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Energy XXI (Bermuda) Limited Message Board

  • greenytheterp greenytheterp Aug 21, 2013 9:04 AM Flag

    Thoughts on Earnings

    Overall it was a solid quarter and, fingers crossed, we have hopefully turned the corner. I thought the press release was understated for a change and was pleased they did not throw in current production figures or future production targets. Better to under promise and over deliver as I believe management has learned their lesson in this regard. I do believe that another two quarters of performance with some luck with the weather and the drill bit and this stock could be significantly higher.

    Some thoughts on the release:

    1. The 3P reserve estimates and PV-10 value is very impressive. Kudos to the team for the major increase in reserves. I wonder how their market capitalization vs. PV-10 ratio of .18 (2 billion/10.9 billion) compares to others in this space and would appreciate people's thoughts on that.

    2. The shallow drilling program, particularly horizontal drilling, is performing very well. I do like that they are focused on the properties where they have higher percentages of WI/NRI since that goes to the bottom line. Five consecutive hits at West Delta is nice and another ( Hulk) is currently in process.

    3. The JV with Apache seems seems to be proceeding nicely while the Exxon JV at Vermillion I am optimistic about. I do not believe these have been valued much into the stock at this time.

    4. I am happy to hear the ultra-deep with Freeport is moving ahead but was a bit disappointed to not hear anything on Davy Jones 2 or Lafitte. They are spending quite a bit of money on this program currently and forecast for 2014 and it would have been nice to hear more.

    5. I would ask posters on the board as to why the capex program is much lower than the prior year. It does appear that the ultra-deep is almost 1/3rd of the exploration drilling costs so they seem committed to this piece. I did find it interesting that they will be spending $67 million on a new platform at West Delta.

    Just some thoughts for discussion.

    Best to all,

    GreenytheTerp

    Sentiment: Strong Buy

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    • I listened to the call. I thought that Schiller's message was being lost a bit due to analysts focused on the flat production numbers. Basically growth would come from the oil/gas mix increasing 5%. One analyst in particular was looking for guidance for 2014 which I believe was quoted as being flat at 47K bpd. There was a comment that they would not be as aggressive in their exploration drilling approaches to multiple pay zones as far as picking up dips and salt domes/faults. John did announce a drilling result "live" on the call which seemed to blow over as far as excitement goes. I know that the market is a bit dull today but I thought they had a very good quarter and have a lot of very good inventory to work on/with. Not sure what the next big catalyst will be though.

    • greeny. just went through yours. thanx. i still think its a 3 yr ordeal and to try and close my eyes. i bought aapl bout 450 and almost puked it up at 390. glad i didnt. hoping for same here. glta

    • #$%$. missed the cc.. anyone hear any big surprises.. thanx in advance

    • Good post Greeny.

      On the UD: As per the GULTU 10Q, DJ2 will not have the long lead high spec equip delivered to the beginning of 2014. The EXL 3 rig was at DJ1 preparing for a major frac job before being pulled off in an emergency to go to Walter O&G to drill a relief well for their blowout they had a few weeks ago. The relief well should be done in September. I suspect the EXL 3 rig will then come back to DJ1 to finish the frac job before moving on to DJ2. As for Lafitte, don't expect ANY news on that for a while as the have let the lease expire with BSEE.

    • buy it and forget it....the big boys cant replace their reserves. M/A is instant replacement.

 
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