Private Equity with a Public Ticker
John D. Schiller, Jr.
Chairman and CEO
IPAA Private Capital Conference
Houston, TX - January 18th, 2007
Energy XXI is a new company…
• Formed July 25, 2005
• October 2005 - Successfully completed a $300 million IPO on the
London AIM Market
• February 2006 - Agreed to acquire Marlin Energy Offshore, LLC
for $421 MM
• March 31, 2006 - Shareholders approved the “reverse merger”;
Closed Marlin acquisition April 4, 2006
• June 2006 - Agreed to acquire South Louisiana properties for
$308 million
• July 2006 - Raised $85.6 million through exercise of warrants
and closed South Louisiana acquisition July 28, 2006
• December 2006- Form 10 filing with SEC effective December 29,
2006
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…delivering rapid growth
Enterprise Value / 2P PV10 (1)
$MM
1,500
1,250
1,000
750
500
250
0
2Q06
3Q06
Equity
1. PV10 value is based on current market prices and 2P reserves are as of 7/1/06
4Q06
Debt
1Q07
PV10
3
…at attractive cost parameters
Transaction Value / Proved Reserves(1)
($BOE)
40
$ 3 6 .2
$ 2 6 .7
30
20
$ 16 .6
$ 13 .8
$ 18 .9
$ 19 .7
$ 19 .0
$ 19 .9
$ 19 .9
$ 2 0 .2
$ 2 1.0
$ 2 1.3
$ 2 2 .2
$ 2 2 .6
$ 2 2 .9
$ 2 3 .1
10
0
EG
Y
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Transaction Value / Daily Production(1)
($M/BOE/d)
$ 9 5 .1
100
$ 8 0 .5
80
60
40
$ 3 0 .4
$ 2 9 .3
$ 3 1.3
$ 3 2 .1
$ 3 7 .1 $ 3 8 .7
$ 4 1.7
$ 4 2 .0
$ 4 4 .2 $ 4 4 .9
$ 4 8 .2
$ 5 5 .1 $ 5 5 .3
$ 5 9 .7
20
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1. Per John S. Herold
O
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4
…with experienced management
John Schiller
25 years
Chairman and CEO
experience
Steve Weyel
30 years
President & COO
experience
West Griffin
22 years
Chief Financial Officer
experience
Ben Marchive
28 years
Senior VP- Operations
experience
Steve Nelson
23 years
VP Drilling & Operations
experience
Granger Anderson
25 years
VP Land
experience
Energy XXI
150+ years
Executive Team
experience
 Worldwide VP of E&P - Devon Energy & Ocean Energy
 Management Positions - Burlington Resources
 Started career with Superior Oil in Lafayette, Louisiana
 President & COO InterGen N.A., a Shell Bechtel JV
 Executive VP Integrated Energy – NGC / Dynegy
 20 years in international oil service sector – RTC & Baker
 Chief Financial Officer - Alon USA
 Chief Financial Officer of InterGen North America
 Started career with Bankers Trust, UBS
 VP - Production North America - Ocean Energy
 Manager - Kerr-McGee Corporation
 Started career with Superior Oil in Lafayette, Louisiana
 Manager of Drilling & Operations - Devon Energy
 Production Manager - Ocean Energy
 Gulf of Mexico Operations - Kerr-McGee
 Chief Landman of GOM - Kerr-McGee
 Manager - Westport Resources and Burlington Resources
 Started career with Hunt Oil
 Senior Management Experience
 Highly Successful Growth Companies
 Long Successful Track Records through Multiple Cycles
5
…exploiting high quality assets.
Lake Salvador JDA
Manila Village Field
Rabbit Island Field
Lake Boudreaux Field
Energy XXI Operations Profile
South Timbalier 21 Field
Production:
16,000 BOEPD
Reserves:
2P of 49.1 MMBOE
PV10:
$1,351 MM
136 drilling opportunities and 125 recompletions identified
200,000 net acres
6
Company Information
• Bermuda based corporation
• Listed on the London AIM Market
– Shares trade as EGY
– Warrants trade as EGYW
• Fiscal year ended June 30, 2006
• Filed “Form 10” for U.S. registration
– Filed October 30th, 2006
– Effective December 29th, 2006
• Dual listing in U.K. & U.S.
7
How did we get here?
8
Timing Required
• Identified angel money July 2004
• John/Steve put together business plan June
2004 - December 2004
• West Griffin, CFO, joined January 2005
• Decided on SPAC as preferred capital raise
in April 2005
• Completed $300 MM IPO October 2005
9
Funding Options Considered
• Private Equity
• Raise own Private Equity Fund
• Public Market
10
Special Purpose Acquisition
Corporation (SPAC)
• Essentially a blind trust
• Management team reputation is key
• Typical structure
– Sale a unit for $6
– Unit consists of 1 Share and 2 Warrants
exercisable at $5 for four years
– 95% of money held in trust
• Shares and Warrants trade separately
• Management gets 20% IPO shares (7.7%
fully diluted)
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Shareholder Rights
• Shareholders vote to approve the initial
acquisition
• Shareholders have right to put stock back
to company for $5.65/share if they don’t
like deal
• Ensure management does deal in the
middle of the fairway
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Why a SPAC?
• Pros
– One time raise with additional equity from
Warrants
– Public money
– Smaller shareholder base
• Cons
– Warrant Dilution
– Must complete transaction in 12 to 18 months
– Investor share restrictions (liquidity)
13
London Alternative
Investment Market (AIM)
• Less Regulations
– NOMADS
– Lawyers
• Preferred European money (30% IPO)
• Able to move proxy forward quickly
• Closed initial transaction in 45 days
• U.K. markets value true 2P reserves
14
Raising the money
• Perseverance
– 6 week road show
Toronto
Glasgow
St Paul
Edinburgh
Montreal
Portland
Chicago
London
Boston
Seattle
Denver
San
Francisco
New York
Paris
Philadelphia
Houston
Dallas
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Raising the Money
• Perseverance
• Arbitrage
Historical Acquisition Pricing vs. Blended Strip
60
$42.42
50
$/BOE
40
30
20
Blended Strip (50% oil/50% gas)
$8.18
Acquisition Cost of U.S. Reserves
10
1998
1999
2000
2001
2002
2003
2004
Source: J.S. Herold, Bloomberg
Note: Forward strip is at year-end for annual data and end of July for year-to-date data; strip is two-year strip at that time



Jul-05
Acquisitions trade at a significant discount to strip price
Hedging markets provide opportunities to secure high operating margins
Favorable environment for asset acquisitions
The margin opportunity for acquisition of reserves has improved with increased oil and gas prices
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Raising the Money
• Perseverance
• Arbitrage
• What success will be
Performance: Acquirers vs. Other Large Caps
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0
nJa
2
2
-0
r
Ap
lJu
02
t
Oc
2
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3
4
4
5
4
5
4
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t -0
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r-0 ul-0
nn
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c
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u
p
p
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a
a
a
J
J
J
A
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A
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A
J
J
J
Large Caps (APC,BR,DVN,EOG,KMG,UCL)
Acquirers (CHK,APA,XTO,NFX)
Asset Acquirers have been substantially rewarded by the market
Source: Randall & Dewey with respect to selection of Acquirers vs. Other Large Caps
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The Results
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Capitalization
• 83.9 MM Shares outstanding
– $420 MM market capitalization
• 78.6 MM Warrants outstanding
– $70.7 MM market value
– $393 MM potential equity
• $325 MM 2nd Lien
• $127 MM Revolver (as of 1Q ’07)
Energy XXI intends to refinance 2nd Lien with high yield
19
Balance Sheet
($M)
June 30, 2006
Sept 30,2006
Cash
62
8
Net Working Capital (excluding cash)
74
73
Debt
209
450
Stockholder’s Equity
353
405
Total Capitalization (based upon net debt)
500
847
Net Debt/Total Capitalization
29%
52%
Net Debt/Proved Reserve ($/BOE)
$5.98
$11.79
20
Quarterly Results
($M)
June 30, 2006
Operating Income
Net Income
Operating Cash Flow (EBITDA)
Sept 30, 2006
13,319
17,397
5,534
1,933
33,636
(1)
45,141 (1)
Net Debt/EBITDA (2)
1.09x
2.52x
EBITDA/Interest (3)
5.23x
4.61x
(1)
Operating Income plus Depreciation, Depletion and Amortization
(2)
Annualized quarterly EBITDA
(3)
Interest excludes one-time write-off of up-front fees
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SPAC Thoughts
• Right vehicle at the right time
• Eurospac preferred
• Management team with wall street
exposure essential
• Fast & Furious Year
– 5 people with $278 MM cash
– 59 people, 16 mboed, 200 M acres, 5 operated
rigs
• Management & employees incentivized to
increase shareholder value
– Collectively own 15% of outstanding shares
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Disclaimer
This presentation contains statements about future events and expectations that can be characterized as
forward-looking statements, including, in particular, statements about the Company’s plans, strategies and
prospects. The use of the words “anticipate,” “estimate,” “expect,” “may,” “project,” “believe” and similar
expressions are intended to identify forward-looking statements. Although the Company believes that the plans,
intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, they do
involve certain assumptions, risks and uncertainties, and the Company cannot assure you that those expectations
will prove to have been correct. Actual results could differ materially from those anticipated in these forwardlooking statements as a result of the factors described in this presentation. Many of these factors are beyond the
Company’s ability to control or predict. The Company cannot assure you that its future results will meet its
expectations and investors are cautioned not to place undue reliance on any forward-looking statement made by
the Company or its authorized representatives. All subsequent written and oral forward-looking statements
attributable to the Company and persons acting on its behalf are qualified in their entirety by the cautionary
statements contained in this paragraph and elsewhere in this presentation.
The Company does not have any obligation or undertaking to disseminate any updates or revisions to any
forward-looking statement contained in this presentation or the admission document to reflect any change in the
Company’s expectations about the statement or any change in events, conditions or circumstances on which the
statement is based.
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