EPL Epl Oil & Gas

Energy Partners, Ltd. (EPL or the Company) (NYSE:EPL) reported probable reserve estimates provided by its third party engineering firms totaling 12.2 million barrels of oil equivalent (Boe) as of year-end 2010.

Highlights

• Probable reserves of 12.2 Mmboe, representing a 33% increase year over year
• Oil weighted reserves, of which 28% are from the newly acquired shelf assets

As previously reported, EPL's proved reserves at year-end 2010 stood at 27.4 million Boe. As of December 31, 2010, the recently acquired GOM shelf properties had estimated proved reserves of approximately 8.1 million barrels of oil equivalent (Mmboe). Pro forma for the acquisition estimated proved reserves increased 30% percent to 35.5 Mmboe from 27.4 Mmboe as of December 31, 2010. Today, EPL reported estimated probable reserves associated with its proven reserve base at year-end 2010 of 12.2 million Boe, up 33% from year-end 2009. The estimated probable reserves are comprised of 65% oil and 3.4 million Boe are associated with its newly acquired shelf assets.

All of the Company's proved and probable reserve figures are based upon third party engineering estimates prepared by Netherland, Sewell & Associates, Inc. and Ryder Scott Company, L.P.

PRO FORMA RESERVES AND PV-10 VALUES

         

Pro Forma Reserve Category

Oil (Mmbo)

Gas (Bcf)

Mmboe

PV10 YE ($Mm)(1)

PV10 Strip ($Mm)(2)

Proved 24.0 69.2 35.5 632 1,007 Probables

7.9

25.8

12.2

254

352

Proved + Probables 31.9 95.0 47.7 886 1,359   (1) The present value of the future net cash flows before income taxes of the Company’s estimated proved oil and natural gas reserves at the end of 2010 using a discount rate of 10% (PV-10) as calculated in accordance with SEC guidelines and 2010 pricing of $77.85 per barrel of oil and $4.54 per Mcf of natural gas. (2) Using NYMEX forward prices as of February 23, 2011  

PV-10 Definition and Discussion

PV-10 may be considered a non-GAAP financial measure as defined by the SEC. We believe that the presentation of PV-10 is relevant and useful to our investors as supplemental disclosure to the standardized measure, or after-tax amount, because it presents the discounted future net cash flows attributable to our proved and probable reserves before taking into account future corporate income taxes and our current tax structure. Because the standardized measure is dependent on the unique tax situation of each company, our calculation may not be comparable to those of our competitors. Because of this, PV-10 can be used within the industry and by creditors and securities analysts to evaluate estimated net cash flows from proved and probable reserves on a more comparable basis.

Description of the Company

Founded in 1998, EPL is an independent oil and natural gas exploration and production company based in New Orleans, Louisiana, and Houston, Texas. The Company’s operations are concentrated in the U.S. Gulf of Mexico shelf, focusing on the state and federal waters offshore Louisiana. 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; changes in legislative and regulatory requirements concerning safety and the environment as they relate to operations; 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; drilling and operating risks; our ability to replace oil and gas reserves; risks and liabilities associated with the properties to be acquired in the acquisition; volatility in the financial and credit markets or in oil and natural gas prices; and other matters that are discussed in EPL’s filings with the Securities and Exchange Commission. (http://www.sec.gov/).