk both delivering strong initial production (1,275 bbl/d and 825 Mcf/d for the former and 1,690 bbl/d and 1,700 Mcf/d for the latter). . .with a choppy fiscal 2013 in the rear view mirror, we believe Energy XXI can focus on the robust catalyst profile that lies ahead."

Andrew Coleman, Raymond James (9/23/13) "We are reiterating our Outperform rating for Energy XXI following the issue of $500M in senior notes, which will enable the company to term out its credit facility and should provide a comfortable liquidity cushion if our ugly 2014 commodity forecast is correct. We continue to believe that the current discount to the value of EXXI's proved reserves is unjustified and anticipate that the company's array of potentially accretive drilling projects should help boost those reserves and drive up the market value."

Bret Jensen, Seeking Alpha (9/11/13) "Energy XXI recently beat quarterly earnings estimates. Proven reserves have grown 50% in the last year and its organic reserve replacement rate was just under 400% over the last year as well. . .the company has a strong balance sheet. . .the 15 analysts that cover the stock have a median price target of $37 a share, which is ~35% above its current price. . .earnings are on track to post better than a 15% gain this fiscal year and analysts are projecting another gain of 15% to 20% in FY/14. "

Oil & Gas 360, Seeking Alpha (8/27/13) "Energy XXI is entering FY/14 with expanded growth opportunities. . .the company is extensively exploring its salt dome plays, while its two recent wide-azimuths shoots revealed additional locations. Further testing could significantly improve the understanding of salt features on the shelf and highlight both deeper and shallower opportunities around the salt. . .Energy XXI generated a significant gain in proved reserves for the fiscal year, moving to 179 MMBoe from 119 MMBoe. This is a 50% improvement year over year from June 30, 2012. "

Patrick Rigamer, Iberia Capital Partners (8/23/13) "Energy XXI Ltd. closed the books on FY/13 with an earnings beat and a solid reserve report. . .Energy XXI plans to focus on blocking and tackling and concentrate on high-value, low-risk projects while spending more efficiently and generating free cash flow. . .look for Energy XXI to ramp activity in FY/15 and return to a higher-growth trajectory. . .we believe that Energy XXI's conservative growth targets are achievable, and that the company should hit its numbers throughout the year. With upcoming high-potential catalysts and a $155M share buyback in place, we continue to like Energy XXI and maintain our Outperform rating."

Bret Jensen, Seeking Alpha (8/22/13) "Energy XXI Ltd. announced quarterly earnings of $0.72/share this week, which easily beat consensus estimates; it also said FY/13 year-end proved reserves were ~179M Boe, up 50% from a year earlier; 62 MMboe of additional proved reserves came from discoveries, extensions of existing fields and performance revisions. . .the company has grown consistently through a series of acquisitions and joint ventures. . .Energy XXI is providing growth and value investors a great entry point at just $26/share. . .the company has done an impressive job of growing reserves, paring debt and growing shareholder's equity over the past four years."

Andrew Coleman, Raymond James (8/22/13) "Energy XXI Ltd. reported EPS/CFPS/EBITDA of $0.66/$2.06/$209M, which deftly topped our estimates at $0.45/$2.01/$196M and also easily beat consensus' $0.46/$1.96/$197M. . .the financials got a boost from better-than-expected pricing but the main source of the beat was lower operating costs. . .the bottom line is that the company looks cheap given the oil and gas assets on the balance sheet, and as it gets better at turning these assets into revenue (and EBITDA) then the better it will look on a multiple basis too."

Mark Lear, Credit Suisse (8/22/13) "Following Q4 FY/13 earnings, we maintain our Outperform rating and $35 target price for Energy XXI. . .the company plans to shift capital back to the development drilling of its lower-risk projects in FY/14, where it has seen repeatable results and focus on cash-flow generation. . . .Energy XXI reported 49% and 40% year-over-year increases in proven and P2 reserves, respectively, and anticipates accelerating its drilling program in FY/15 to drive organic production and cash flow growth. In addition, we still believe there is still upside in conventional shelf exploration (Exxon and Apache joint ventures) and the Ultra Deep shelf."

Brian Foote, Clarkson Capital Markets (8/21/13) "Energy XXI reported Q4 FY/13 EPS of $0.69 fully diluted versus our estimate of $0.55 and the consensus $0.47. . .the company cited the Big Sky 3 well as the fifth consecutive success in its horizontal drilling program in West Delta 73 field. . .near-term catalysts, beyond the horizontal drilling program, include salt dome JV drilling through Heron and Merlin—the company has three operated rigs working in the Gulf as well as four rigs drilling in both the ultra-deep and shelf exploration. To us, Energy XXI has the combination of steady growth, inexpensive valuation and strong catalyst."

Brian Foote, Clarkson Capital Markets (8/12/13) "Energy XXI management revealed its estimate of 3P resource of 310 MMboe. . .this represents a 104 MMboe improvement year-over-year in 3P, or 50%, with nearly 60% of the increase due to proved reserves booked. . .we reiterate our Outperform rating ahead of the company's Q4 FY/13 earnings report next week."

The Energy Report Interview with Jocelyn August (7/30/13) "We're still looking for information on Davy Jones, which is a project of McMoRan Exploration Co. and Energy XXI. It's in ultradeep water in the Gulf of Mexico. We're waiting for some flow-test results, which could happen as close as August, definitely by the end of the year. . .at this point, we're looking for information as to whether it can proceed. The flow-test results will be a deciding factor. It's an interesting project because no other companies have tried to go that deep in the Gulf of Mexico; it has pretty big implications for that type of drilling." More >

Michael Fitzsimmons, Seeking Alpha (7/17/13) "Energy XXI's organic reserve replacement ratio was 390%. Combined with the stock buybacks and operational update, it is clear the company is even more undervalued now than it was a month ago. . .I expect analysts' upgrades and for the stock to easily trade up to $35/share before the end of the year, a 43% gain from today's closing price ($24.39). . .Energy XXI is vastly undervalued, nicely hedged and shareholder friendly."

Andrew Coleman, Raymond James (7/17/13) "Energy XXI executed on the operating front in Q4 FY13, but more importantly announced a significant uptick in FY13 Proven reserves, which means we're sticking with our Outperform rating and raising our price target to $35. . .the company reported Proven reserves of 179 MMboe (75% liquids), substantially better than our 137 MMboe estimate and 50% higher year over year."

Brian Foote, Clarkson Capital Markets (7/16/13) "Energy XXI reported reserve additions of 62 MMboe and an updated PV-10 value of 2P of $8.4B and Proven alone of $6.1B. . .reserves increased a strong 50% year over year, with a 390% organic reserve replacement rate, and the company's horizontal drilling program yielded an 82% success rate."

Michael Glick, Johnson Rice & Co. (7/16/13) "Energy XXI's highly impressive (~50% year-over-year) reserve growth should materially improve market perception about the value creation potential of the company's asset base and its ability to execute thereon. With a PV-10 that dwarfs Energy XXI's current enterprise value, exploration catalysts, a refocused operational plan that will not only drive efficiency gains but a return to free cash flow in FY14 and an aggressive buyback program, we believe the stock is poised to outperform."

The Energy Report Interview with Sam Wahab (6/27/13) "One company of note that I cover in the Gulf of Mexico is Energy XXI. It entered the region in 2005 and purchased key assets from Exxon in 2010. The potential of U.S. exports has pushed the company to invest in the Gulf even more this year. The company budgeted a capex program of $750M. Approximately 75% of the firm's fiscal 2013 budget targets development drilling, and 25% of the budget targets exploration drilling. Energy XXI has a geographically focused portfolio with some of the largest margins in the industry. It is focused on developing acquired properties while ramping up a complementary exploration program designed to provide organic growth. Also, it has more than 120 MMboe in proved reserves. It is set to soon produce 50 Mboe/d, of which 70% is oil. The signs look good for this company." More >

Michael Fitzsimmons, Seeking Alpha (6/10/13) "Energy XXI has several catalysts, which should move the stock: It has excellent reserve growth, excellent realized prices and is attractively hedged, it trades at a significant discount to NAV and is shareholder friendly. The combination of these factors could easily push the company to $35/share by the end of 2013 for a ~6.5 month gain of 37%. . .being so undervalued, Energy XXI could be a juicy takeover target for a mid or large sized oil company looking to pick up excellent reserves on the cheap. . .the company is a Buy."

The Energy Report Interview with Andrew Coleman (6/4/13) "Energy XXI management is trying to draw attention to the fact that it expects to have free cash from the asset that it produces from, which is not something we've seen a lot companies focus on historically in the E&P business. Most E&P companies are growth companies, with historically high levels of reinvestment of cash flows to fund future growth.

With Energy XXI recently taking production guidance down to 10% for the next 12 months, it's going to have a little more capital available to buy back shares. By my model, assuming the oil price is around $95/bbl net, the value of the company's proved reserves alone is somewhere in the $30/share range. If the company buys back shares for $25/share, that is 15–20% cheaper than what the assets are worth. That gives the company no credit for any future drilling potential, too. Gulf Coast players tend to trade at some of the most conservative multiples in the E&P peer group, but that doesn't reflect the fact that they generate a lot of cash flow. . .Energy XXI is always looking at acquisitions. It's always looking at optimizing the drilling program. With the share buyback, the company has tried to put a little more emphasis on the fact that it recognizes the value of cash flow to investors beyond the growth side of the E&P business." More >

Mark Lear, Credit Suisse (5/30/13) "We reiterate our Outperform rating for Energy XXI. . .the application [of horizontal drilling] at West Delta 73 is paying off in spades. With an investment of $51M in horizontal drilling in the field, the company estimates it has developed 7.7MMboe reserves with an estimated PV10 of $283M. . .Energy XXI recently brought on Bearclaw, its best horizontal well to date with initial production of 2,600 bbl/d and 3,200 MMcf/d, and as a result of the continued success the company plans to add a second platform rig in the field."

Michael Glick, Johnson Rice & Co. (5/6/13) "Energy XXI announced a 71% increase in its quarterly dividend to $0.12/share from $0.07/share, and a $250M stock repurchase program, illustrating the confidence of the board (and the company) in the value of the asset base. Considering that the stock is trading well below pro forma PV-10 value at $109/bbl and $3.17/Mcf, we expect that the company will be active in the market buying back shares. Although consensus estimates are likely to move lower given updated guidance, we believe that the dividend/buyback announcement combined with organizational changes, refocused operations and drilling improvements effectively signal that the company has reached or is nearing a turning point operationally, and that the stock should follow in kind."

Michael Glick, Johnson Rice & Co. (5/6/13) "Energy XXI announced strong results from two horizontals, Bear Claw at West Delta and Camacho at Main Pass, marking the most significant horizontal success since Hyden came online in January. . .Bear Claw was brought online within the past week at 2,600 bbl/d and 3.2 MMcf/d, while Camacho came online at 723 bbl/d and 8.4 MMcf/d. . .at Grand Isle, the company also recently brought online Gelato (which had been delayed by permitting) at 500 bbl/d and 18 MMcf/d. West Delta and Main Pass are likely to be the primary focal points for horizontal drilling in FY14."

Mukesh Verma, Insider Monkey (3/26/13) "At the end of Q4/12, a total of 21 of the hedge funds we track were long in Energy XXI. . .with hedge funds' sentiment swirling, there exists a few key hedge fund managers who were boosting their holdings meaningfully."

Michael Glick, Johnson Rice & Co. (3/19/13) "Energy XXI announced an exploration joint venture with Apache Corp. covering 135 blocks associated with salt dome structures on the central Gulf of Mexico shelf. A wide-azimuth shoot is currently underway, which could help to identify significant overlooked hydrocarbons around salt structures on the shelf. . .the company's South Pass recompletion program continues to see success, with the A-19 coming online this month at 6 Mmcf/d and 135 bbl/d of condensate; production from the field has doubled since the company began operations in October."

The Motley Fool (3/7/13) "Energy XXI has made a series of savvy buys leading to impressive production and reserve growth. . .Pendragon is proof of concept for Merlin. . .Pendragon success significantly enhances the probability that Merlin will be worth drilling. . .the company's track record of incorporating acquisitions is impressive, especially when considering the size of some of its acquisitions."

Peter Horn, Motley Fool (3/5/13) "Energy XXI has an impressive growth record, built around the acquisition of some large legacy oil fields in the Gulf of Mexico. . .the company has turned to joint ventures to advance its strategy, partnering with Freeport-McMoRan Copper & Gold Inc. on its ultra-deep shelf project. . .that project proved that Wilcox strata that are ridiculously prolific in the deep waters of the Gulf can be reached on the continental shelf, rewriting the geological models of the Gulf floor in the process."

Richard Tullis, Capital One Southcoast (2/1/13) "We continue to view Energy XXI as a favorite Gulf of Mexico name with a 27% upside and the potential for our valuation to move higher on continued horizontal and exploration drilling success. . .going forward, look for results for the Pendragon high-impact exploration well at Vermilion 178 by April. . .also, look for results from the deeper target at the Lineham Creek ultra-deep exploration well by March."

Joseph Bachmann, Howard Weil (2/1/13) "Energy XXI expects to reach total depth on Pendragon in ~45 days. . .we believe this first well on the south side of a salt dome at Vermilion 178 could serve to be a significant catalyst for the stock as we estimate that its gross resource potential could be in the strong double-digits (MMBoe). . .there are plans for a second well, Merlin, to be drilled subsequently. . .Merlin is likely an even bigger prospect, possibly triple-digits."

Stephen Berman, Canaccord Genuity (2/1/13) "We like Energy XXI for its oil-weighted asset base, the emerging horizontal drilling program, a history of generating free cash, and upside from its ultra-deep program. Given the FQ2/13 miss and lowered guidance, we are not surprised the stock sold off yesterday, but see that as an opportunity to establish positions at lower levels. . .horizontal drilling could be a game changer for Energy XXI; the first three wells at West Delta 73 have exceeded expectations, and the company has raised its horizontal inventory in the field from 26 to 40 wells."

Patrick Rigamer, Iberia Capital Partners (2/1/13) "Energy XXI has reset guidance to reflect a more conservative growth profile as it brings its legacy infrastructure up to full operational capacity. . .after getting off to a stellar start earlier in the fiscal year, the company's horizontal development program hit a couple of speed bumps in the recent quarter, contributing to the production miss; but the future of this program remains bright, with reserve bookings projected to be 3x those of vertical wells for 20% incremental cost. . .drilling continues at the company's high-potential Pendragon prospect, with results expected within two months. . .with significant potential catalysts on the horizon, we maintain our Outperform rating."

Mark Lear, Credit Suisse (1/31/13) "Energy XXI's tough operational quarter offers a solid entry for this catalyst-rich Gulf of Mexico shelf operator. . .the company expects to exit FY13 with ~40 Mbbl/day, which we estimate will result in more than 25% year-over-year production growth in FY14. . .despite a tough quarter operationally for Energy XXI, we expect that near-term exploration catalysts at Vermillion 179, Lineham Creek and Highlander, as well as continued conventional horizontal success would drive material NAV upside, and as a result, we reiterate our Outperform rating."

Patrick Rigamer, Iberia Capital Partners (1/30/13) "The biggest catalyst on the horizon for Energy XXI is the initial prospect at the Vermilion 179 joint venture, where success could add significantly to the company's proved reserves. . .Q2/13 operating costs for the company should decline on a per unit basis as operations returned to normal following Hurricane Isaac. . .our projected Q2/13 liquids contribution of 71.5% is above consensus estimate of 70%. . .the company continues to benefit from Gulf Coast liquids pricing, with 92% of liquids production coming from crude oil and 8% from natural gas liquids."

Duane Grubert, Susquehanna Financial Group (1/28/13) "We think Energy XXI could combine harvest asset acquisitions (maybe from Sandridge Energy Inc.) and foreign expansion (maybe South America or Southeast Asia) in 2013, building on its incumbent free cash flow, balance sheet strengths, partnering with Exxon Mobil Corp., and shifting character of its exploration partnering with McMoRan Exploration Co. We see both domestic and international deal flow possible in 2013."

Duane Grubert, Susquehanna Financial Group (1/9/13) "To benefit, stay exposed to Gulf Coast oil producer Energy XXI, which also has positive support from its ultra-deep exploration campaign, partnered with McMoRan Exploration. That partnering is improving as McMoRan is being acquired by strong balance sheet Freeport-McMoRan Copper & Gold, and onshore success in the Chevron Corp.-operated Lineham Creek well bodes well for partner Energy XXI."

Bret Jensen, Seeking Alpha (12/17/12) "Energy XXI's valuation seems intriguing at these levels, as revenues and earnings are predicted to grow significantly in 2013. . .revenue growth is expected to accelerate from just over 10% this fiscal year to over 30% in FY/13, according to consensus estimates. Earnings are also expected to go from just over $3/share this year to a consensus of $4.50/share next year. . .the company has done a terrific job in growing operating cash flow (OCF), as it has increased OCF by approximately 600% since FY/09."

Joseph Bachmann, Howard Weil (12/11/12) "Energy EXXI Ltd. currently presents investors with an opportunity to position themselves in a name that: 1) trades ~12% below its proved reserve value, net of debt; 2) produces a crude oil cut over 60% that enjoys the uplift of LLS-benchmark pricing; 3) is poised to grow volumes over 20% in FY/13 (assuming no contribution from the ultra-deep shelf); 4) is free cash flow positive in FY/13 (assuming $90 WTI and a modest $8 premium for LLS) and pays a dividend; 5) has a very healthy upside of near-term exploration and development projects—in addition to the ultra-deep shelf that it continues to further augment."

Stephen Berman, Canaccord Genuity (12/5/12) "We like Energy XXI for its oil-weighted asset base, consistent cash generation and potential upside from its ultra-deep program. . .the horizontal drilling opportunity for the company on the Gulf of Mexico Shelf is significant. We expect to see a broader list of oily horizontal opportunities in the near future as the company further analyzes its deep prospect inventory. . .we reiterate our Buy rating and $42 price target."

Duane Grubert, Susquehanna Financial Group (11/29/12) "Energy XXI rationally has the highest average value per barrel of proved reserves versus our coverage universe (three-year adjusted [for fiscal-year pricing] SEC standardized measure of $22/boe versus a group average near $11), reflecting well-known Gulf of Mexico oil reserves value characteristics, including short reserves life and high price realizations. Upside gas reserves associated with the McMoRan Exploration Co. drilling program also have differentiated high margins related to very high likely production rates, plausibly becoming the lowest-cost gas production in the country."

Michael Schmitz, Ladenburg Thalmann (11/21/12) "We are initiating coverage of Energy XXI with a Buy rating. . .we currently project that the company will generate ~$190M and ~$300M of cash flow in excess of its capital budgets in fiscal 2013 and 2014, respectively, with excess cash flow likely to be allocated for increased activity (also dependent on drilling success/commodity prices), debt reduction and/or potential acquisitions."

Mark Lear, Credit Suisse (11/19/12) "We maintain our Outperform rating for Energy XXI and our $46 target price. . .the company is kicking off high-impact exploration and recently spud its initial XOMJV well at Vermilion with its Pendragon well, testing of one of seven prospects with an estimated P50 resource potential of 375 MMBoe."

Patrick Rigamer, Iberia Capital Partners (11/9/12) "Energy XXI's Davy Jones flow test appears to be imminent. . .incremental results from the company's horizontal well program support our belief that this program will add meaningful reserves to the company, and the initial well in the recently announced joint venture is set to spud within days."

Stephen Berman, Canaccord Genuity (11/8/12) "Energy XXI continues to generate cash on a consistent basis: We are modeling ~$65M of free cash flow for FY/13. Given the company's acquisition history and strong cash flow profile, we would not be surprised to see Energy XXI do another large deal. . .we would not be surprised if the company makes another large, accretive oily Gulf of Mexico Shelf purchase in the foreseeable future, which in our view could be a positive catalyst for the stock."

Richard Tullis, Capital One Southcoast (11/8/12) "We look for the strong free cash flow generation to continue for Energy XXI, with $115M estimated for FY/13 based on $730M in capex. We like the 30% upside to our $43 target price coupled with the upcoming well catalysts including Davy Jones (flow test expected to commence next week with results likely by the end of November), Blackbeard West #2 and the Pendragon joint-venture well at Vermilion 164 (results for both wells expected by March) and additional Gulf of Mexico horizontal well results."

Joseph Magner, Macquarie Capital Markets (11/8/12) "Energy XXI is one of only a handful of companies in our coverage group that we think could easily generate free cash flow this fiscal year. The company's heavy oil weighting and significant free cash flow are two of the main drivers underpinning EXXI being one of our top picks in the small- and mid-cap explorer and producer space; we maintain our Outperform rating and $46 target."

Stephen Berman, Canaccord Genuity (11/7/12) "We like Energy XXI for its oil-weighted asset base, consistent cash generation and potential upside from its ultra-deep program, which is getting closer to becoming a contributor to reserves and production. . .the Cake well at Grand Isle 16/18 came on at 800 boe/d; once larger sand is added in well it should be at 2,500 boe/d within the next two weeks. We believe horizontal drilling can transform the Gulf of Mexico Shelf similar to the successes it brought to the onshore U.S."

The Energy Report Interview with Andrew Coleman (10/23/12) "My top three picks would [include] Energy XXI. . .[it's one] of the best-levered names in the group in terms of liquidity and [its] ability to take on debt, should revenues fall because of quickly softening oil prices. . .Energy XXI is one of the highest oil-weighted players on the shelf in the Gulf of Mexico. This company has been a strategic acquirer of assets. It purchased about a billion dollars of assets from Exxon about a year and a half ago, which really expanded its footprint. At the time of that deal, it operated one of the top-thirteen biggest fields ever discovered on the shelf. After the Exxon deal, it operates six [of the twelve largest oil fields in the Gulf of Mexico] and has a working interest on the seventh. So it's the third-biggest player in the Gulf of Mexico shelf and is 70% oil." More >

Duane Grubert, Susquehanna Financial Group (10/4/12) "Energy XXI rationally has the highest average value per barrel of proved reserves versus our coverage universe. . .reflecting well-known Gulf of Mexico oil reserves value characteristics, including short reserves life and high price realizations. Upside gas reserves associated with the McMoRan Exploration Co. drilling program also have differentiated high margins related to very high likely production rates, plausibly becoming the lowest-cost gas production in the country."

Stephen Berman, Pritchard Capital Partners (10/4/12) "We are initiating coverage of Energy XXI with a Buy rating and $44 price target. We like EXXI for its oil-weighted asset base, consistent cash generation, and potential upside from its ultra-deep program, which is getting closer to becoming a contributor to reserves and production. . .the company continues to exploit its deep inventory of oil-weighted core shelf prospects acquired from Exxon Mobil Corporation in December 2010, with most results to date exceeding expectations; Energy EXXI has a deep portfolio of prospects capable of driving production for years to come."

Joseph Magner, Macquarie Capital Markets (10/2/12) "Energy XXI is one of only a handful of companies in our coverage group that we think could easily generate free cash flow this fiscal year. The company's heavy oil weighting and significant free cash flow are two of the main drivers underpinning EXXI being one of our top picks in the small and mid-cap E&P space. We maintain our Outperform rating and $42 target."

Duane Grubert, Susquehanna Financial Group (9/27/12) "Recent deal flow, well results, and sector share price weakness highlight a variety of styles of deleverage. . .some via reserves growth (as at Energy XXI). . .the company plans free cash flow, sort of forced into it by scarcity of offshore rigs and available platform slots, as well as rightsizing spending to match its staff's capacity to execute."

Patrick Rigamer, Iberia Capital Partners (9/20/12) "We are assuming coverage of Energy XXI with an Outperform rating and $45 target price. . .the company operates five of the 11 largest oil fields on the Gulf of Mexico shelf. . .increased recoveries present material upside to currently booked reserves and production. . .Energy XXI is participating as a non-operator in the high-potential, high-risk, ultra-deep natural gas play."

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