EXXI: Fiscal Q1 results

[dan_s]

Very bullish numbers from our newest Sweet 16 member.

Press Release Source: Energy XXI On Wednesday October 26, 2011, 4:38 pm

•EBITDA of $187 million eclipses previous quarter's record by 14%
•Free cash flow and hedge monetization further reduce debt
•South Pass 89 recompletion/workover program completed
•Fiscal-year volume range reaffirmed at 46,000-50,000 BOE/d [My full year forecast model assumes 48,300 boepd this year]

HOUSTON, Oct. 26, 2011 (GLOBE NEWSWIRE) -- Energy XXI (Nasdaq:EXXI.L - News) (LSE:EXXI.L - News) today announced fiscal first-quarter results and provided an operational update on activities in the Gulf of Mexico.

For the 2012 fiscal first quarter, Energy XXI reported adjusted earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) of $186.9 million, compared with $75.7 million in the 2011 fiscal first quarter. Net income attributable to common shareholders for the 2012 fiscal first quarter was $62.6 million, $0.76 per diluted share, on revenues of $284.9 million and production of 40,800 barrels of oil equivalent per day (BOE/d). < Above my forecast.

"Our oil-focused asset base delivered record quarterly EBITDA," Energy XXI Chairman and CEO John Schiller said. "Oil represented 69 percent of our production and 90 percent of our pre-hedge revenue in the quarter, generating strong free cash flow that allowed us to continue paying down debt. In addition, we collected nearly $50 million during the quarter by monetizing crude oil swaps. We re-hedged the same volumes using collars based on Brent crude prices, better correlating with the premium on our HLS crude. The combination of free cash flow and hedge monetizations drove our net debt-to-total-capitalization ratio down to 47 percent from 53 percent."

I will adjust my forecast model for Q1 actuals and get it up on the website by Friday. - Dan

[dan_s]

Q1 results crushed the First Call estimates. Cash flow per share way above my forecast, primarily because they monitized the hedges and reset them at Brent.

I will listen to the CC tomorrow before I put the final touches on my forecast model but it looks darn good. My Fair Value estimate should be going higher. CFPS for this fiscal year is now on-track to top $10.00 with a lot of it protected by hedging.

Oil represented 69 percent of our production and 90 percent of our pre-hedge revenue in the quarter.

Note that their realized price for natural gas was $5.36/mcf. Not bad! They have nice hedges in place and most of the gas is high btu.

[cviller]

Dan,
Does your over $10 CFPS assume any contribution from EXXI's interest in MMR's ultra deep exploration wells (Davy Jones, Blackbeards East and West, etc.)? Thanks.

[dan_s]

Yes, first production from Davy Jones is set for December. Nothing from the others in my forecast.