EPL Completes Sale of Non-Operated Assets
02 Aprile 2013 - 10:10PM
EPL Oil & Gas, Inc. (EPL or the Company) (NYSE:EPL) today
announced the closing of the transaction to sell certain
non-operated assets for $51.5 million in cash and the buyer's
assumption of liabilities currently recorded on EPL's balance sheet
of $10.8 million, resulting in total consideration of $62.3
million.
Highlights
- Sale of non-operated assets in Bay Marchand (BM) field for
total consideration of $62.3 million with EPL retaining its deep
rights: $156,000 per flowing barrel, $39/Boe 1P reserves
- Post close liquidity, in the form of cash plus undrawn revolver
availability, of approximately $290 million
Sale of Non-Operated BM Asset
EPL has closed on its previously announced sale of certain
shallow water Gulf of Mexico (GOM) shelf oil and natural gas
interests located within the non-operated BM field area to the
well-established property operator for $51.5 million in cash and
the buyer's assumption of liabilities currently recorded on EPL's
balance sheet of $10.8 million, resulting in total consideration of
$62.3 million, subject to customary adjustments to reflect the
January 1, 2013 economic effective date. Estimated proved reserves
as of the January 1, 2013 economic effective date totaled
approximately 1.6 million Boe, 90% of which are oil. The total
proved divestiture PV-10 value is estimated at $53 million using
the estimated proved reserves and strip pricing as of year-end 2012
(see discussion of PV-10 in appendix).
Post-close of the sale, EPL's liquidity, in the form of cash
plus undrawn revolver availability, is approximately $290
million.
Gary C. Hanna, EPL's President and CEO, stated, "From time to
time, we may decide to divest of certain assets that do not meet
our capital expenditure risk, rate of return, operational control
or other criteria in an effort to high-grade our overall portfolio
of assets. This non-strategic asset sale gives us an immediate
increase in liquidity and capital available for future investment
deployment towards an acquisition or projects with operational
control and higher returns. The sale also preserves our deep rights
within the BM area."
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:
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; stock
market conditions; the trading price of EPL's common stock; cash
demands caused by planned and unplanned capital expenditures;
changes in general economic conditions; uncertainties in reserve
and production estimates, particularly with respect to internal
estimates that are not prepared by independent reserve engineers;
unanticipated recovery or production problems; 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; drilling and operating
risks; our ability to replace oil and gas reserves; risks and
liabilities associated with properties acquired in acquisitions;
integration of acquired assets; 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/)
Appendix
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
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 reserves on a more comparable basis.
CONTACT: Investors/Media
T.J. Thom, Chief Financial Officer
504-799-1902
tthom@eplweb.com
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