Investor Presentation

Transcription

1 12/10/14 Investor Presentation Capital One Energy Conference December 10-11, 2014 NASDAQ: EXXI AIM: EXXI

2 Forward-Looking Statements This presentation contains statements about future events and expectations that can be characterized as forward-looking statements, including, in particular, statements about the Company s plans, strategies and prospects. The use of the words anticipate, estimate, expect, may, project, believe and similar expressions are intended to identify forward-looking statements. Although the Company believes that the plans, intentions and expectations reflected in or suggested by such forwardlooking statements are reasonable, they do involve certain assumptions, risks and uncertainties, and the Company cannot assure you that those expectations will prove to have been correct. Actual results could differ materially from those anticipated in these forward-looking statements as a result of the factors described in this presentation and disclosed in the Company s public filings with the Securities and Exchange Commission.. Many of these factors are beyond the Company s ability to control or predict. The Company cannot assure you that its future results will meet its expectations and investors are cautioned not to place undue reliance on any forward-looking statement made by the Company or its authorized representatives. All subsequent written and oral forward-looking statements attributable to the Company and persons acting on its behalf are qualified in their entirety by the cautionary statements contained in this paragraph and elsewhere in this presentation. The Company does not have any obligation or undertaking to disseminate any updates or revisions to any forward-looking statement contained in this presentation or the admission document to reflect any change in the Company s expectations about the statement or any change in events, conditions or circumstances on which the statement is based. 2

3 Company Snapshot Enterprise Value November Average Production # of Rigs Operating FY14 Proved Reserves Acreage Seismic Ownership Current Metrics $4 Billion 58.4 Mboe/d (72% Oil) 1 drilling rig 1 workover rig MMBOE 252 blocks 685,000 net acres 16,146 sq. miles of 3D seismic Fiscal 2015 Plan Generate free cash flow Debt reduction Target long-term net debt-tocapitalization ratio of 50% Improve capital efficiencies Workovers Recompletes Reduced downtime Asset rationalization Liquidity preservation Lower cost structure Manage hedge portfolio >60% of calendar 2015 oil production hedged at floor of >$84/Bbl 3

4 Key Executive Changes John Schiller, Jr. CEO Bruce Busmire CFO Antonio de Pinho COO Bo Boyd SVP General Counsel Kerry McDonough SVP Human Resource & Administration Note: Blue boxes denote in current position within last three years 4

5 Bruce Busmire, CFO Bruce Busmire CFO Hugh Menown Executive Vice President Chief Accounting Officer Greg Smith VP Investor Relations Alex Valdez Director Corporate Planning Mark Fisk Director, Corporate Reserves Joe Adkison Information Systems Manager Jean-Pierre Breaux Treasurer Marketing & Risk Management Note: Blue boxes denote in current position within last three years 5

6 Antonio de Pinho, COO Antonio de Pinho COO Andre Broussard SVP Exploitation & Exploration Perrin Roller SVP Well Operations Granger Anderson SVP Land Keith Acker SVP Production Tom O Donnell SVP M&A and JV Rex Anderson VP HS&E Note: Blue boxes denote in current position within last three years 6

7 Image goes here FINANCIAL UPDATE 7

8 Driving to Free Cash Flow $MM Free Cash Flow at $60 WTI Crude Price ($MM) Q FY15 2Q FY15 3Q FY15 4Q FY15 1Q FY16 2Q FY16 Calendar 2015 ~$80-$100 million debt pay down in calendar 2015 at $60/Bbl WTI Note: Does not include asset monetizations 8

9 $MM No Near-Term Maturities Debt Maturity Schedule* $1,000 $900 $800 $700 $600 $120 $510 (Feb.) $500 $400 $300 $200 $100 $526 $646MM of Cash and Revolver Availability (as of 9/30/2014) $750 (Dec.) $400 (Dec.) $250 $500 $650 $ Cash Revolver Availability 9.25% Notes 8.25% Notes 3.00% Convertible Notes 7.75% Notes 7.50% Notes 6.875% Notes *Does not include $748 MM borrowing on revolver 9

10 Reserves at Forward Strip 6/30/14 SEC Pricing MMBOE 2P Reserves $11,230 MM PV-10 1 Current Strip Pricing MMBOE 2P Reserves $8,079 MM PV-10 2 Probable 96.1 MMBOE PV-10 $3,629 MM 1 PD MMBOE PV-10 $4,267 MM 1 Probable 96.1 MMBOE PV-10 $2,761 MM 1 PD MMBOE PV-10 $2,828 MM 1 PUD 96.3 MMBOE PV-10 $3,334 MM 1 PUD 96.3 MMBOE PV-10 $2,490 MM 1 1 Before tax, reserves as of , using prices of $103.63/BO and $4.15/MMCF ($96.75/BO and $4.10/MMBTU of gas before differentials and BTU), based on the SEC-prescribed first of the month average prices for preceding twelve months. 2 Before tax, reserves as of , using 12/1/14 strip pricing 10

11 PV-10 $ MM Reserves at Forward Strip 9000 Reserves at Current Strip Pricing MMBOE 2P Reserves $8,079 MM PV $2, $5, PUD $2,490 $3,844 $4, PDNP $ PDP $2, P Reserves Probable Reserves Debt 2P PV-10 Value Less Debt 1 Before tax, reserves as of , using 12/1/14 strip pricing 11

12 Debt Covenant Test Total Leverage Ratio = Total Debt EXXI Gulf Coast Bonds 2,660 Revolver Balance Due 748 Other 39 P&A Letters of Credit 226 P&A Performance Bonds 171 Total Debt 3,844 Last 12 Months EBITDA Net Income (Loss) 16 Income Tax 27 Interest Expense 212 DD&A and Accretion 630 Acquisition/Financing Expenses 78 Other One-time Adjustments 50 (includes hedge gains/loss and certain exploration expenses) TTM Adjusted EBITDA 1,013 = 3.79x Removal of non-market covenant item implies a Total Leverage Ratio = 3.62x Current Debt Covenant Threshold* 4.25 *Debt covenant is Total Leverage Ratio calculated as Debt/Last Twelve Months EBITDA. Last twelve months EBITDA includes September 2014 quarter. 12

13 Monetization of Pipeline Assets Grand Isle Terminal Aerial West Delta Receiving Station Delta Gathering Venice Station Grand Isle Station WD 30J West Delta Receiving / Delta Gathering Stations T-Bay GI 16BB GI 22L WD 41A ST 21D/H WD 73 WD 79A WB E-5 Facility ST 54G Highlights ST 63A Proceeds used to pay down debt MC 268 WD 86A SP 77A SP 87D SP 55A SP 86C SP 89B SP49 Currently working with FERC to deregulate pipelines SP 93A MC 280A Targeting transaction close by fiscal year-end MC 397A Midstream- Central Gulf 13

14 Non-Core Divestiture Update Bringing Combined EXXI + M21K GoM Divestiture to market Geographically diverse across GoM Shelf EXXI EXXI Divest M21K Divestiture Highlights ~16-17 Mboe/d (6-7 Mboe/d EXXI net production) High grades asset base by selling non-core fields Monetization allows for reducing corporate debt Substantial package size will attract buyers, and combining EXXI divestiture with M21K could achieve higher multiple Physical data room now open Prospective Buyers Independent GoM Producers GoM Start-ups Private Equity 14

15 EXXI Realized Pricing Historically, EXXI has realized a premium to WTI pricing. Period 4Q FY2014 1Q FY2015 Oct 2014 Average WTI Oil Price* $ $97.17 $84.34 Price per BBL** Realized Crude Oil Price $ $ $86.42 Realized NGL Price $42.77 $37.81 $37.13 Realized Crude Oil/NGL Price $ $96.38 $82.92 Price per Mcf** Realized Price $4.47 $3.70 $3.69 * Nymex ** Excludes the impact of hedges 15

16 Crude Hedging for Price Protection 1,000 bpd 24,000 Bbl/d (60%) of crude production hedged at ~$84 40 Crude Hedging (Calendar Year) Downside protection while allowing upside participation Provides FCF in second half of fiscal year Protected through calendar 2015 Diverse portfolio of derivative instruments No knockout provisions DEC14 Jan-Mar15 Apr-Dec15 LLS Put Spread WTI Put WTI Collar LLS Collar Brent Collar WTI 3-Way Brent 3-Way LLS Swap Crude Oil December 2014 Average Jan-Mar 2015 Average Apr-Dec 2015 Average Subfloor Floor Ceiling Subfloor Floor Ceiling Subfloor Floor Ceiling LLS Swap Brent 3-Way WTI 3-Way Brent Collar LLS Collar WTI Collar WTI Put LLS Put Spread

17 Market-to-Market for Hedges $MM Brent WTI LLS Nat Gas Total Dec ,907,089 8,428,078 9,545, ,871 23,542,168 Cal ,665,000 15,091,474 33,539,360 1,228, ,524,090 Cal ,307,000 5,307,000 Total 55,572,089 28,826,551 43,084,490 1,890, ,373,258 17

18 $ MM LOE Driving Costs Lower Total Savings of $7.6 - $17.6 MM Versus 1 st Quarter *One-time charges associated with EPL integration 18

19 Year 1 Savings Expected Between $60 - $100 MM Original Expectations $MM Current Annualized Savings $MM Year 1 Year 2 Cumulative Year 1 LOE (before insurance) $5 $20 Insurance G&A Total Savings $27.5 $50 LOE (before insurance) $30 Insurance 30 G&A 40 Total Savings $100 LOE savings from consolidation of shore base, contracts and vendor negotiations Windstorm insurance savings G&A savings from high grade teams LOE savings from economies of scale expected to continue increasing Insurance savings greater than expected from policy renewal G&A savings does not include non-cash stock-based compensation or non-recurring severance charges 19

20 FY 2015 Focus Areas Generate free cash flow Debt reduction Improve capital efficiencies Workovers Recompletes Reduced downtime Asset rationalization Liquidity preservation Lower cost structure Manage hedge portfolio Image goes here 20

21 Contact Greg Smith Vice President of IR Energy XXI 1021 Main Street, Suite 2626 Houston, Texas Kim Pinyopusarerk Investor Relations Associate Energy XXI 1021 Main Street, Suite 2626 Houston, Texas NASDAQ: EXXI AIM: EXXI

22 Image goes here ADDENDUM 22

23 Operating Unit Cost Analysis Period Fiscal Year st Quarter FY15 Revenue ($MM) 1, MBO/d MBOE/d NGL % (of oil volumes) 8.1% 7.7% Total Realized $ / BOE Average WTI Oil Price* LOE Insurance Expense Workover/Maintenance Direct LOE Gathering & Transportation DD&A G&A Production Taxes/Other Hedging Impact EBITDA * EIA.gov 23

24 Current Hedge Position* Period Fiscal Quarter Instrument Type Daily Volumes Average Price Index CRUDE OIL 10/ /2014 Q Collars 2,000 bbl/day $90.00 floor, $ cap BRENT 10/ /2014 Q Put Spreads 3,400 bbl/day $70.00 sub-floor, $90.00 floor WTI 10/ /2014 Q Put Spreads 1,200 bbl/day $66.43 sub-floor, $86.43 floor BRENT 10/ /2014 Q Swaps 7,800 bbl/day $91.95 fixed price LLS 11/2014-3/2015 Q2-Q Put 5,700 bbl/day $82.87 floor WTI 11/ /2014 Q Three- Way Collars 10,000 bbl/day $70.00 sub-floor, $90.00 floor,$ cap WTI 10/2014-6/2015 Q2-Q Three-Way Collars 9,000 bbl/day $70.46 sub-floor, $90.46 floor,$ cap BRENT 1/2015-6/2015 Q3-Q Collars 5,000 bbl/day $80.00 floor, $ cap LLS 1/2015-6/2015 Q3-Q Put Spreads 7,000 bbl/day $70.00 sub-floor, $80.00 floor LLS 1/2015-6/2015 Q3-Q Collars 1,500 bbl/day $75.00 floor, $85.00 cap WTI 7/ /2015 Q1-Q Three-Way Collars 10,000 bbl/day $71.00 sub-floor, $91.00 floor, $ cap BRENT 7/ /2015 Q1-Q Put Spreads 7,000 bbl/day $70.00 sub-floor, $80.00 floor LLS 7/ /2015 Q1-Q Collars 5,000 bbl/day $80.00 floor, $ cap LLS 7/2015-6/2016 Q1-Q Collars 1,800 bbl/day $72.16 floor, $88.16 cap WTI 7/ /2016 Q1-Q Collars 2,000 bbl/day $70.00 floor, $90.55 cap WTI NATURAL GAS 10/ /2014 Q Three-Way Collars 45,600 MMBtu/day $3.36 sub-floor, $4.00 floor, $4.60 cap NYMEX 10/2014 Q Put Spread 13,000 MMBtu/day $3.25 sub-floor, $4.00 floor NYMEX 10/2014-6/2015 Q2-Q Swaps 4,500 MMBtu/day $4.21 fixed price NYMEX 7/ /2015 Q1-Q Swaps 4,300 MMBtu/day $4.31 fixed price NYMEX *Updated positions effective 10/1/ /31/2016, updated 12/8/2014 (Includes assumed EPL Hedges) 24

25 Balance Sheet $16.00 Net Debt/Total Proved $14.73 All figures in 000s except per unit values, and include cash and debt at the parent 6/30/11 6/30/12 6/30/13 6/30/14 Cash and cash equivalents 28, , ,806 $12.00 $8.00 $9.31 $7.53 $7.68 Short-term Debt 4,054 4,284 19,554 15,020 Long-term debt (principal amounts): $4.00 $0.00 6/30/11 6/30/12 6/30/13 6/30/14 Net Debt/Proved Developed Revolving credit facility 107, , , % Senior Notes 750, , , , % Senior Notes 250, , , , % Senior Notes , % Convertible Senior Notes ,000 $25.00 $20.00 $ % Senior Notes , % Senior Notes ,000 $15.00 $10.00 $13.30 $11.03 $12.51 Other long-term debt 1,549 14,060 11,491 7,950 Total Long-term Debt 1,109,333 1,014,060 1,350,491 3,756,950 $5.00 $0.00 $12.00 $8.00 $4.00 $0.00 6/30/11 6/30/12 6/30/13 6/30/14 Fixed Costs/BOE Produced $11.60 $7.31 $6.06 $6.50 6/30/11 6/30/12 6/30/13 6/30/14 Net Debt 1,084, ,257 1,370,045 3,626,164 Preferred Stock (face value) 7.25% perpetual convertible preferred % perpetual convertible preferred 262, , , ,297 Total Preferred Stock 263, , , ,097 Total Proved Reserves (MMBOE) Net Debt/Total Proved $9.31 $7.53 $7.68 $14.73 Net Debt/Total Capitalization (Book) 53% 39% 49% 67% Fixed Costs/BOE produced $7.31 $6.06 $6.66 $