Replies to post #1350 on Energy XXI Ltd fka EXXIQ

[lesgetrich]

From the Conference call...

Bruce Busmire

Thanks, John. In my comments I want to address four areas. One CapEx and capital discipline, G&A and LOE, bond purchases and our liquidity. As we announced this fiscal year we've estimated our capital budget to be between $130 million to $150 million. Capital discipline continues to be a major driver of our business plan this fiscal year. Our capital is highly focused on recompletions. I'll note that we have completed two development drill wells that are already online, leaving us with a robust inventory of low risk opportunities.

In addition to LOE G&A is an area where we have made significant reductions and continue to look for ways to operate more efficiently. As John mentioned we have trimmed lifting cost by 30% since July 2014. Some of this is a direct result of how service costs have come down in light of the current commodity price environment. However it is important to note that our field operations team has also made significant adjustments to the way they do business, accounting for a large part of these reductions.

Turning to bond repurchases; with the approval of our Board we began bond buybacks with the ultimate goal of reducing debt by up to $1 billion. To-date we have repurchased $428 million in face value of our bonds as shown in slide seven as fractions on the dollar, saving us over $32 million in annualized interest payments so far. We will continue to address this as the market allows. Additionally we will continue to evaluate other options to significantly reduce our overall debt. As a result, as in the past we will not be answering any specific questions on our liability management program.

Finally on liquidity, after making the first interest payment on our second lien notes in September and using cash to buyback bonds we still have $679 million of total liquidity remaining as of September 25th, noting that 556 million of that is in cash. We will continue to be very judicious with the use of our liquidity. In October we will begin our semi-annual predetermination on our borrowing base. If you recall we proactively lowered our revolver in March from $1.5 billion to $500 million. We do not foresee any adjustments to that number.

As I said, no BK seems to be in the cards for some time. Dividends on Preferreds seem to be secure as they are only a minor contributor to the total debt.