Energy Prospectus

Energy XXI (EXXI): An updated Net Income and Cash Flow Forecast is now available under the Sweet 16 Tab. My adjusted Fair Value for EXXI can be found on the spreadsheet.

My EPS and CFPS has gone up but I've decided to lower my Fair Value estimate to 6X CFPS just because my Fair Value estimate is so far above the First Call price target. 6X CFPS is a very conservative multiple for a company that has more than 30% annual production growth locked in plus incredible exploration upside. If MMR can complete the Davy Jones well, EXXI has a lot of upside for us.

Also, keep in mind that my forecast is based on the low end of company production guidance. EXXI is generating a lot of free cash flow, so its balance sheet will be in great shape by the end of their fiscal year (June 30).

Also, my EPS forecast is below the current First Call forecasts for Q3 and Q4. My CFPS forecast is slightly higher.

Based on the 3/31 closing price, EXXI is trading at less than 3.5X my CFPS estimate for the fiscal year that ends June 30th. Am I the only one that thinks that is insane for a company with this much exploration upside?

i think there are a bunch of lazy analysts out there that are looking primarily at the mmr thing and not paying enough attention to exxi's base business.

I agree. Energy XXI is a lot more than their interest in the MMR Deep Shelf Program (which does have incredible potential). I think the delay in getting Davy Jones completed is really holding this one back.

There is nothing in my forecast for Davy Jones.

I think it is also holding down PXP, which looks very strong to me.