Energy Prospectus

Q1 results (their Q3) production was slightly lower than my forecast but still a damn good quarter. Free cash flow allows them to start paying dividends. That should draw some attention from funds that can only buy dividend paying stocks.

I will update my forecast and the profile this weekend.

We have a lot of Q1 results rolling in so the interns and I will be very busy.

What I found amazing is the amount of money EXXI has sunk into the MMR wells. I hope Shiller gives some meaningful info on DJ1 during the CC. My sense is they should be fishing for the guns now.

Bob

EXXI had a heck of a quarter and production is up to over 52,000 boepd (70% oil) going into their 4th quarter. I will be going over my forecast carefully tomorrow and I hope to have the profile updated by Monday.

What I like most:
> Production ramping up
> Several more big well about to come on-line
> Growing production and proven reserves while generating a ton of free cash flow.

My forecast model as zero from Davy Jones and this one still looks fantastic. Delays by MMR on completing Davy Jones are keeping a lid on this one. Any success in their deep shelf program is just icing on this cake IMHO.

Sweet 16 Growth Portfolio: An updated company profile for Energy XXI (EXXI) with our Net Income and Cash Flow Forecast has been posted under the Sweet 16 Tab.

MMR's difficulty getting Davy Jones completed keeps a lid on EXXI. I have nothing in my forecast for Davy Jones and I still come up with a Fair Value of $70.50/share. My forecast model is available under the Sweet 16 Tab. - Dan

From article above:

Energy XXI is an independent Gulf of Mexico oil and gas producer, geographically concentrated off the Louisiana coast around the mouth of the Mississippi. Founded in 2005 as an Oil and Gas investment company focused on acquisitions, the company began trading on the Nasdaq in 2007, after completing its first three acquisitions. Their most recent acquisition of shelf assets from Exxon Mobil has been a game changer, providing the potential to nearly double production in less than 12 months and triple cash flow by 2015. EXXI’s inventory now includes over 100 projects ranging from simple recompletions and workovers to new drilling projects, with many already underway. Production should jump from 47 MBOEd to 60 MBOEd by FY end in June of 2012. In addition to their internal drilling program, EXXI is also an original partner on McMoRan’s Ultradeep drilling program targeting Lower tertiary strata at deep drilling depths from shallow water. Drilling in that program has identified Wilcox sands bearing hydrocarbons, and the trend if proven has potential for 100 TCF of gas gross. Davy Jones #1 is in the late stages of completion awaiting perforation and flow testing. However, its final completion has been plagued by equipment problems related to the exceptionally high temperatures and pressures at these depths. Shares of MMR have fallen on the news, and EXXI has been essentially flat this year, despite impending production gains from their own drilling program. This may be a buying opportunity for a company expected to double its production even without the success of the Ultradeep program. Success of Davy Jones #1 may have an even more pronounced effect on the shares.