The transaction doubled the company’s interests in the same group of properties Energy XXI purchased from Pogo Producing Company in June 2007. The properties include 22 core fields currently producing approximately 8,000 net barrels of oil equivalent (BOE) per day, about 77% of which is oil.
Upon restoration of volumes pending repair of third party pipelines damaged by hurricanes in 2008, net production from the acquired interests is expected to reach 10,000 BOE per day, taking total company production to an expected 30,000 BOE per day.
John Schiller, chairman and CEO of Energy XXI, said: ”This acquisition is a watershed event for Energy XXI, doubling our interests in the most oil-weighted and highest-margin properties in our portfolio. Beyond the obvious synergies gained by consolidating interests in properties we already operate, this transaction — which closed one month after announcement — puts the company back on solid financial footing.
“Our strong balance sheet and greatly enhanced cash flows from the expanded asset base increase our ability to continue growing through our acquire-and-exploit strategy.”
The transaction was funded through common and preferred equity offerings that closed last week, raising $268.7m after deducting underwriting discounts and commissions. Actual funding requirements at closing totaled $259m.
