EXXI new forecast available
Posted: Sat Mar 23, 2013 10:54 am
Energy XXI (EXXI): An updated Net Income & Cash Flow Forecast model has been posted under the Sweet 16 Tab. My adjusted Fair Value Estimate is shown at the bottom of the spreadsheet.
I doubt EXXI will approach my Fair Value Estimate (6X CFPS) anytime soon. They recently announced that fiscal Q3 production (ending 3/31/2013) would be approximately 40,000 boepd (29,000 bbls of light oil per day selling at close to Brent), which is slightly below Q2 production. The company says about 5,000 boepd is being choked back due to 3rd party facility limitations. My forecast assumes that production will be near 50,000 boepd by fiscal year-end 6-30-2013 (it is 46,000 boepd now).
On a more positive note, the company's new joint venture with Apache looks very promising and progress is being made with their horizontal development well program.
Apache Joint Venture
The company has entered into an agreement with Apache Corp. to explore for oil and gas pay sands associated with salt dome structures on the central Gulf of Mexico shelf. The area of mutual interest (AMI) includes several salt domes within a 135 block area. In addition, Energy XXI has acquired a 25 percent working interest in 21 non-producing primary-term leases with Apache. A new wide azimuth seismic program is underway to define the potential of the AMI, covering approximately 633,000 acres.
"This joint venture exemplifies our interest in exploring salt structures where new seismic data, remapping and remodeling could uncover significant hidden hydrocarbons," Energy XXI Chairman and Chief Executive Officer John Schiller said. "Our Pendragon exploration well, being drilled in the Vermilion area, is a similar analog. We are very excited about the potential of this new joint venture with Apache, a world-class operator with extensive expertise in the Gulf of Mexico."
I doubt EXXI will approach my Fair Value Estimate (6X CFPS) anytime soon. They recently announced that fiscal Q3 production (ending 3/31/2013) would be approximately 40,000 boepd (29,000 bbls of light oil per day selling at close to Brent), which is slightly below Q2 production. The company says about 5,000 boepd is being choked back due to 3rd party facility limitations. My forecast assumes that production will be near 50,000 boepd by fiscal year-end 6-30-2013 (it is 46,000 boepd now).
On a more positive note, the company's new joint venture with Apache looks very promising and progress is being made with their horizontal development well program.
Apache Joint Venture
The company has entered into an agreement with Apache Corp. to explore for oil and gas pay sands associated with salt dome structures on the central Gulf of Mexico shelf. The area of mutual interest (AMI) includes several salt domes within a 135 block area. In addition, Energy XXI has acquired a 25 percent working interest in 21 non-producing primary-term leases with Apache. A new wide azimuth seismic program is underway to define the potential of the AMI, covering approximately 633,000 acres.
"This joint venture exemplifies our interest in exploring salt structures where new seismic data, remapping and remodeling could uncover significant hidden hydrocarbons," Energy XXI Chairman and Chief Executive Officer John Schiller said. "Our Pendragon exploration well, being drilled in the Vermilion area, is a similar analog. We are very excited about the potential of this new joint venture with Apache, a world-class operator with extensive expertise in the Gulf of Mexico."