Energy XXI To Sell Its Non-Core Onshore Natural Gas Assets -
The Company is Re-Deploying the Proceeds for a More
Efficient Utilization - Deal Analysis from GlobalData
Reference Code: GDGE0303M&A Publication Date: May 2011
1 Table of Contents 2 Energy XXI To Sell Its Non-Core
1 Table of Contents.................................................................1
Onshore Natural Gas Assets
1.1 List of Tables .................................................................1
2 Energy XXI To Sell Its Non-Core Onshore Natural Gas 2.1 Deal Overview
Assets ..................................................................................1 Deal Type: Asset Transactions
2.1 Deal Overview ...............................................................1
2.2 Deal in Brief ...................................................................1 Deal Status: Announced
2.3 The Current Deal is in Line with Energy XXI’s ‘Oil-
focused Acquire-and-Exploit’ Strategy ..........................1 Announced Date: May 12, 2011
2.4 Energy XXI has been Raising Funds Through Equity
and Debt Offerings for Both Organic and Inorganic 2.2 Deal in Brief
Growth ...........................................................................2
2.5 Deal Financials and Valuations .....................................3 Energy XXI (Bermuda) Limited (Energy XXI) agreed to sell non-
3 Appendix ..............................................................................4 core, mostly non-operated, onshore natural gas assets to a
3.1 Methodology ..................................................................4 private buyer, for a purchase consideration of $41m in cash.
3.2 Contact Us.....................................................................5
3.3 Disclaimer......................................................................5 The transaction is effective on June 1, 2011 and is expected to
be completed by June 30, 2011. The transaction implies a deal
1.1 List of Tables value of $25,334.71 per boe of daily production.
Table 1: Energy XXI, Debt and Equity Offerings Details, 2010-
2011 .........................................................................2 2.3 The Current Deal is in Line with Energy
Table 2: Companies Involved ....................................................3 XXI’s ‘Oil-focused Acquire-and-Exploit’
Table 3: Financials of the Deal ..................................................3 Strategy
Table 4: Target Information .......................................................3
Table 5: Target’s Production and Reserves Information ............3 On May 12, 2011, Energy XXI entered into an agreement to sell
Table 6: Company Valuation Multiples ......................................3 its non-core, mainly non-operated, onshore natural gas assets
Table 7: Commodity Prices in $, Last Close ..............................3 to a private buyer for $41m in cash. The assets comprise 70
Table 8: Vendor Information ......................................................3 producing wells in 20 fields with an average net production of
eight million cubic feet per day (MMcf/d) of natural gas and 285
barrels per day (bbl/d) of oil, or a total equivalent of 9.7 MMcf/d.
The assets had less than 42 billion cubic feet (bcf) of reserves.
The company did not sell certain deep rights within the divested
properties and the Laphroaig and Cote de Mer discoveries as it
believes that the assets have significant potential.
The current divestiture of natural gas assets is in line with
Energy XXI’s oil-focused acquire-and-exploit strategy. The
asset transaction will allow the company to focus its attention
on properties which it operates and can add value to its
reserves base. Energy XXI’s property, plant and equipment cost
will decrease. Through the divestiture, the company will reduce
its future development costs and asset retirement obligations
significantly as only l