Energy XXI: Update of Davy Jones from MMR

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At Davy Jones No. 1, McMoRan has made progress in operations required to test the well and is working expeditiously to conclude testing operations on the first shallow water, sub-salt ultra-deep well on the Gulf of Mexico Shelf. As previously reported McMoRan successfully perforated 165 feet of Wilcox sands in July 2012. Prior to removing the blow out preventer and installing the production tree, McMoRan performed a routine pressure test on the seal system, which indicated that the seal assembly needed to be replaced. Prior to evacuating for the storm, McMoRan successfully suppressed flow in the well, removed the production tubing and cleaned out the wellbore to approximately 27,500 feet. Remaining steps required before flow testing include cleaning out the bottom 900 feet of the hole, installing the seal assembly, packer and production tubing in the hole, removing the blowout preventer and installing the production tree. Operations have resumed following Hurricane Isaac to complete the remaining steps and McMoRan currently expects to conduct a measurable flow test during the month of September 2012. Timing estimates may vary depending on operating conditions in the well, weather and other factors.

As previously reported, McMoRan has drilled two successful ultra-deep sub-salt wells in the Davy Jones field. The Davy Jones No. 1 well logged 200 net feet of pay in multiple Wilcox sands, which were all full to base. The Davy Jones offset appraisal well (Davy Jones No. 2), which is located two and a half miles southwest of Davy Jones No. 1, confirmed 120 net feet of pay in multiple Wilcox sands, indicating continuity across the major structural features of the Davy Jones prospect, and also encountered 192 net feet of potential hydrocarbons in the Tuscaloosa and Lower Cretaceous carbonate sections.

Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). McMoRan is the operator and holds a 63.4 percent working interest and a 50.2 percent net revenue interest in Davy Jones. Other working interest owners in Davy Jones include: Energy XXI (EXXI) (15.8%), JX Nippon Oil Exploration (Gulf) Limited (12%) and Moncrief Offshore LLC (8.8%).

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HOUSTON, Sept. 5, 2012 (GLOBE NEWSWIRE) -- Energy XXI (EXXI) (EXXI.L) today provided an update to operations following hurricane Isaac in the Gulf of Mexico.

On Monday Aug. 27, 2012, prior to hurricane Isaac making landfall in Southeast Louisiana, the company had safely evacuated all offshore personnel and shut-in production in the Gulf of Mexico. Following the storm, inspections of the company's platforms and facilities revealed no significant damage. Personnel have been transported back to the platforms and have begun to reestablish production. The company is awaiting notification from third-party gas plant operators to fully ramp up production.