Energy XXI Gulf Coast announces fourth quarter and full year 2017 results

Highlights:

• Produced an average of approximately 27 600 boe/d (77% oil) during the fourth quarter, within the EGC’s guidance range.
• Benefited from strong oil price realisations during the fourth quarter of US$59.27 per barrel (before the impact of derivatives), approximately 7% higher than the WTI average price of US$55.40 per barrel for the quarter.
• Incurred a net loss of US$215.1 million which included a non-cash ceiling test impairment charge of US$145.1 million and a loss on financial derivatives of US$33.3 million.
• Reported cash and cash equivalents of US$152 million at 31 December 2017.
• Announced expected total 2018 capital expenditures to be in the range of US$145 - US$175 million, with US$65 - US$75 million planned for drilling new wells and recompletes, US$10 - US$15 million in planned facilities improvements and US$50 - US$60 million in anticipated plugging and abandonment expenditures.
• 2018 drilling program anticipates drilling six wells focused in EGC's core areas in West Delta and South Timbalier, which includes three development wells, one injection well, and two exploitation locations.
• Plans to spud the first development well of the 2018 drilling program, the West Delta 73 C-27 McCloud, in March.
• Finalised third party calculation of year-end 2017 proved reserves which totaled 88.2 million boe.
• Disclosed that the High Tide well at West Delta 30, as expected, has transitioned to oil and is currently producing approximately 700 boe and 3.3 million ft³/d.
• Announced the planned change of its Nasdaq ticker symbol for its common stock from "EXXI" to "EGC" effective 21 March 2018.

Douglas E. Brooks, EGC's Chief Executive Officer and President commented, "2017 was an extremely busy and transitional year for us. As previously announced, after concluding a process to explore potential consolidation transactions, we moved ahead with a stand-alone strategy that includes a 2018 capital budget that should better position EGC for success in 2018 and beyond. We have begun the immediate implementation of that plan with the pending drilling of our first well at West Delta 73."

Mr. Brooks continued, "We have entered 2018 focused on the future with a renewed energy and improved outlook shared by all of us across the company. We are encouraged by higher oil prices and the significant positive impact they should have on our cash flow and our ability to grow our business again. We anticipate that every dollar increase in oil prices would increase our cash flow by US$7 - US$9 million that can be deployed in our drilling program, which in 2018 is intended to arrest our production decline. We are excited to have two exploitation wells later in this year's plan that could have a meaningful impact on our reserves and production if successful.

“We have rebuilt our management team and remain committed to intense financial discipline throughout our organisation and will continue to evaluate our business and align our operational costs with forecasted needs in order to maximise our financial flexibility. We plan to further investigate ways that we can enhance our drilling program and options to fund such a program. We also plan to explore potential divestitures of non-core assets, to be receptive to a future Gulf of Mexico consolidation transaction that creates synergies, and to evaluate and pursue strategic acquisition opportunities in the US Gulf Coast region both offshore and onshore where we can readily deploy our conventional drilling and development expertise. We are optimistic about our future potential and our ability to enhance shareholder value."

Read the article online at: https://www.worldpipelines.com/business-news/19032018/energy-xxi-gulf-coast-announces-fourth-quarter-and-full-year-2017-results/