Energy Partners, Ltd. (EPL or the Company) (NYSE:EPL) today
reported it expects to exceed fourth quarter 2009 production
guidance and has increased its full year 2010 production guidance.
EPL also announced its borrowing base under its $125 million Senior
Secured Revolving Credit Facility has been reaffirmed.
Additionally, the Company will be meeting with investors in New
York and Boston next week as part of a non-deal roadshow organized
by Credit Suisse Securities.
Increased Fourth Quarter 2009
Production Estimate and 2010 Production Guidance
As previously announced, the Company had three rig operations
underway in the fourth quarter 2009 on the Gulf of Mexico shelf.
The operations on all three wells, which were completed just prior
to or after the end of 2009, were successful and the production
from the program significantly enhanced fourth quarter 2009
production averages and expectations for 2010 production averages.
As a result, the Company estimates its fourth quarter 2009
production was approximately 13,700 barrels of oil equivalent (boe)
per day, slightly above the production guidance given for the
fourth quarter 2009 of 12,500 to 13,500 boe per day. The Company
also estimated that first quarter 2010 production should average
between 14,000 and 16,000 boe per day. Additionally, the Company
increased its full year 2010 production guidance to 13,000 to
15,000 boe per day from the previous range of 12,500 to 13,500 boe
per day (see attached guidance table).
Gary C. Hanna, the Company’s CEO, stated, “Our near term focus
on realigning our cost structure, converting our core proved
non-producing oil assets to cash flow and internalizing plugging
and abandonment expertise is progressing as planned. I am very
encouraged with operational performance in the fourth quarter 2009,
and we are starting to see the positive effects of the program in
our production levels estimated for 2010. Combined with changes to
our cost structure, implemented as part of our 2009 restructuring,
our outlook for fourth quarter 2009 and 2010 cash flow remain quite
bright. We will be just as active this year, with drilling and
workover activities planned to commence in late February or early
March.”
Borrowing Base Reaffirmed and
Liquidity Increasing
In conjunction with its scheduled December 1, 2009 borrowing
base redetermination, its borrowing base was reaffirmed, including
the $45 million revolving credit portion of the facility. The
Company fully repaid the revolving portion of its Credit Facility
during the fourth quarter 2009. As of December 31, 2009, the
Company had cash on hand in excess of $26 million and net debt of
approximately $51 million.
Hanna continued, “Based on our increased production guidance for
2010, we now estimate our discretionary cash flow for this year
could be in the range of $135 million if commodity prices average
$70 per barrel for oil and $5.50 per million cubic feet for gas.
With our previously announced 2010 capital budget of $57 million,
we foresee a continued improvement to liquidity providing the
company with substantial flexibility towards maximizing shareholder
value.”
East Coast Non-Deal
Roadshow
Management will be meeting with investors in New York and Boston
next week as part of a non-deal roadshow organized by Credit Suisse
Securities. Presentation materials will be posted to the Company’s
website under "Latest Presentation" in the Investor Relations
section of the site on Tuesday, February 9, 2010.
First Quarter and Full Year
2010 Guidance
ESTIMATED PRODUCTION & SWAP HEDGE
VOLUMES
Net Production (per day):
4Q
2009
1Q
2010
Full year 2010
Oil, including NGLs (barrels)
~6,100
6,000-7,000
6,300-7,000
Natural gas (million cubic feet) ~45,700 48,000-54,000
40,000-48,000 Total (Boe) ~13,700 14,000-16,000 13,000-15,000
Percent Oil, including NGLs
45% 43% 48% Swap Contacted Volume Oil (barrels) 3,278 2,084
% of Oil swap contracted
47-55%
30-33% % of Boe swap contracted 20-23% 14-16% Average Swap Price
Level $ 68.29 $ 68.42
ESTIMATED EXPENSES (in Millions, unless
otherwise noted)
Lease Operating (including energy insurance) $ 13.0-14.0 $
52.0-56.0 General & Administrative (cash and non-cash) $
3.5-4.9
$ 14-16 Taxes, other than on earnings (% of revenue) 2%-4% 2%-4%
Exploration Expense $ 0.4-3.0 $ 2.0-4.0 DD&A ($/Boe) $
21.00-25.00 $ 21.00-25.00 Interest Expense Non-Cash (interest and
accretion of Discount on PIK Notes) $ 3.3-3.6 $ 14.0-15.0 Cash
0.3-0.5
0.8-1.0
Total $ 3.6-4.1 $ 14.8-16.0
Description: Founded in
1998, EPL is an independent oil and natural gas exploration and
production company based in New Orleans, LA and Houston. The
Company’s operations are concentrated in the shallow to moderate
depth waters in the Gulf of Mexico focusing on the areas offshore
Louisiana as well as the deepwater Gulf of Mexico in depths less
than 5,000 feet. For more information, please visit
www.eplweb.com.
Forward-Looking Statements
This press release may contain forward-looking information and
statements regarding EPL. Any statements included in this press
release that address activities, events or developments that EPL
expects, believes, plans, projects, estimates or anticipates will
or may occur in the future are forward-looking statements. We
believe these judgments are reasonable, but actual results may
differ materially due to a variety of important factors. Among
other items, such factors might include: changes in general
economic conditions; uncertainties in reserve and production
estimates; unanticipated recovery or production problems; hurricane
and other weather-related interference with business operations;
the effects of delays in completion of, or shut-ins of, gas
gathering systems, pipelines and processing facilities; oil and
natural gas prices and competition; the impact of derivative
positions; production expenses and expense estimates; cash flow and
cash flow estimates; future financial performance; planned and
unplanned capital expenditures; and other matters that are
discussed in EPL's filings with the Securities and Exchange
Commission. (http://www.sec.gov/).
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