Energy Prospectus

Our updated company profile for Energy XXI (EXXI) is now available under the Sweet 16 Tab.

The oil and natural gas company on Wednesday reported fiscal second-quarter earnings of $93.4 million, or $1.11 a share. In the second quarter of last year, the company reported a loss of $11.3 million, or 17 cents a share.

Energy XXI's estimated P/E for next year is 8.74. The average forward P/E for exploration and production companies is 274.28.

"We are increasing our target price by $1 to $40 on the greater-than-expected oil price premium and the increase in oil production from recent drilling projects," Capital One analysts wrote in a report Friday. "We continue to like the stock with our new target representing 16% upside but note that a solid Davy Jones flow test result of 40+ MMcfe/d gross (news expected by March) is likely needed to keep the stock moving significantly higher." Fourteen of the 15 analysts who cover the stock rated it a buy. One considered it a hold.

TheStreet Ratings gives Energy XXI a B- grade with a $44.51 price target. The stock closed Thursday at $34.61 and has risen 11.97% year to date.

Here is a good analysis of how the market views EXXI. Let me add that although their production is 72% liquids on a boe basis, liquids generated ~91% of revenues. This is an oil company. Plus, I am expecting production to ramp up sharply into year-end (June 30).

http://www.fool.com/investing/general/2 ... s-thr.aspx