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Subject:  Re: Energy XXI (EXXI) Date:  4/30/2012  10:07 AM
Author:  JustMee01 Number:  10064 of 25375


Actually, the individual well information is pulled from recent presentations. Schiller gets in depth on these XOM acquisition prospects to make his point about how profitable they will be. There was some mild skepticism from analyts at first, but he's a good communicator and made his rationale clear to them. These presentations are part of that effort. Other information is from 10Ks and Qs. They're a small company, so they provide a lot more detail on individual drilling ops than larger companies ever could or would.

Yes, DJ#1 is most likely just gas. It's big, though. The DJ structure encompasses 4 lease blocks, and the single field is 200,000 square acres in area. Expectation is that it will be economic at today's prices and unlike an unconventional well, this big bugger will hopefully still be producing decades from now like some of the legacy fields EXXI operates (some were originally found in the 1950s, I believe). The nice thing about EXXI is that it's future is not completely dependent on the Ultradeep. You get the potential upside without the big risk you get in MMR. MMR's future seems much more dependent on the Ultradeep.

Virtually all of the wells have encountered hydrocarbons in multiple strata. In the process of going that deep they are often drilling through two or three seperate reservoirs. In some of the other wells, especially the Blackbeard wells, there seems to be some potential for oil. But, that's really just internet rumor-mongering and conjecture on the part of other people. I don't recall hearing management commit to the possibility of liquids. I've actually heard the opposite as Schiller has avoided the speculative question. But, BBE and Lafitte have shallower pay zones in addition to the deep reserves that could contain oil as I've understood from those rumors. (I have no basis for my own opinion; I'm not an expert and can only parrot what management provides, so I'll expect gas.) You also need to figure in the value of proving the trend, since MMR and EXXI have a total of 17 prospects in the play, with only six in progress.

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