O I L G R O W T H V A L U E. JEFFERIES 2013 GLOBAL ENERGY CONFERENCE November 2013

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Transcription:

O I L G R O W T H V A L U E JEFFERIES 2013 GLOBAL ENERGY CONFERENCE November 2013

Forward Looking Statements This presentation may contain forward-looking information and statements regarding EPL. Any statements included in this presentation that address activities, events or developments that EPL expects, believes, plans, projects, estimates or anticipates will or may occur in the future are forward-looking statements. We believe these judgments are reasonable, but actual results may differ materially due to a variety of important factors. Among other items, such factors might include: stock market conditions; the trading price of EPL s common stock; cash demands caused by planned and unplanned capital expenditures; changes in general economic conditions; uncertainties in reserve and production estimates; unanticipated recovery or production problems; hurricane and other weather-related interference with business operations; the effects of delays in completion of, or shut-ins of, gas gathering systems, pipelines and processing facilities; changes in legislative and regulatory requirements concerning safety and the environment as they relate to operations; oil and natural gas prices and competition; the impact of derivative positions; production expenses and expense estimates; cash flow and cash flow estimates; future financial performance; drilling and operating risks; our ability to replace oil and gas reserves; risks and liabilities associated with the properties to be acquired in the acquisition; volatility in the financial and credit markets or in oil and natural gas prices; and other matters that are discussed in EPL s filings with the Securities and Exchange Commission. (http://www.sec.gov/). 2

Company Overview At a Glance Oil Value Play Long Lived Oil Growth Driven Portfolio Balanced Growth Strategy Stock Currently Undervalued Core Acreage Louisiana WD 29 Field South Timbalier Area MP Complex Market Data SM 239 Area SP 78 Area Mkt Cap (10/31/13) 1P Reserves (YE 12) 1PR/P & 2P R/P $1.3 Billion 61% oil, 77 MMboe 9 yrs/ 12 yrs SS 208 Area East Bay & SP 49 Fields 52 Week High $42.64 Listed NYSE: EPL 3

We Are The Premium Long-Term Play A Targeted Approach Prime Real Estate in the Heart of the Basin Focused Acquire & Exploit Strategy - An Unparalleled Track Record Unmatched Technical Expertise To Exploit Untapped Reservoirs- Shallow Thru Deep Operational Excellence -Consistent Performance and the Highest Cash Margins 4

2013 - Compelling Outlook 76% 63% 66% 45% 66% Oil by Production Annual Oil Production Increase Increase in EBITDAX Increase in Capex of Oil Production Hedged All figures estimated based on the midpoint of Company guidance & projections 5

Not Your Typical GOM Company

Acquire & Grow Oil Organically Achieved Oil Growth by Acquiring Assets and Executing Successful Organic Programs 2013 Midpoint Production Guidance Organic Growth Predominately from ASOP and Legacy Assets Bopd Storm Downtime Significant Organic Growth from Hilcorp Begins 2014 7

Grow to Increase Opportunity Set 77.4 MM 37.1MM Organic Growth 9.9 MM 187% Reserve Replacement 27.4 MM Organic Growth 1.2 MM Organic Growth 4.7 MM Acquisition 9.4 100% Reserve Replacement Acquisition 35.7 MM Base* 26.2 MM Base* 23.0 MM Base* 31.8 MM 2010 Proved Reserves 2011 Proved Reserves 2012 Proved Reserves *Base = Beginning year proved reserves minus production. Net production (MMBoe): 2010: 4.9; 2011: 4.5; 2012: 5.3 8

Abundant Free Cash Flow Operating Within Cash Flow Capital spend on exploration & development will remain well within cash flow Free cash flow from assets allows EPL to further grow liquidity Fully identified $335Mm Budget ~1/3 of budget to be spent on Hilcorp assets 95% focused on oil projects Currently 60 Major Projects Intended to drive production and reserve growth 9 Note: Capex includes seismic and lease sale expenditures.

Not Your Typical GOM Company

Accelerating Growth Grow the Asset Align the Value with the Asset Form the Base Develop sound financial structure Realign & high grade the staff Position for Growth Begin strategic acquisitions Reprocess 3-D in core areas Grow organically through the drill-bit Acquire transformational Hilcorp assets Continue organic growth using state-of-the-art reprocessing techniques Catalog 3P potential across combined asset base Pursue new acquisition opportunities 11

Organic Development Drives Success Rapid Reserve Growth (MMBoe) Efficient exploiter of acquired assets Tripled reserves in < 2 years Acquired assets for $238 million 2012 1P SEC PV-10 $681 million Repeatable formula for success Aim to at least double the acquired Hilcorp assets (18 MMbbls of oil) 9.4 (1) 2011 Acquired Proved Reserves Total: 17.0 Probable 4.2 Proved, 11.4 Production 1.4 YE 2011 Reserve Profile Total: 27.0 Probable 7.2 Current Proved 16.5 Production 3.3 YE 2012 Reserve Profile (1) Includes additional acquisition of Main Pass assets in 2011. Demonstrated Organic Success on Acquired Properties 12

Growth Potential on the Shelf Why Now? Today Before Shallow Pay Deeper Field Pay Deeper Field Potential Drilled many shallow wells but bypassed productive sandsconcentrated on 100 + zones New exploration effort is underway on GOM Shelf Significant resources exist just below field pays Big fields get bigger Operators were on a treadmill - focused on high decline gas in a low oil price environment Technology Drives: Limited 3D seismic Operators hit pressure and stopped drilling Regional understanding is key EPL holds prime leasehold positions Salt Deep Potential 13 Warning: Data Belongs to WesternGeco. See License for Restriction. Better imaging Reduced risk profile Greater drilling and extraction efficiencies

EPL s Growth Portfolio 1P: 77 MMBOE 2P: 27 MMBOE In historical field pays Multi-year inventory 3P: Just below Field Pays 12,000 20,000 Significant upside potential Longer term view 14 2P: 16 MMBOE Legacy + 11 MMBOE Hilcorp + 65+ MMBOE Drilling Inventory 3P: 150 300 MMBOE

1P Reserves Repeatable Development Programs w/ Reserve Add Exposure 1P asset base has over 292 identified locations 257 behind pipe, 35 PUD Technical teams expanding locations Multiple Pay Horizons Unique, core legacy assets Huge structures with stacked pays Quick cycle times Reserve add exposure Reserves By Area Reserves By Category Low risk projects & access methods 15 2012 90% execution success & $26/Boe F&D New wells, sidetracks, horizontals Major rig & wireline workovers

2P Reserves Booked Reserves and Upside Potential 92+ MMBOE in 2P Reserves Hilcorp 11 Acquisition MMBOE Inventory 65+ MMBOE Legacy 16 MMBOE PUD s roll off to 2P Performance adds New undrilled opportunities in field pays 16 Note: Preliminary probable reserves attached to proven Hilcorp core areas equal 10.9 MMBoe(77% oil) as NSAI continues to assess entire Hilcorp proved reserves as of 1/1/2013.

2P Inventory Prospect Inventory 65+ MMBOE Project Inventory by Area Other 15% Hilcorp Core 37% Legacy Core 48% Legacy Core Hilcorp Core Inventory Reserves by Area Other 6% 65+ MMBOE Inventory Resources 2P Inventory continues to expand 79 total projects identified Hilcorp Core 58% Legacy Core 36% 17

3P Program Timeline for Unlocking 3P Potential New Seismic Commitments $45 million of capital commitments to multi-client 3D licensing Comprised of new 3D datasets and state-of-the-art reprocessing Focus on Central GOM oil window PSDM Near-Term Steps to Test the Concept Expanding regional exploration team New High Resolution datasets in-house over select core areas in early 2014 Some prospects could begin drilling late 2014/early 2015 High Frequency RTM 18 Warning: Data belongs to FairfieldNodal. See License for Restriction.

3P Program Timeline for Unlocking 3P Potential Longer-Term Steps to Develop the Play Technical leader in procurement of new 3D datasets (1+ million acres, 200 blocks) Improved imaging for untested salt flanks and sub-salt potential FAN Acquisition to begin mid-2014, drilling to begin as early as 2015 Full Azimuth Nodal (FAN) Acquisition Recent & Proposed 3D Seismic Acquisition in Central GOM Image courtesy of FairfieldNodal. Key Takeaways: The new 3D seismic shoots will blanket our core areas and employ state-of-the-art 3D technology Designed to image the deeper section, while continuing to enhance the shallow 19

Not Your Typical GOM Company

A Case for Owning EPL Balancing Your Portfolio EPL trades at a significant discount to: 10.0 Oil shale players 9.0 8.6 8.5 Natural gas shale players 8.0 EPL offers investors significant upside potential with low-risk, underexploited assets Company trades at a discount to NAV 2013 TEV / EBITDA 7.0 6.0 5.0 4.0 3.0 2.0 4.4 3.7 1.0 0.0 Oil Shale Gas Shale Peer Avg. EPL Note: As of 10/31/13. Peers include EXXI, SGY, CPE, WTI. Oil Shale group includes NOG, OAS, AXAS, HK, CLR, KOG, ROSE, CRZO, SFY, SM PXD, EOG, GPOR, EVEP, PETD. Gas Shale group include CRK, CXPO, FST, GDP, GMXR, PVA, XCO, ECA, KWK, EOG, REXX, COG, GST, UPL, RRC, MHR, SWN. 21

Cash Margins Outperforming Peers Highest cash margin Highest production from oil Highest realized oil price $21.0 $3.0 $23.1 $10.9 $18.1 $6.4 $62.3 $3.8 $42.3 $51.4 $15.3 $4.0 $6.2 $3.5 $35.1 $26.2 22 Production from Oil 73.0% 49.7% 65.4% 15.7% Oil Revenue $/Bbl $107.68 $103.56 $91.35 $90.81 Total Revenue $/Boe $86.31 $64.21 $68.75 $35.82 Source: SEC public filings for the LTM as of 6/30/13. Note: Capitalized G&A included when available; Non-cash comp excluded. Peer average includes: EXXI, SGY and WTI.

Comparison Across Basins % Oil Production Cash Margins ($/boe) PEERS Shallow GoM Drilling & Completion ($MM) OIL SHALE Bakken Eagle Ford Utica GAS SHALE Haynesville Barnett Marcellus R/P (Years) 23 Source: SEC filings, FactSet, IHS Herold as of 6/30/13. (1) Includes EPL Probable reserves of 15.9 MMBoe and Hilcorp Probable reserves of 10.9 MMBoe.

Key Takeaways Value Oil Growth Compelling value proposition: current market valuation does not reflect the quality of our assets & organic inventory Captured a large, high-quality oily asset base with low decline curves Technical expertise to unlock our organic inventory & the financial framework to continue aggregating quality assets 24

Appendix

Strong Management & Professional Team Highly Experienced & Scalable Organization Gary Hanna Chairman, President & CEO Andre Broussard SVP, Geosciences David Cedro SVP, Chief Accounting Officer, Treasurer T. J. Thom SVP, Chief Financial Officer Mac Jensen SVP, Business Development Chad Williams SVP, Production Paul Jones VP, Geosciences Larry Gray VP, Engineering Neel Fallis VP, Reserves Mark Gregory VP, Land Over 237 Years of Combined Experience Strong Technical Staff 26 Deep bench of geoscientists and engineers with technical expertise in shallow GOM Employee careers span years with major oil companies and strong independents Long history with the current assets and extensive knowledge of the region

2013 Guidance ESTIMATED PRODUCTION & SWAP HEDGE VOLUMES Net Production (per day) Oil, including NGLs (Bbls) 14,750-15,750 16,850-17,100 Natural gas (Mcf) 24,000-30,000 31,500-33,000 Boe 18,750-20,750 22,100-22,600 % Oil, including NGLs (using midpoint of guidance) Swap Contracted Volume Oil (barrels) % of Oil swap contracted 46% 60% - 59% % of Boe swap contracted 36% 46% - 45% Average Swap Price Level ESTIMATED EXPENSES (in Millions, unless otherwise noted) Lease Operating (including energy insurance) $ 41.0 - $ 44.0 $ 168 - $ 171 General & Administrative (cash and non-cash) $ 7.0 - $ 7.5 $ 28 - $ 29 Taxes, other than on earnings $ 2.5 - $ 3.5 $ 11 - $ 12 Exploration Expense $ 11 - $ 13 $ 21 - $ 23 DD&A ($/Boe), excluding accretion $ 25.50 - $ 27.00 $ 25.50 - $ 27.00 DD&A ($/Boe), including accretion $ 28.50 - $ 30.00 $ 28.50 - $ 30.00 Interest Expense (including amortization $ 12.5 - $ 13.5 $ 51 - $ 53 of discount and deferred financing costs) ESTIMATED EBITDAX: $475 Million ESTIMATED FREE CASH FLOW: $55 Million 4Q 2013 77% 7,045 $103.63 Full Year 2013 76% 10,157 $104.62 27

Hedging Summary 2013 2014 2015 28

Not Your Typical GOM Company Principal Corporate Office Houston Office 919 Milam, Suite 1600 Houston, TX 77002 Phone: (713) 228-0711 New Orleans Office 201 St. Charles Ave., Suite 3400 New Orleans, LA 70170 Phone: (504) 569-1875 Investor Relations Contact: T.J. Thom Phone: (504) 799-1902 Email: tthom@eplweb.com Website: eplweb.com NYSE: EPL