NEW ORLEANS--(BUSINESS WIRE)--Energy Partners, Ltd. (EPL or the Company) (NYSE:EPL) today reported it has executed an exploration agreement (EB Deep Exploration Agreement) with Phoenix Exploration Company LP (Phoenix) to explore deeper depths within the Company’s 100% owned East Bay field. The EB Deep Exploration Agreement covers the prospective areas beneath EPL’s current producing horizons below approximately 14,000 feet. Technical teams from both companies will collectively use the 223 square miles of newly reprocessed seismic data owned by EPL covering the East Bay field and surrounding areas to generate prospects. The agreement provides for EPL to farm out acreage in the East Bay field, with a promoted overriding royalty interest in favor of EPL on interest Phoenix earns within successful prospect areas.
Gary Hanna, EPL’s CEO, commented, “This alliance is designed to exploit the unexplored moderate deeper depths underlying our large East Bay field. Phoenix was selected above others because of their expertise and excellent track record exploring similar plays in this region. By leveraging our respective skill-sets, the agreement allows us to more efficiently generate and drill high-impact prospects below our existing shallow productive horizons. The plays we are targeting are at moderate prospect depths of 14,000 to 20,000 feet, and thus are far from costly ultra-deep depths. This sets up a compelling risk-reward, as we are prospecting for high-potential resources on the Gulf of Mexico shelf for shallow water costs.”
Exploration Agreement and Area Highlights:
- Exploration agreement to cover depths below 14,000 feet in the East Bay field, and EPL has retained the right to participate up to a 50% working interest in each prospect area
- EPL expects to drill a first well late this year in depths ranging from 14,000 to 20,000 feet with total drill costs expected to be in the range of $12 to $20 million
- Prospective area largely located within Louisiana state waters where the state currently offers deep drilling incentives for oil and gas exploration through severance tax suspension on wells with a true vertical depth of 15,000 feet or more
- Availability of high capacity existing infrastructure to expedite project cycle times
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.
Description of Phoenix Exploration Company LP
Phoenix Exploration Company LP was founded in 2006 with $350 million of initial private equity commitments from Riverstone Holdings LLC and Pine Brooks Road Partners, LLC. The company was organized to focus on a balanced strategy of oil and natural gas exploration and the acquisition and exploitation of oil and gas properties by applying new geophysical techniques to historically prolific fields and geological trends. Based in Houston, Texas, the company’s assets are located in the coastal parishes of South Louisiana and the shallow waters of the Gulf of Mexico. For more information, please visit www.phoenixexploration.com.
Forward-Looking Statements
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: 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; planned and unplanned capital expenditures; 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/).