Investor Presentation
Investor Presentation
Investor Presentation
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<strong>Investor</strong> <strong>Presentation</strong><br />
December 2013<br />
Acquire, Exploit, Explore, Deliver<br />
12/9/13<br />
NASDAQ: EXXI AIM: EXXI www.energyxxi.com
Disclaimer<br />
This presentation contains statements about future events and expectations that can be<br />
characterized as forward-looking statements, including, in particular, statements about the<br />
Company’s plans, strategies and prospects. The use of the words “anticipate,” “estimate,”<br />
“expect,” “may,” “project,” “believe” and similar expressions are intended to identify forwardlooking<br />
statements. Although the Company believes that the plans, intentions and expectations<br />
reflected in or suggested by such forward-looking statements are reasonable, they do involve<br />
certain assumptions, risks and uncertainties, and the Company cannot assure you that those<br />
expectations will prove to have been correct. Actual results could differ materially from those<br />
anticipated in these forward-looking statements as a result of the factors described in this<br />
presentation. Many of these factors are beyond the Company’s ability to control or predict. The<br />
Company cannot assure you that its future results will meet its expectations and investors are<br />
cautioned not to place undue reliance on any forward-looking statement made by the Company<br />
or its authorized representatives. All subsequent written and oral forward-looking statements<br />
attributable to the Company and persons acting on its behalf are qualified in their entirety by<br />
the cautionary statements contained in this paragraph and elsewhere in this presentation.<br />
The Company does not have any obligation or undertaking to disseminate any updates or<br />
revisions to any forward-looking statement contained in this presentation or the admission<br />
document to reflect any change in the Company’s expectations about the statement or any<br />
change in events, conditions or circumstances on which the statement is based.<br />
2
Company Snapshot<br />
Acquire. Exploit. Explore. Deliver.<br />
Financial<br />
Ticker<br />
EXXI<br />
Market Cap (12/6/13) $2.2B<br />
Insider Ownership ~6.25%<br />
FY2014 Capital Budget ~$675MM<br />
Fully Diluted Shares 80.9MM<br />
Position<br />
• GoM Shelf and S. Louisiana Oil Focus<br />
• Acreage (net) 412,330*<br />
• 3D Seismic Data (sq. miles) 7,460<br />
• 46.6 MBOE/d<br />
Production**<br />
• One of the Largest Oil<br />
Producers on GoM Shelf<br />
• ~64% of Sales Volume is Oil<br />
and NGLs<br />
Reserves***<br />
• 179 MMBOE Proved Reserves<br />
• PV10: $6.1 Billion<br />
• 232 MMBOE 2P Reserves<br />
• PV10: $8.4 Billion<br />
• 75% of Proved Reserves are Oil<br />
• 94% of Proved Reserves<br />
and Production are Operated<br />
• 61% of Proved Reserves are<br />
Proved Developed<br />
* As of 6/30/13<br />
** For quarter ending September 30, 2013<br />
*** Reserves as of 6/30/13<br />
3
Growth Strategy<br />
ACQUIRE<br />
Proven growth<br />
through acquisitions<br />
EXPLOIT<br />
EXPLORE<br />
DELIVER<br />
Increasing recovery<br />
with horizontal drilling<br />
Impactful organic<br />
growth with<br />
the right partners<br />
Year-over-year growth<br />
in shareholder value<br />
4
Reserves Grow ~50% – 2P PV10 $8.4 BN<br />
$6.1 Billion 1 PV-10 $10.9 Billion 1 PV-10<br />
179 MMBOE Proved Reserves 310 MMBOE 3P Reserves<br />
Proved<br />
Undeveloped<br />
69.0 MMBOE<br />
Proved Developed<br />
Producing<br />
91.0 MMBOE<br />
Possible<br />
78.1 MMBOE<br />
PV10<br />
$2.6 Billion<br />
Probable<br />
53.6 MMBOE<br />
PV10<br />
$2.2 Billion<br />
Proved<br />
178.5 MMBOE<br />
PV10<br />
$6.1 Billion<br />
Proved Developed<br />
Non-Producing<br />
18.5 MMBOE<br />
Reserve Addition Highlights<br />
1<br />
FY13 Prices: $108.24/BO &<br />
$3.63/MCF ($91.60/BO &<br />
$3.44/MMBTU base before<br />
differentials & BTU)<br />
West Delta Horizontal Program<br />
South Timbalier H3B Sand<br />
Acquisitions<br />
West Delta 30 Field Study<br />
Main Pass Performance Revisions<br />
29 MMBOE<br />
15 MMBOE<br />
13 MMBOE<br />
10 MMBOE<br />
7 MMBOE<br />
5
Image<br />
goes<br />
here<br />
ACQUIRE<br />
6
Rapid Growth Since 2005<br />
Acquisition price per BOE* (2006-2012)<br />
Weighted average price per BOE*<br />
Energy XXI Acquisition<br />
XOM<br />
Mitsui<br />
Pogo<br />
Castex<br />
$12.36<br />
$20.47<br />
$20.77<br />
$24.13<br />
Peers 1P $21.88<br />
EXXI 1P $18.27<br />
Weighted average percent oil*<br />
$15.63<br />
EXXI % Oil 60%<br />
EXXI pays less per<br />
BOE and receives<br />
more crude than<br />
peers for GoM Shelf<br />
properties<br />
Marlin<br />
$16.71<br />
Peers % Oil<br />
40%<br />
June 2005<br />
Company formation<br />
April 2006<br />
Acquired Marlin Energy<br />
Offshore, LLC for<br />
$448MM<br />
April 2007<br />
Acquired POGO’s GoM<br />
assets for $415MM<br />
November 2009<br />
Acquired Mit Energy<br />
assets for $276MM<br />
December 2010<br />
Acquired ExxonMobil<br />
GoM Shelf properties<br />
for $1.01BN<br />
January 2013<br />
Acquired Bayou Carlin<br />
Onshore S. Louisiana<br />
for $80MM<br />
March 2013<br />
Signed GoM joint<br />
venture with Apache<br />
October 2005<br />
Successfully competed<br />
$300MM IPO on the<br />
London AIM<br />
June 2006<br />
Acquired South<br />
Louisiana properties<br />
for $311MM<br />
August 2007<br />
NASDAQ listing<br />
(ticker: EXXI)<br />
January 2010<br />
Announced major<br />
discovery at Davy Jones<br />
Ultra-Deep well in the<br />
GoM Shelf<br />
September 2012<br />
Secured GoM<br />
Exploration Joint<br />
Venture with<br />
ExxonMobil<br />
*Source: JS Herold. Excludes transactions less than $100MM and diversified acquisitions including significant onshore assets<br />
7
Operates Five of the Largest GoM Oil Fields<br />
#3 Apache*<br />
Eugene Island 330<br />
436 MMBO<br />
#14 Chevron<br />
South Timbalier 135<br />
167 MMBO<br />
#13 Energy Resources<br />
South Marsh Island 130<br />
186 MMBO<br />
#11 EPL<br />
Ship Shoal 208<br />
220 MMBO<br />
#10 EnergyXXI<br />
South Timbalier 21<br />
256 MMBO<br />
#1 Chevron<br />
Bay Marchand 2<br />
802 MMBO<br />
#4 Chevron<br />
Grand Isle 43<br />
372 MMBO<br />
#5 EnergyXXI<br />
Grand Isle 16<br />
303 MMBO<br />
#8 EnergyXXI<br />
West Delta 73<br />
268 MMBO<br />
#2 EnergyXXI<br />
West Delta 30<br />
580 MMBO<br />
Field<br />
Operator<br />
1 Bay Marchand 2 Chevron<br />
2 West Delta 30 Energy XXI<br />
3 Eugene Island 330 Apache*<br />
4 Grand Isle 43 Chevron<br />
5 Grand Isle 16 Energy XXI<br />
6 East Bay EPL<br />
7 South Pass 61 Sandridge<br />
8 West Delta 73 Energy XXI<br />
9 Main Pass 41 Chevron<br />
10 South Timbalier 21 Energy XXI<br />
11 Ship Shoal 208 EPL<br />
12 South Pass 89 Energy XXI<br />
13 South Marsh Island 130 Energy<br />
Resources<br />
14 South Timbalier 135 Chevron<br />
15 West Delta 79 Sandridge<br />
#12 EnergyXXI<br />
South Pass 89<br />
193 MMBO<br />
#15 Sandridge<br />
West Delta 79<br />
164 MMBO<br />
#6 EPL<br />
East Bay<br />
318 MMBO<br />
#9 Chevron<br />
Main Pass 41<br />
263 MMBO<br />
*Energy XXI Owns a 35% WI<br />
#7 Sandridge<br />
South Pass 61<br />
268 MMBO<br />
8
History of Making Big Oil Fields Bigger<br />
146 MMBOE<br />
Acquired<br />
Marlin<br />
25 MMBOE<br />
Other<br />
26 MMBOE<br />
ExxonMobil<br />
53 MMBOE<br />
Pogo<br />
20 MMBOE<br />
MIT<br />
21 MMBOE<br />
115 MMBOE<br />
Added<br />
Organically<br />
Asset Sale<br />
7 MMBOE<br />
261 MMBOE<br />
To-Date<br />
Proved Developed<br />
Producing<br />
91 MMBOE<br />
Production Since<br />
Inception<br />
75 MMBOE Proved Undeveloped<br />
69 MMBOE<br />
Proved Developed<br />
Non-Producing<br />
18 MMBOE<br />
~80% Uplift on Proved Reserves Purchased<br />
9<br />
9
Image<br />
goes<br />
here<br />
Enhanced Recovery<br />
EXPLOIT<br />
10
FY 2014 Drilling Inventory and Schedule<br />
West Delta 73<br />
Main Pass<br />
Vermilion<br />
West Delta 30<br />
• Big Sky 3† ✔<br />
• Hulk† ✔<br />
• Gunn† ✔<br />
• Scully†<br />
• Simon†<br />
• Hellboy†<br />
• Columbo†<br />
• Sabinal†<br />
• Mannix†<br />
• El Diente†<br />
• Java ✔<br />
• Monte Carlo 2 ✔<br />
• Don Lino ✔<br />
• Don Carlos<br />
• Panter^<br />
• Punch^<br />
• Merlin* =<br />
• Pendragon*<br />
• Stricker<br />
• Sea Dart†<br />
• Crusader†<br />
• Black Widow†<br />
• Banshee<br />
Field<br />
WD 73<br />
Nabors P-17<br />
WD 73<br />
Mod 150<br />
VR 178<br />
TBD<br />
WD 30<br />
Ocean King<br />
VR 179 / WD 30<br />
Ensco 99<br />
MP 61, 72<br />
Ensco 82<br />
FY14<br />
1st Quarter<br />
FY14<br />
2nd Quarter<br />
FY14<br />
3rd Quarter<br />
6 Horizontal Wells, 1 Injector Well, 1 Platform<br />
1 Dev Well, 1 Horizontal<br />
FY14<br />
4th Quarter<br />
4 Horizontal Wells, 1 Injector Well<br />
2 Horizontal Wells, 1 Development, 1 Exploration Well<br />
6 Development Wells, 1 Injector Well<br />
1 Expl.<br />
FY15<br />
† Horizontal or high-angle well<br />
* High-potential exploration well<br />
^ Contingent FY14 well<br />
✔<br />
✘<br />
Well completed in FY2013<br />
Well drilled, but not completed<br />
Bolded names denote currently drilling wells<br />
11<br />
11
Making the Case for Horizontal Drilling<br />
Vertical Drilling<br />
Early Life<br />
Mid Life<br />
Late Life<br />
(40-50% recovery rates)<br />
Oil<br />
Water<br />
Typical Vertical: 200 psi drawdown leads to water coning and inefficient sweep<br />
Horizontal Drilling<br />
Early Life<br />
Mid Life<br />
Late Life<br />
(55-65% recovery rates)<br />
Oil<br />
Water<br />
Typical Horizontal: 3-5 psi drawdown leads to stable oil/water contact,<br />
enhanced recovery of original oil-in-place<br />
12
Drilling Horizontals in the GoM<br />
Big Sky III Wellbore<br />
• Exxon GoM horizontal program started in 1995;<br />
32 horizontal wells drilled in the 1990s<br />
Exited sand<br />
• Energy XXI’s initial horizontal well was drilled in 2012;<br />
to-date, 16 horizontal wells drilled by EXXI resulted<br />
in 14 successful horizontal completions<br />
8’<br />
Thick<br />
F-30 Sand<br />
TD<br />
11,600 ft<br />
F-30 OWC 7997<br />
10,000 ft<br />
10,500 ft<br />
11,000 ft<br />
11,500 ft<br />
13
WD 73 – Horizontal Growth<br />
West Delta 73 Historical Production<br />
6000<br />
< Crude<br />
< Gas<br />
Horizontals<br />
Net BOE/d<br />
4000<br />
Hurricane Isaac<br />
2000<br />
0<br />
Mar<br />
11<br />
Jun 11<br />
Sep<br />
11<br />
Dec<br />
11<br />
Mar<br />
12<br />
Jun 12<br />
Quarter Ending<br />
Sep<br />
12<br />
Dec<br />
12<br />
Mar<br />
13<br />
Jun 13<br />
Sep<br />
13<br />
Field Stats<br />
8 th Largest Oil Field on the GOM Shelf<br />
Acquisition-to-Date Results<br />
Program Stats<br />
FY14 Program<br />
Year of Discovery 1962<br />
Cumulative Production<br />
268 MMBO<br />
659 BCF<br />
WI 100%<br />
NRI 83.33%<br />
13 Wells Completed<br />
3 Recompletions<br />
CAPEX Spent: $128 MM<br />
7 Horizontal Wells Remaining to Spud<br />
CAPEX Remaining: $93MM<br />
(Does not include $86MM facilities and rig<br />
mobilization)<br />
14
95+ Potential Horizontal Locations<br />
South Timbalier<br />
15-24 wells<br />
Grand Isle<br />
6-8 wells<br />
South Pass<br />
7-9 wells<br />
West Delta<br />
40-45 wells<br />
Main Pass<br />
6-11 wells<br />
15
Image<br />
goes<br />
here<br />
Partnerships, salt domes & ultra-deep<br />
EXPLORE<br />
16
Exploring with the Right Partners<br />
Vermilion<br />
Lineham Creek<br />
Cameron Parish, LA<br />
Shallow-Water<br />
Ultra-Deep<br />
Main Pass<br />
17
Seismic Rejuvenation – Redefining Salt Models<br />
1976-2008 2010 Present Main Pass Field Model<br />
Redefined Salt Model Generating Growth and<br />
Future Development Opportunities<br />
18
Better Understanding of Salt Domes<br />
Ala.<br />
Louisiana<br />
Miss.<br />
Florida<br />
Narrow Azimuth 3D Coverage<br />
Texas<br />
Mexico<br />
Gulf of<br />
Mexico<br />
GoM – Intrusive Salt Bodies<br />
Wide Azimuth 3D Coverage<br />
• Increasing activity due to new WAZ seismic<br />
• New and ongoing improved acquisition<br />
techniques<br />
• Advanced seismic processing<br />
• Better definition of limits/boundaries<br />
19
WAZ Seismic Over Core Properties<br />
Bay Marchand<br />
Field<br />
Energy XXI<br />
Proposed WAZ<br />
Extension<br />
~165 sq. mi.<br />
Main Pass<br />
Area<br />
Apache JV<br />
~900 sq. mi.<br />
South Timbalier 21<br />
Field<br />
South Timbalier 54<br />
Field<br />
Global Geophysical<br />
335 sq. mi.<br />
WAZ<br />
SHOOT<br />
Proposed Extension<br />
Deeper Potential to<br />
Probe – Only 4% of<br />
Wells Drilled Deeper<br />
than 15,000’ TVD<br />
20
ExxonMobil JV – Targeting Salt Domes<br />
VR 164<br />
Joint Venture<br />
Exploration Outline<br />
Vermilion<br />
11 Vermilion Blocks<br />
Located in 105 Feet of Water<br />
Overview<br />
Energy XXI Operated JV with ExxonMobil<br />
2-well carry to earn 50% working interest<br />
Merlin prospect currently drilling<br />
7 prospect areas on 54,500 acres<br />
Interest: 50% WI<br />
40.62% NRI<br />
21
Apache JV – Targeting Salt Domes<br />
• Heron logs first discovery with<br />
100 feet of net oil pay<br />
• Targets salt domes across<br />
135 blocks on GoM Shelf<br />
• Includes 25% WI in 25 non-producing<br />
primary term leases<br />
• No promote, no drill commitment<br />
• Wide Azimuth seismic program underway<br />
to define potential<br />
New Orleans<br />
Heron<br />
Well<br />
APA<br />
JV Area<br />
Joint Venture Leases<br />
Energy XXI Leases<br />
22
De-Risking the Ultra-Deep<br />
Lomond North<br />
(In progress)<br />
Lineham Creek<br />
(In progress)<br />
England North<br />
Davy Jones Offset<br />
(Awaiting completion)<br />
Davy Jones #1<br />
(Pending)<br />
England<br />
Hook<br />
Blackbeard West<br />
(Dev. plan underway)<br />
Bonnet<br />
Discovery<br />
Prospect<br />
Drake<br />
Barbosa<br />
Morgan<br />
Blackbeard West #2<br />
(Awaiting completion)<br />
Blackbeard East<br />
(Dev. plan filed)<br />
Barataria<br />
Calico Jack<br />
Captain Blood<br />
Gross Unrisked Potential<br />
Could Approach 150 Tcfe<br />
23
Ultra-Deep – Productive Geologic Intervals<br />
STRATEGIC<br />
AREA #2<br />
STRATEGIC<br />
AREA #3<br />
Blackbeard West #2<br />
Net Pay: 205 ft<br />
STRATEGIC<br />
AREA #1<br />
Blackbeard East #1<br />
Net Pay: 478 ft<br />
Base Salt Weld<br />
Initial Completions Target<br />
Separate Discovery Zones<br />
Blackbeard West #1<br />
Net Pay: 220 ft<br />
Potential<br />
completion<br />
Upper Miocene<br />
Lafitte #1<br />
Net Pay: 576 ft<br />
Middle Miocene<br />
BBW #2<br />
Base Salt Weld<br />
KICK<br />
31,000 ft<br />
24,500 ft<br />
Potential<br />
completion<br />
29,000 ft<br />
Cris R Gas Sand<br />
Faulted Out<br />
Davy Jones<br />
Offset<br />
Net Pay: 312 ft<br />
Lower Miocene<br />
Davy Jones #1<br />
Net Pay: 200 ft<br />
Base Salt Weld<br />
Lomond<br />
North<br />
BBW<br />
BBE<br />
Lafitte<br />
Oligocene<br />
Frio Gas Sands<br />
31,000 ft<br />
TD 32,997 ft<br />
Frio<br />
31,000 ft<br />
Lineham<br />
Creek<br />
Eocene<br />
Wilcox<br />
Sparta<br />
TD 34,184 ft<br />
Sparta<br />
TD 33,883 ft<br />
26,000 ft<br />
Perf’d<br />
Sparta/Yegua<br />
23,000 ft Lomond<br />
Drilling<br />
DJ<br />
North<br />
Upper Cretaceous<br />
Tuscaloosa<br />
Lower Cretaceous<br />
PTD = 30,500 ft<br />
DJ<br />
Offset<br />
Lineham<br />
Creek<br />
TD 30,517 ft TVD<br />
24
Image<br />
goes<br />
here<br />
DELIVER<br />
25
Value Driven by Oil Reserves Adds in FY13<br />
$4.3 Billion 1 PV-10 $6.1 Billion 2 PV-10<br />
120 MMBOE Proved Reserves 179 MMBOE Proved Reserves<br />
FY 2012 FY 2013<br />
Proved<br />
Undeveloped<br />
38 MMBOE<br />
Proved<br />
Developed<br />
Producing<br />
63 MMBOE<br />
Proved<br />
Make this pie bigger<br />
Undeveloped<br />
Proved<br />
69 MMBOE<br />
Developed<br />
Producing<br />
91 MMBOE<br />
Proved<br />
Developed<br />
Non-Producing<br />
19 MMBOE<br />
Proved Developed<br />
Non-Producing<br />
19 MMBOE<br />
59 MMBOE Y/Y Growth in Proved Reserves<br />
~50% of Reserves Growth is PDP<br />
1<br />
FY12 Prices: $113.36/BO & $3.30/MCF ($95.67/BO & $3.15/MMBTU base before differentials and BTU)<br />
2<br />
FY13 Prices: $108.24/BO & $3.63/MCF ($91.60/BO & $3.44/MMBTU base before differentials and BTU)<br />
26
Development Focused Capital Program<br />
FY14 Capital Budget $675 MM<br />
Seismic $35<br />
P&A $31<br />
G&A, Land $54<br />
Facilities $82<br />
Ultra Deep $46<br />
Core Exploration $80<br />
Development $330<br />
• ~80% of capital program<br />
is directed towards<br />
development<br />
• 76% of uplift capital is<br />
oil-directed<br />
• Facilities budget includes<br />
new platform in West<br />
Delta<br />
• Protection through hedges<br />
27
Current Activity – 3 Operated Rigs<br />
Cameron Parish, LA<br />
9% WI<br />
Lineham Creek<br />
Unit 201 Dev. Pending<br />
Highlander Area<br />
18% WI<br />
Lomond North<br />
Coastal 22 Drilling<br />
New Orleans<br />
West Delta 30<br />
Stricker<br />
Ocean King<br />
Main Pass 61<br />
Don Carlos<br />
Ensco 82<br />
100% WI<br />
Drilling<br />
100% WI<br />
Drilling<br />
Vermilion 179<br />
Merlin<br />
Ensco 99<br />
50% WI<br />
Drilling<br />
West Delta 73<br />
D-40<br />
Nabors P-17<br />
100% WI<br />
Drilling<br />
Main Pass 295<br />
Heron<br />
Ensco 87<br />
25% WI<br />
Dev. Pending<br />
Maroon boxes indicate operated rigs<br />
28
EXXI Trades at Discount to NAV<br />
Category 1 PV-10 $/Share 2<br />
$83.51<br />
Proved Developed Reserves $3,554 $43.92<br />
Proved Undeveloped Reserves $2,596 $32.08<br />
53%<br />
Discount<br />
$55.86<br />
Net Debt 3 ($1,630) ($20.14)<br />
Total Net Proved Value $4,520 $55.86<br />
$26.17<br />
Probable Reserves $2,238 $27.66<br />
Total Net Proved + Probable Value $6,758 $83.51<br />
Stock Price at<br />
11/15/13<br />
Total 1P<br />
Total 2P<br />
Stock Price at 12/6/13 $26.17<br />
EXXI Trades at a ~53% Discount to Proved-only NAV<br />
and a 69% Discount to 2P NAV<br />
1<br />
Using 6/30/2013; Prices: $108.24/BO & $3.63/MCF ($91.60/BO & $3.44/MMBTU base before differentials & BTU)<br />
2<br />
80.9 MM shares fully diluted, which includes the effect of repurchase of 3.3MM shares between 10/31/13 and 11/19/13<br />
3<br />
As of 9/30/13, pro forma of $400MM 3% convertible bond deal issued on 11/19/13 less net cash proceeds, and $92.0MM incurred to repurchase<br />
3.3MM common shares between 10/31/13 and 11/19/13<br />
29
Momentum is Building<br />
• Horizontal oil<br />
development impacts<br />
reserves & base<br />
production<br />
• Exploring with worldclass<br />
partners exposes<br />
EXXI to game-changing<br />
upside<br />
• Proved-only reserves<br />
(PV10 $6.1 Billion) imply<br />
EXXI is undervalued<br />
30
Contact<br />
Stewart Lawrence, IRO<br />
Energy XXI<br />
1021 Main Street, Suite 2626<br />
Houston, Texas 77002<br />
713.351.3006<br />
slawrence@energyxxi.com<br />
Greg Smith, Director of IR<br />
Energy XXI<br />
1021 Main Street, Suite 2626<br />
Houston, Texas 77002<br />
713.351.3149<br />
gsmith@energyxxi.com<br />
NASDAQ: EXXI AIM: EXXI www.energyxxi.com
Image<br />
goes<br />
here<br />
Additional information<br />
APPENDIX<br />
32
WD 73 – Successful Horizontal Results<br />
Bearclaw<br />
Big Sky 2<br />
GUNN<br />
HORIZONTAL<br />
HORIZONTAL<br />
Glacier<br />
Big Maroon Sky 3<br />
Hulk<br />
(H-35 Sand)<br />
Hyden<br />
(G-20 Sand)<br />
HORIZONTAL<br />
HORIZONTAL<br />
HORIZONTAL<br />
Weimer<br />
HORIZONTAL<br />
HORIZONTAL<br />
HRZ<br />
33
Main Pass – Finding New Miocene Reserves<br />
Carinos<br />
LP-<br />
1G<br />
MP 73 Onyx<br />
Pod A<br />
Pod B<br />
LP-<br />
2<br />
Monte Carlo-2<br />
J-6 Sand<br />
MP 73 C-1 2<br />
LP-<br />
1G<br />
LP-<br />
2<br />
MP 61 Don<br />
BA- Tomas<br />
4AA<br />
Java<br />
J-6 Sand<br />
Don Lino<br />
BA-<br />
4B/5<br />
Quintero<br />
J-6 Sand<br />
J-<br />
6<br />
34
Large Inventory of Leads & Prospects<br />
Main Pass Reserves Growth<br />
80<br />
77.0<br />
Pod A<br />
MP61 Field<br />
GROSS MMBOE<br />
60<br />
40<br />
106%<br />
increase<br />
37.4<br />
7.2<br />
27.1<br />
10.0<br />
Panter<br />
Punch<br />
Don Lino<br />
Don Carlos<br />
Vindicator<br />
Gulf O&G<br />
Pod B<br />
Julietta<br />
Cohiba<br />
20<br />
30.2<br />
39.9<br />
MP73 Field<br />
Oliva<br />
0<br />
Reserves @ 2007<br />
Acquisition<br />
Column2<br />
Probable<br />
Reserves @<br />
6/30/13<br />
Proved<br />
Production<br />
La Gloria<br />
St. Luis<br />
Gurkha<br />
Onyx Attic<br />
Indios<br />
Twin Sisters<br />
Aliados<br />
35
Operating Data per BOE<br />
Quarter Ended<br />
3/31/12 6/30/12 9/30/12 12/31/12 3/31/13 6/30/13 9/30/13<br />
Revenue ($MM) 336.0 341.9 270.2 320.5 303.8 314.3 324.6<br />
MBO/d 31.4 32.2 26.1 29.4 28.6 28.9 29.7<br />
MBOE/d 45.3 47.6 37.3 44.6 43.5 46.8 46.6<br />
NGL % (of oil volumes) 12.4% 7.7% 7.9% 5.7% 9.5% 8.8% 8.6%<br />
Total Realized $ / BOE 81.43 78.90 78.72 78.15 77.58 73.78 75.78<br />
Insurance Expense 1.73 1.57 2.62 2.15 1.91 1.75 1.98<br />
Workover/Maintenance 3.85 4.86 2.95 4.93 4.89 3.67 3.41<br />
Direct LOE 13.43 13.68 18.46 13.87 15.24 13.94 14.63<br />
Gathering & Transportation 0.60 1.01 2.33 1.49 1.13 1.33 1.25<br />
DD&A 21.44 24.61 24.70 25.81 22.66 22.73 23.40<br />
G&A 6.08 4.55 6.96 4.71 4.11 2.89 5.53<br />
Production Taxes/Other 3.58 1.76 4.20 2.38 2.14 1.25 2.38<br />
Hedging Impact 0.27 1.77 2.91 2.42 0.87 1.19 0.24<br />
EBITDA 52.16 51.45 40.77 48.47 47.50 48.56 46.19<br />
36
Solid Balance Sheet<br />
$10.00<br />
$8.00<br />
$9.31<br />
Net Debt/Total Proved<br />
$7.53 $7.68<br />
$8.62<br />
6/30/11 6/30/12 6/30/13<br />
Pro forma<br />
9/30/13<br />
Cash and cash equivalents (incl. cash at<br />
parent) 28,407 117,087 -- 387,062<br />
All figures in 000s except per unit values<br />
$6.00<br />
$4.00<br />
Short-term Debt 4,054 4,284 19,554 16,254<br />
$2.00<br />
$0.00<br />
$15.00<br />
$10.00<br />
$5.00<br />
$-<br />
$10.00<br />
$8.00<br />
$6.00<br />
$4.00<br />
$2.00<br />
$0.00<br />
6/30/11 6/30/12 6/30/13 PF 9/30/13*<br />
Net Debt/Proved Developed<br />
$13.30<br />
$14.05<br />
$12.51<br />
$11.03<br />
6/30/11 6/30/12 6/30/13 PF 9/30/13*<br />
Fixed Costs/BOE produced<br />
$9.04<br />
$7.31<br />
$6.66<br />
$6.06<br />
6/30/11 6/30/12 6/30/13 PF 9/30/13*<br />
Long-term debt (principal amounts):<br />
Revolving credit facility 107,784 0 339,000 0<br />
9.25% Senior Notes 750,000 750,000 750,000 750,000<br />
7.75% Senior Notes 250,000 250,000 250,000 250,000<br />
7.5% Senior Notes 0 0 0 500,000<br />
3.0% Convertible Senior Notes 0 0 0 400,000<br />
Other long-term debt 1,549 14,060 11,491 9,129<br />
Total Long-term Debt 1,109,333 1,014,060 1,350,491 1,909,129<br />
Net Debt 1,084,980 901,257 1,370,045 1,387,145<br />
Preferred Stock (face value)<br />
7.25% perpetual convertible preferred 800 800 800 800<br />
5.625% perpetual convertible preferred 262,500 203,529 203,297 203,290<br />
Total Preferred Stock 263,300 204,329 204,097 204,090<br />
Total Proved Reserves (MMBOE) 116.6 119.6 179 179<br />
Net Debt/Total Proved $9.31 $7.53 $7.68 $8.62<br />
Net Debt/Total Capitalization (Book) 53.4% 39.1% 48.6% 51.7%<br />
Fixed Costs/BOE produced $7.31 $6.06 $6.66 $9.04<br />
Latest Q Production (MBOE/D) 42.1 47.6 48.8 46.6<br />
* Pro forma 9/30/13 numbers are shown after the effect of the issue of $400MM of 3%<br />
Convertible Senior Notes in November 2013 ($390.7MM net proceeds).<br />
37
Current Hedge Position*<br />
Period Fiscal Quarter Instrument Type Daily Volumes Average Price Index<br />
CRUDE OIL<br />
10/2013-12/2013 Q2 2014 Put Spread 5,000 bbl/day $87.00 sub-floor; $106.00 floor BRENT<br />
10/2013-12/2013 Q2 2014 Collars 3,500 bbl/day $73.57 floor, $105.63 cap WTI<br />
1/2014-6/2014 Q3-Q4 2014 Collars 2,000 bbl/day $90.00 floor, $108.38 cap BRENT<br />
10/2013-6/2014 Q2-Q4 2014 Three-Way Collars 8,000 bbl/day $74.02 sub-floor, $94.02 floor, $129.21 cap BRENT<br />
10/2013-6/2014 Q2-Q4 2014 Three-Way Collars 8,300 bbl/day $70.00 sub-floor, $90.00 floor, $136.86 cap WTI<br />
7/2014-6/2015 Q1-Q4 2015 Three-Way Collars 8,200 bbl/day $69.54 sub-floor, $89.54 floor,$122.31 cap BRENT<br />
7/2014-12/2014 Q1-Q2 2015 Three-Way Collars 10,000 bbl/day $70.00 sub-floor, $90.00 floor,$137.14 cap WTI<br />
7/2014-12/2014 Q1-Q2 2015 Collars 2,000 bbl/day $90.00 floor, $108.38 cap BRENT<br />
7/2015-12/2015 Q1-Q2 2016 Three-Way Collars 10,000 bbl/day $71.00 sub-floor, $91.00 floor, $113.75 cap BRENT<br />
NATURAL GAS<br />
10/2013 Q2 2014 Put Spread 20,000 MMBtu/day $4.00 sub-floor, $4.90 floor NYMEX<br />
10/2013-6/2014 Q2-Q4 2014 Three-Way Collars 51,100 MMBtu/day $3.44 sub-floor, $4.14 floor, $4.81 cap NYMEX<br />
7/2014-12/2014 Q1-Q2 2015 Three-Way Collars 50,000 MMBtu/day $3.35 sub-floor, $4.00 floor, $4.61 cap NYMEX<br />
*Updated positions effective 10/1/2013-12/31/2015, updated 11/27/2013<br />
38
Current Crude Hedge Profile*<br />
30<br />
25<br />
20<br />
WTI Collars<br />
Mbo/d<br />
15<br />
10<br />
WTI 3-Ways<br />
Brent Put Spreads<br />
Brent Collars<br />
Brent 3-Ways<br />
5<br />
0<br />
13-Dec Cal 14 Cal 15<br />
Crude Oil<br />
Dec 2013 2014 Average 2015 Average<br />
Subfloor Floor Ceiling Subfloor Floor Ceiling Subfloor Floor Ceiling<br />
WTI Collars 73.57 105.63<br />
WTI 3WY Collars 70.00 90.00 136.32 70.00 90.00 137.14<br />
Brent Collars 90.00 108.38<br />
Brent Put Spreads 87.00 106.00<br />
Brent 3WY Collars 85.91 105.91 125.88 68.08 88.08 130.88 71.00 91.00 113.75<br />
*Updated 11/27/2013<br />
39
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