NEW ORLEANS, Jan. 31, 2013 (GLOBE NEWSWIRE) -- EPL Oil & Gas, Inc. (EPL or the Company) (NYSE:EPL) today provided an operational update.
- 2012 oil exit rate above guidance at approximately 16,500 Barrels (Bbls) per day
- 2012 operational results include 28 successful development and exploration projects for a 90% success rate
- Organic reserve replacement expected to exceed production withdrawals due to its highly successful 2012 capital program
- Hedging provides significant downside protection of cash flow, with 62% of forecasted oil production hedged in 2013 and substantial oil hedges added in 2014
EPL announced its oil production exit rate for 2012 was estimated to be approximately 16,500 Bbls per day, exceeding the Company's guidance of 16,000 Bbls per day. Total company exit rate is estimated at year end to be approximately 22,300 Boe per day. Based upon projected strong fourth quarter 2012 performance, EPL currently expects EBITDAX for full year 2012 to be in the mid to upper range of the Company's guidance of $275 million to $285 million.
EPL also reported that its 2012 operational results include 28 successful development and exploration projects for a 90% success rate. During 2012, capital expenditures on exploration and development activities totaled approximately $230 million, including $10.7 million of seismic purchases and $7.0 million of lease purchases. Based on the high success rate in 2012, EPL internal projections indicate the Company has more than organically replaced last year's production withdrawals through execution of high impact projects. Major rig operations are ongoing, mainly executing infield development and exploration work within its core field areas. For full year 2013, EPL still expects to spend approximately $300 million on its development and exploration activities.
Gary Hanna, EPL's President and CEO, stated, "While the base integration of our recently acquired Hilcorp assets is complete, we continue to identify additional field cost savings while high-grading near term projects and reprocessing 3-D seismic to unlock the upside potential of the properties. This process, successful in prior acquisitions, together with good execution and efficient capital allocation, resulted in the ramping up of oil production and a solid performance in 2012. We expect this trend to continue as we drive organic growth on our significantly larger asset base."
The Company has continued to layer in additional downside protection in the form of swaps and collars for 2013 and 2014 to protect its cash flow. For full year 2013, EPL has a total of 11,157 Bbls of oil per day hedged, the majority of which is hedged using Brent swaps at a fixed price averaging $106.01 per Bbl. For full year 2013, EPL has a total of 9,562 Mcf per day of gas hedged, all of which is hedged using swaps at a fixed price averaging $3.51 per Bbl. For full year 2014, EPL has a total of 8,715 Bbls of oil per day hedged, all of which is hedged using Brent swaps at a fixed price averaging $101.13 per Bbl. For full year 2014, EPL has a total of 5,000 Mcf per day of gas hedged, all of which is hedged using swaps at a fixed price averaging $4.01 per Bbl.
Description of the Company
Founded in 1998, EPL is an independent oil and natural gas exploration and production company based in New Orleans, Louisiana, and Houston, Texas. The Company's operations are concentrated in the U.S. Gulf of Mexico shelf, focusing on the state and federal waters offshore Louisiana. For more information, please visit www.eplweb.com.
This press release may contain forward-looking information and statements regarding EPL. Any statements included in this press release 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: 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; 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, particularly with respect to internal estimates that are not prepared by independent reserve engineers; unanticipated recovery or production problems; 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 properties acquired in acquisitions; integration of acquired assets; 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/)
CONTACT: Investors/Media T.J. Thom, Chief Financial Officer 504-799-1902 firstname.lastname@example.org
Source:EPL Oil & Gas, Inc.