EPL Announces Third Quarter 2012 Results

EPL Announces Third Quarter 2012 Results

          EPL Announces Completion of Shallow Water GOM Acquisition

         Increases 2012 Production Guidance and Provides 2013 Outlook

NEW ORLEANS, Nov. 1, 2012 (GLOBE NEWSWIRE) -- EPL Oil & Gas, Inc. (EPL or the
Company) (NYSE:EPL) today reported financial and operational results for the
third quarter and first nine months of 2012. EPL also announced today the
closing of the acquisition of shallow water Gulf of Mexico (GOM) shelf
properties with 38.7 million barrels of equivalent (Mmboe) of proved reserves
as of July 1, 2012, together with the closing of two related financing
transactions to fund the acquisition: issuance of $300 million of 8.25% Senior
Notes due 2018 and entry into an expanded $750 million credit facility with
$425 million of revolver capacity.

Highlights

  *First nine months 2012 EBITDAX of $190.4 million and net income of $34.7
    million ($0.88 per share) respectively (see EBITDAX reconciliation in the
    tables)
  *Third quarter 2012 oil production of 8,901 barrels (Bbls) per day
    (approximately 10,500 Bbls per day without the disruptions caused by
    Hurricane Isaac)
  *2012 operational results through third quarter end include 20 successful
    development and exploration projects for a 91% success rate
  *Transformative shallow water GOM acquisition closes: 38.7 Mmboe of proved
    reserves and PV10 of $842 million as of July 1, 2012, a 35% increase from
    EPL internal PV10 estimates at announcement (see Appendix for PV10
    discussion)
  *Funded by $300 million principal amount of 8.25% Senior Notes due 2018 and
    $205 million drawn on expanded credit facility. Substantial current
    liquidity of $220 million
  *Pro Forma proved reserves as of July 1, 2012 estimated at 76.7 Mmboe and
    estimated PV10 of $2.1 billion using SEC pricing (see Appendix for PV10
    discussion)
  *Current total company oil production estimated at 15,500 Bbls per day,
    with 2012 exit rate expected to be at or above 16,000 Bbls per day
  *2013 EBITDAX of $475 million to $525 million and free cash flow potential
    of $125 million reflected by projected 2013 EBITDAX expected to drive down
    acquisition revolver debt

Financial Results

Revenue for the third quarter and first nine months of 2012 was $86.7 million
and $284.7 million, respectively. Revenue for the first nine months of 2012
increased 16% versus prior periods, resulting from significantly higher oil
production averages and strong realized oil prices. Crude oil revenue
comprised 95% of total revenue during the first nine months of 2012,
reflecting the Company's focus on oil-weighted projects.

For the third quarter of 2012, EPL reported a net loss to common stockholders
of $2.2 million, or $0.06 per share. The net loss for the third quarter of
2012 included $22.5 million ($14.3 million, net of deferred income taxes) of
non-cash or non-recurring items, primarily non-cash unrealized loss on
derivative instruments of $22.0 million ($14.0 million, net of deferred income
taxes). Excluding the impact of these items, EPL's adjusted third quarter net
income, a non-GAAP measure, would have been net income of $12.0 million, or
$0.31 per diluted share.

For the third quarter of 2012, EBITDAX was $51.2 million and discretionary
cash flow was $48.0 million, or $1.24 per share (see reconciliation to GAAP of
EBITDAX and discretionary cash flow in the tables). Cash flow from operating
activities in the third quarter of 2012 was $54.4 million, compared with cash
flow from operating activities of $43.7 million in the same quarter a year
ago.

For the nine months ended September 30, 2012, net income was $34.7 million, or
$0.88 per diluted share. The net income for the first nine months of 2012
included $17.7 million ($11.2 million, net of deferred income taxes) of
non-cash and non-recurring items, mainly comprised of non-cash unrealized loss
on derivative instruments of $8.1 million ($5.1 million, net of deferred
income taxes) and $9.6 million of non-cash impairments and loss on abandonment
activities ($6.1 million, net of deferred income taxes). The majority of these
latter two items related to gas properties outside of the Company's focus
areas. Excluding the impact of these items, EPL's adjusted net income for the
first nine months of 2012, a non-GAAP measure, would have been net income of
$45.9 million, or $1.17 per diluted share.

For the first nine months of 2012, EBITDAX and discretionary cash flow totaled
$190.4 million and $180.3 million, respectively (see reconciliation to GAAP of
EBITDAX and discretionary cash flow in the tables). Cash flow from operating
activities in the first nine months of 2012 was $162.6 million, compared to
$105.9 million in 2011.

Gary C. Hanna, the Company's President and CEO, stated, "Our results for the
first nine months of this year reflect the continuing execution of oil-focused
development activities within our asset base, only tempered by storm effects.
Oil production without the effects of Hurricane Isaac for the third quarter
would have averaged approximately 10,500 Bbls per day, a new Company high.
With the events of this storm season behind us, fourth quarter is projected to
deliver materially higher performance from our existing assets.

"Yesterday we closed our transformative acquisition of additional shallow
water GOM properties. This has acted to take our strong asset base to
significantly higher production levels. With operations ongoing, we expect to
exit the year at or above 16,000 Bbls of oil per day, with total company
production around 22,500 bopd. Our newly acquired assets have high operating
control, ease of integration, and numerous infield exploitation opportunities
that augment our existing high quality inventory. As we look forward into next
year and beyond, our outlook for the organic growth potential of our portfolio
is strong."

Production and Price Realizations

Oil production for the third quarter of 2012 averaged 8,901 Bbls per day,
which was above the upper end of the Company's revised third quarter guidance
range. The production for the quarter was disrupted by Hurricane Isaac. EPL
was shut in during the storm and experienced minimal property damage.
Following the storm, EPL waited on various third party processing facilities
to be operational to allow production to be restored. Without this storm
impact, the production for the quarter would have totaled approximately 10,500
Bbls per day. Oil production for the quarter was comprised of 95% crude oil
production and 5% natural gas liquids.

Natural gas production averaged 11.6 million cubic feet (Mmcf) per day, which
was above the Company's third quarter guidance range. Without the impact of
Hurricane Isaac, the production for the quarter would have totaled
approximately 13 Mmcf per day. Natural gas production was down from third
quarter 2011, as the Company has continued its focus on oil development
opportunities which have higher revenue generation capability.

Price realizations, all of which are stated before the impact of derivative
instruments, averaged $105.35 per barrel for crude oil and $3.00 per thousand
cubic feet (Mcf) of natural gas in the third quarter of 2012, compared to
$107.99 per barrel of crude oil and $4.21 per Mcf of natural gas in the same
quarter a year ago. The Company's crude oil is advantaged by receiving Heavy
Louisiana Sweet and Light Louisiana Sweet crude oil basis differentials.

Oil production for the first nine months of 2012 averaged 9,350 Bbls per day,
comprised of 95% crude oil production and 5% natural gas liquids. Natural gas
production averaged 14.4 Mmcf per day. Price realizations, all of which are
stated before the impact of derivative instruments, averaged $110.25 per
barrel for crude oil and $2.55 per Mcf of natural gas in the first nine months
of 2012, compared to $108.51 per barrel of crude oil and $4.35 per Mcf of
natural gas in the same period a year ago.

Operating Expenses

Lease operating expenses (LOE) for the third quarter of 2012 totaled $25.0
million, while general and administrative (G&A) expenses were $6.0 million.
Reported LOE included $3.0 million associated with expenses due to Hurricane
Isaac. G&A expenses included non-cash stock based compensation recorded in the
third quarter of 2012 of $1.2 million.

LOE for the first nine months of 2012 totaled $62.1 million, while G&A
expenses were $17.0 million for the same period. Reported G&A expenses for the
first nine months of 2012 include non-cash stock based compensation of $3.5
million.

Capital Expenditures and Operations Update

Development and Exploration Activities

During the first nine months of 2012, capital expenditures on exploration and
development activities totaled approximately $153.6 million, including $10.7
million of seismic purchases. 2012 operational results include 20 successful
development and exploration projects for a 91% success rate. Major rig
operations are ongoing, mainly executing additional development work, as well
as opportunities within the Company's infield exploration drilling program.
The Company will have at least three rigs executing operations for the
majority of the quarter within its existing core field areas outside of the
newly acquired Hilcorp assets. For full year 2012, EPL expects to spend
approximately $226 million on its development and exploration activities. EPL
has expanded its previously announced $217 million budget to include newly
presented well opportunities in the non-operated areas of South Pass 49 and
the Main Pass area, which are currently being executed by the operators of
these properties, Energy XXI and Apache Corporation, respectively.

Hanna continued, "We remain encouraged by the performance of our asset base
and our ability to drive organic production and reserve growth through our
acquire and exploit strategy. Our high success rate since 2009 is indicative
of the low-risk nature of our infield development and exploration program. Our
technical teams have quickly moved to unlock the upside potential of our
expanded drilling portfolio targeting oil reserves and their efforts are
continuing to bear fruit. Based on our 91% success rate to date this year,
internal projections show that we have organically replaced our production
withdrawals, with additional high impact projects to be executed before
year-end."

Lease Sale Results

As previously announced, EPL was the high bidder on six leases at the Central
Gulf of Mexico Lease Sale 216/222 held in June 2012 in New Orleans, Louisiana.
EPL's share of the high bids totaled $7.0 million and all leases have been
awarded to the Company. The six lease blocks cover a total of 27,148 acres on
a net and gross basis and are all located in the shallow Gulf of Mexico Shelf
within the Company's core area of operations. The six leases include three
leases within the Main Pass area, two within the West Delta area, and one
adjacent to our South Timbalier 41 field. The awarded leases are consistent
with the Company's acquisition and organic growth strategy as the leases
contain oily prospects that enhance EPL's existing portfolio and were
identified with the aid of a regional study.

P&A & Decommissioning

The Company continues to proactively spend on abandonment and decommissioning
of its idle infrastructure, which will serve to reduce future maintenance and
insurance costs. The Company spent approximately $28 million in the first nine
months of 2012 on plugging and abandonment and other decommissioning
activities. The 2012 program has plugged and abandoned 96 wells and performed
45 jacket and 4 platform removals to date. EPL plans to spend approximately $8
million more in its program before year-end and expects to have abandoned 108
wells and removed 45 jackets and 10 platforms in total for the year.

Shallow Water GOM Acquisition Closing

On October 31, 2012, EPL closed on its previously announced acquisition of
certain shallow water GOM shelf oil and natural gas interests from Hilcorp
Energy GOM Holdings, LLC (Hilcorp) for $550 million in cash (Hilcorp
Acquisition), subject to customary closing adjustments to reflect an economic
effective date of July 1, 2012.

The assets are currently producing approximately 10,000 barrels of oil
equivalent (boe) per day, about 50% of which are oil. Estimated proved
reserves as of the July 1, 2012 economic effective date as evaluated by W. D.
Von Gonten & Co. totaled approximately 38.7 million boe, of which 49% were
oil, and 59% were proved developed reserves. The properties include three
fields that Hilcorp had acquired from Chevron Corporation in Ship Shoal Block
208, South Pass 78 and South Marsh Island 239, which are all on the Central
GOM shelf in the vicinity of EPL's existing core field areas. These three
fields account for 73% of the current proved reserves and 91% of the total
proved PV10 value estimated at $842 million using SEC prices as of July 1,
2012 (see discussion of PV10 in appendix). The acquisition purchase price of
$550 million is 65% of the $842 million PV10 value. The currently estimated
asset retirement obligation to be assumed by EPL in the acquisition is
expected to total approximately $129 million.

Pro forma for the Hilcorp Acquisition, estimated proved reserves approximately
double to 76.7 Mmboe with a combined PV10 of $2.1 billion using SEC pricing as
of July 1, 2012. This pro forma estimate is based on the W. D. Von Gonten &
Co. report for the Hilcorp properties and the Company's internal roll-forward
estimate of its pre-acquisition reserves to July 1, 2012. (See discussion of
PV10 in Appendix). Of these pro forma proved reserves, 60% were oil and 74%
were proved developed reserves. Pro forma for the acquisition, EPL's leasehold
acreage as of July 1, 2012 also expands significantly from 181,601 to 330,967
net acres, with shallow and deep potential existing throughout the diversified
asset base.

Hanna commented, "This is the fourth acquisition we have made since 2011, and
it is the most transformational. This accretive acquisition provides scale and
diversification while continuing to focus the value of our Company in the
Central gulf, which is the most prolific, oil bearing region of the GOM. These
underdeveloped, legacy Chevron assets allow us to leverage our proven
strengths as an efficient exploiter of shallow water shelf fields. It provides
us with high operating control, expanded access to infrastructure, and
extensive acreage with significant exploitation potential.

"The operational integration of these assets is under way, with strategic
plans in place to reduce operating costs and optimize production. Meanwhile,
we are taking the necessary technical step to reprocess the 3-D seismic in
these underworked areas. In short order, this technical effort is expected to
result in new executable drilling opportunities with substantial upside that
will enhance the already robust identified inventory. Looking forward, we have
expanded the budget for 2013 to $300 million to include lower risk infield
development and exploration drilling opportunities from our expanded prospect
inventory. As we have demonstrated with our three prior acquisitions, we will
prudently work to unlock the significant exploitation and exploration
potential of this underdeveloped asset base."

Liquidity and Capital Resources

As of September 30, 2012, the Company had unrestricted cash on hand of $7.3
million after $55 million of available cash was used to fund the deposit
required by the purchase and sale agreement of the previously announced
Hilcorp Acquisition. In addition to using cash on hand, on October 31, 2012,
EPL closed on the Hilcorp Acquisition using the net proceeds from the sale of
$300 million in aggregate principal amount of 8.25% senior notes due 2018
(Senior Notes) and borrowings of $205 million under an expanded senior credit
facility.

The Offering

On October 31, 2012, the Company received the proceeds from its previously
announced offering of $300 million of Senior Notes. After deducting the
initial purchasers' discount and estimated offering expenses, the Company
realized net proceeds of approximately $288.4 million to fund a portion of the
Hilcorp Acquisition. The notes issued are fully and unconditionally
guaranteed, jointly and severally, on an unsecured, senior basis, by each of
EPL's existing material direct and indirect subsidiaries. The Senior Notes
bear interest from August 15, 2012 at an annual rate of 8.25% with interest
due semi-annually, in arrears on February 15^th and August 15^th of each year
commencing on February 15, 2013. The notes mature on February 15, 2018.

The notes were offered in a private placement only to qualified institutional
buyers under Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), or to persons outside of the United States in compliance
with Regulation S under the Securities Act. The notes have not been registered
under the Securities Act or applicable state securities laws, and may not be
offered or sold in the United States without registration or an applicable
exemption from the registration requirements of the Securities Act.

This news release does not constitute an offer to sell or solicitation of an
offer to buy any security, nor will there be any sale of such security in any
jurisdiction in which such offer, sale or solicitation would be unlawful prior
to registration or qualification under the securities laws of any such
jurisdiction.

Expanded Senior Credit Facility

Concurrently with the closing of the Hilcorp Acquisition, EPL also entered
into an expanded $750 million revolving credit facility with a syndicate of
lenders. The new revolving credit facility has a four-year term with an
initial borrowing base of $425 million and is secured by substantially all of
the Company's producing properties. In October 2012, EPL borrowed $205 million
under the Senior Credit Facility to fund a portion of the purchase price and
related expenses of the Hilcorp Acquisition. The Company has substantial
liquidity following the closing of the Hilcorp Acquisition of $220 million.

Borrowings under the credit facility will bear interest ranging from a base
rate plus a margin of 0.75% to 1.75% on base rate borrowings and LIBOR plus a
margin of 1.75% to 2.75% on LIBOR borrowings. The new facility expands the
Company's prior revolving credit agreement, which had a $200 million borrowing
base at the time it was amended. BMO Capital Markets acted as lead arranger
for the new facility, and Bank of Montreal is the administrative agent.

Hanna commented, "Post transaction, our liquidity is strong and our debt
levels will reduce substantially through generation of free cash flow which we
plan to use to pay off borrowings under our credit facility. Using our $300
million capital spend for 2013, our projections show, with prevailing prices
and our significant hedging, we should generate 2013 EBITDAX in the range of
$475 to $525 million. By the end of 2013, we expect to generate $125 million
of free cash flow which could reduce our revolver borrowings and within 18
months we should have the revolver completely repaid. This debt repayment plan
should return debt levels to 1.2x debt to EBITDAX by end of year 2013, which
is close to our targeted range of 1.0x."

Hedging Update

The Company has continued to layer in additional downside protection in the
form of swaps and collars for 2013 to protect its cash flow. In addition to
its significant 2013 oil hedge position on its existing assets, the Company is
in the process of hedging 80% of the forecasted production for the Hilcorp
Acquisition through 2015, with all hedges complete for 2013.

For full year 2013, EPL has a total of 8,107 Bbls of oil per day hedged, the
majority of which is hedged using Brent swaps at a fixed price averaging
$106.10 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. Hedges for 2014 are underway, with a total of 1,247 Bbls of oil
per day hedged using Brent swaps at a fixed price averaging $100.22 per Bbl
and 5,000 Mcf of natural gas per day hedged using swaps at a fixed price
averaging $4.01 per Bbl.

Share Repurchase Program

In August 2011, the Board of Directors authorized a program for the repurchase
of EPL's outstanding common stock for up to an aggregate cash purchase price
of $20.0 million and increased the program to $40.0 million in May 2012. Under
the program, the Company has repurchased 1,465,300 shares at an aggregate cash
purchase price of approximately $20.1 million, including 446,300 shares
purchased for approximately $7.3 million during 2012. Such shares are held in
treasury and could be used to provide available shares for possible resale in
future public or private offerings and our employee benefit plans. The
repurchases have been, and will be, carried out in accordance with certain
volume, timing and price constraints imposed by the SEC's rules applicable to
such transactions. The amount, timing and price of purchases otherwise depend
on market conditions and other factors. The Company has not repurchased any
shares under this program since August 2012.

Fourth Quarter and Full Year 2012 Guidance

The guidance below includes the effects of the Hilcorp Acquisition which
closed on October 31, 2012, with the accounting for the combined Company, to
begin November 1, 2012.

                                                              
ESTIMATED 2012 EBITDAX RANGE: $275                               
million to $285 million
ESTIMATED PRODUCTION & SWAP HEDGE                               
VOLUMES
Net Production (per day)  4Q 2012              Full Year 2012      2012 Exit
                                                                     Rate
Oil, including NGLs       13,000  - 14,000  10,250  - 10,500  16,000
(Bbls)
Natural gas (Mcf)         23,000  - 27,000  16,500  -  17,500  39,000
Boe                       16,833  - 18,500  13,000  - 13,500  22,500
% Oil, including NGLs
(using midpoint of        76%                   78%                  71%
guidance)
                                                              
Swap Contracted Oil                                            
Volume
Oil (barrels)             5,390                 4,134                
% of Oil swap contracted  41%      - 39%      40%      - 39%      
% of Boe swap contracted  32%      - 29%      32%      - 31%      
Average Swap Price Level  $107.10               $103.11              
                                                              
ESTIMATED EXPENSES (in Millions,                                 
unless otherwise noted)
Lease Operating
(including energy         $31.0  - $33.0  $92.0  -  $95.0  
insurance)
General & Administrative  $6.2   - $6.7   $23.0  - $23.5  
(cash and non-cash)
Taxes, other than on      3%       - 5%       3%       - 5%       
earnings (% of revenue)
Exploration Expense,      $3     - $6     $21    - $24    
including seismic costs
DD&A ($/Boe)              $ 22.00 - $25.00 $22.00 - $ 25.00 
Interest Expense
(including amortization   $12.5  - $13.0  $27.5  - $28.0  
of discount and deferred
financing costs)
                                                              

Preliminary 2013 Outlook                                             
                                                                    
ESTIMATED 2013 EBITDAX RANGE: $475 million to $525                    
million
ESTIMATED PRODUCTION                                                 
                                                                    
Net Production (per day)                        Full Year 2013
Oil, including NGLs (Bbls)                      17,500 -            18,500
Natural gas (Mcf)                               24,000 -            30,000
Boe                                             21,500 -            23,500
% Oil, including NGLs (using midpoint of        80%
guidance)
                                                                    
ESTIMATED MAJOR EXPENSES                                             
Loe ($Mm)                                       150    -            160
G&A ($Mm)                                       25     -            27
Cash Interest ($Mm)                             46     -            48
CAPITAL BUDGET                                         $300 Million 
P&A BUDGET                                             $30 Million  
ESTIMATED FREE CASH FLOW (midpt of estimates)          $125 Million 

Conference Call Information

EPL has scheduled a conference call with a slide presentation for today,
November 1, 2012 at 9:30 A.M. Central Time/10:30 A.M. Eastern Time, to review
results for the third quarter of 2012.To participate in the EPL conference
call, callers in the United States and Canada can dial (866) 845-8624 and
international callers can dial (706) 634-0487. The Conference I.D. for callers
is 53361672.

The call will be available for replay beginning two hours after the call is
completed through midnight of November 15, 2012. For callers in the United
States and Canada, the toll-free number for the replay is (855) 859-2056. For
international callers, the number is (404) 537-3406. The Conference I.D. for
all callers to access the replay is 53361672.

The conference call and slide presentation will be accessible live for
on-demand listening at the Company's web site, www.eplweb.com. Listeners may
access the call and presentation through the "Events & Webcasts" link in the
Investor Relations section of the site. The Company has also posted the
presentation materials that will accompany the conference call through the
Company's website at www.eplweb.com on the homepage under "Latest
Presentations", as well as in the Investor Relations section under "Latest
Presentations".

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.

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: 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/)

Appendix

PV-10 Definition and Discussion

PV-10 may be considered a non-GAAP financial measure as defined by the SEC. We
believe that the presentation of PV-10 is relevant and useful to our investors
as supplemental disclosure to the standardized measure, or after-tax amount,
because it presents the discounted future net cash flows attributable to our
proved reserves before taking into account future corporate income taxes and
our current tax structure. Because the standardized measure is dependent on
the unique tax situation of each company, our calculation may not be
comparable to those of our competitors. Because of this, PV-10 can be used
within the industry and by creditors and securities analysts to evaluate
estimated net cash flows from proved reserves on a more comparable basis.


EPL OIL & GAS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited)
                        Three Months Ended         Nine Months Ended
                        September 30,              September 30,
                        2012          2011         2012          2011
Revenue:                                                       
Oil and natural gas      $ 86,645     $ 84,853    $ 284,666    $ 244,866
Other                    23           31          68           97
                        86,668       84,884      284,734      244,963
                                                              
Costs and expenses:                                            
Lease operating          24,995       19,266      62,067       52,505
Transportation           160          119         410          490
Exploration expenditures 966          973         17,862       2,343
and dry hole costs
Impairments              498          5,523       6,206        19,197
Depreciation, depletion  27,106       26,496      78,932       73,081
and amortization
Accretion of liability
for asset retirement     3,472        4,793       10,031       12,172
obligations
General and              5,995        4,461       16,993       14,544
administrative
Taxes, other than on     3,189        3,493       9,834        10,506
earnings
Other                    998          4,108       4,616        6,140
Total costs and expenses 67,379       69,232      206,951      190,978
                                                              
Income from operations   19,289       15,652      77,783       53,985
Other income (expense):                                        
Interest income          40           37          128          64
Interest expense         (5,114)      (5,036)     (15,081)     (12,480)
Gain (loss) on           (22,108)     26,571      (11,865)     14,877
derivative instruments
Loss on early            -            -           -            (2,377)
extinguishment of debt
                        (27,182)     21,572      (26,818)     84
                                                              
Income (loss) before     (7,893)      37,224      50,965       54,069
income taxes
Income tax benefit                                             
(expense):
Current                  126          -           (174)        -
Deferred                 5,520        (13,766)    (16,134)     (20,117)
Total income tax benefit 5,646        (13,766)    (16,308)     (20,117)
(expense)
                                                              
Net income (loss)        $ (2,247)    $ 23,458    $ 34,657     $ 33,952
                                                              
Net income (loss), as    $ (2,247)    $ 23,458    $ 34,657     $ 33,952
reported
Add back:                                                      
Unrealized loss (gain)
due to the change in     22,010       (28,059)    8,052        (31,122)
fair market value of
derivative contracts
Impairments              498          5,523       6,206        19,197
Loss on early            -            -           -            2,377
extinguishment of debt
Loss on abandonment      4            2,880       3,405        4,611
activities
Deduct:                                                        
Income tax adjustment    (8,239)      7,273       (6,465)      1,837
for above items
                                                              
Adjusted Non-GAAP net    $ 12,026     $ 11,075    $ 45,855     $ 30,852
income
                                                              
EBITDAX Reconciliation:                                        
Net income (loss), as    $ (2,247)    $ 23,458    $ 34,657     $ 33,952
reported
Add back:                                                      
Income taxes             (5,646)      13,766      16,308       20,117
Net interest expense     5,074        4,999       14,953       12,416
Depreciation, depletion,
amortization and         30,578       31,289      88,963       85,253
accretion
Impairments              498          5,523       6,206        19,197
Loss on extinguishment   -            -           -            2,377
of debt
Exploration expenditures 966          973         17,862       2,343
and dry hole costs
Loss on abandonment      4            2,880       3,405        4,611
activities
Less impact of:                                                
Unrealized (gain) loss
due to the change in     22,010       (28,059)    8,052        (31,122)
fair market value of
derivative contracts
                                                              
EBITDAX                  $ 51,237     $ 54,829    $ 190,406    $ 149,144
                                                              
Weighted average
dilutive common shares   38,743       40,153      39,056       40,172
outstanding
                                                              
EBITDAX is defined as net income (loss) before income taxes, net interest
expense, depreciation, depletion, amortization and accretion, impairments,
loss on extinguishment of debt, exploration expenditures and dry hole costs,
loss on abandonment activities and cumulative effect of change in accounting
principle, and further deducts the unrealized gain or loss on our derivative
contracts. We have reported EBITDAX because we believe EBITDAX is a measure
commonly reported and widely used in our industry as an indicator of a
company's ability to internally fund exploration and development activities
and incur and service debt.EBITDAX is not a calculation based on generally
accepted accounting principles (GAAP) in the United States and should not be
considered in isolation from or as a substitute for net income, as an
indication of operating performance or cash flows from operating activities or
as a measure of liquidity.Investors should carefully consider the specific
items included in our computation of EBITDAX.Investors should be cautioned
that EBITDAX as reported by us may not be comparable in all instances to
EBITDAX as reported by other companies.In addition, EBITDAX does not
represent funds available for discretionary use.
                                                              

                                                                
EPL OIL & GAS, INC.
CONSOLIDATED STATEMENTS OF NET CASH PROVIDED BY
OPERATING ACTIVITIES
(In thousands)
(Unaudited)
                                                                
                         Three Months Ended            Nine Months Ended
                         September 30,                 September 30,
                         2012            2011          2012        2011
Cash flows from operating                                        
activities:
Net income (loss)         $ (2,247)      23,458       34,657     33,952
Adjustments to reconcile net income (loss) to net cash             
provided by operating activities:
Depreciation, depletion   27,106         26,496       78,932     73,081
and amortization
Accretion of liability
for asset retirement      3,472          4,793        10,031     12,172
obligations
Unrealized loss (gain) on 22,010         (28,059)     8,052      (31,122)
derivative contracts
Non-cash compensation     1,175          557          3,493      1,833
Deferred income taxes     (5,520)        13,766       16,134     20,117
Exploration expenditures  (76)           16           4,097      147
Impairments               498            5,523        6,206      19,197
Amortization of deferred
financing costs and       512            463          1,516      1,152
discount on debt
Loss on early             -             -           -         2,377
extinguishment of debt
Other                     4              2,880        3,405      4,611
Changes in operating                                             
assets and liabilities:
Trade accounts receivable 4,270          3,093        5,171      (6,430)
Other receivables         -             -           -         1,283
Prepaid expenses          2,242          (393)        4,062      (5,207)
Other assets              440            (849)        362        (862)
Accounts payable and      8,852          569          14,149     5,563
accrued expenses
Other liabilities         (8,301)        (8,567)      (27,647)   (25,929)
                                                                
Net cash provided by      $54,437       43,746       162,620    105,935
operating activities
                                                                
Reconciliation of                                                
discretionary cash flow:
Net cash provided by      54,437         43,746       162,620    105,935
operating activities
Changes in working        (7,503)        6,147        3,903      31,582
capital
Non-cash exploration
expenditures and          (422)          (5,539)      (10,303)   (19,344)
impairments
Total exploration
expenditures, dry hole    1,464          6,496        24,068     21,540
costs and impairments
Discretionary cash flow   $ 47,976       50,850       180,288    139,713
                                                                
The table above reconciles discretionary cash flow to net cash provided by or
used in operating activities. Discretionary cash flow is defined as cash flow
from operations before changes in working capital and exploration
expenditures. Discretionary cash flow is widely accepted as a financial
indicator of an oil and natural gas company's ability to generate cash which
is used to internally fund exploration and development activities, pay
dividends and service debt. Discretionary cash flow is presented based on
management's belief that this non-GAAP financial measure is useful information
to investors because it is widely used by professional research analysts in
the valuation, comparison, rating and investment recommendations of companies
within the oil and natural gas exploration and production industry. Many
investors use the published research of these analysts in making their
investment decisions. Discretionary cash flow is not a measure of financial
performance under GAAP and should not be considered as an alternative to cash
flows from operating activities, as defined by GAAP, or as a measure of
liquidity, or an alternative to net income. Investors should be cautioned that
discretionary cash flow as reported by the Company may not be comparable in
all instances to discretionary cash flow as reported by other companies.
                                                                

                                                               
EPL OIL & GAS, INC.
SELECTED PRODUCTION, PRICING AND OPERATIONAL STATISTICS
(Unaudited)
                                                               
                                                               
                            Three Months Ended        Nine Months Ended
                            September 30,             September30,
                            2012           2011       2012        2011
                                                               
PRODUCTION AND PRICING                                          
Net Production (per day):                                       
Crude Oil (Bbls)             8,466         7,753     8,923      7,377
Natural gas liquids (Bbls)   435           281       427        257
Oil (Bbls)                   8,901         8,034     9,350      7,634
Natural gas (Mcf)            11,558        16,358    14,378     18,888
Total (Boe)                  10,827        10,760    11,746     10,782
Average Sales Prices:                                           
Crude Oil (Bbls)             $ 105.35      107.99    110.25     108.51
Natural gas liquids (Bbls)   35.03         57.83     43.27      55.26
Oil (Bbls)                   101.91        106.23    107.19     106.71
Natural gas (per Mcf)        3.00          4.21      2.55       4.35
Average (per Boe)            86.98         85.72     88.44      83.19
Oil and Natural Gas Revenues                                    
(in thousands):
Crude Oil                    $82,051      77,023    269,568    218,525
Natural gas liquids          1,402         1,495     5,061      3,885
Oil                          83,453        78,518    274,629    222,410
Natural gas                  3,192         6,335     10,037     22,456
Total                        86,645        84,853    284,666    244,866
                                                               
Impact of derivatives
settled during the period                                       
(1):
Oil (per Bbl)                $ (0.11)     (2.01)    (1.49)     (7.79)
Natural gas (per Mcf)        (0.01)        -        -         -
                                                               
OPERATIONAL STATISTICS                                          
Average Costs (per Boe):                                        
Lease operating expense      $ 25.09      19.46     19.28      17.84
Depreciation, depletion and  27.21         26.76     24.52      24.83
amortization
Accretion expense            3.49          4.84      3.12       4.14
Taxes, other than on         3.20          3.53      3.06       3.57
earnings
General and administrative   6.02          4.51      5.28       4.94
                                                               
(1) The derivative amounts represent the realized portion of gains or losses
on derivative contracts settled during the period which are included in Other
income (expense) in the consolidated statements of operations.
                                                               

                                                                
EPL OIL & GAS, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
                                                   September 30, December 31,
                                                   2012          2011
                                                                
ASSETS                                                           
Current assets:                                                  
Cash and cash equivalents                           $ 7,319      $ 80,128
Trade accounts receivable - net                     29,273       31,817
Fair value of commodity derivative instruments      2,792        587
Prepaid expenses                                    6,984        11,046
Total current assets                                46,368       123,578
                                                                
Property and equipment                              1,264,820    1,082,248
Less accumulated depreciation, depletion,           (390,545)    (305,110)
amortization and impairments
Net property and equipment                          874,275      777,138
                                                                
Deposit for Hilcorp Acquisition                     55,000       -
Restricted cash                                     6,023        6,023
Other assets                                        3,059        3,029
Fair value of commodity derivative instruments      699          -
Deferred financing costs --- net of accumulated     4,487        5,452
amortization
                                                   $ 989,911    $ 915,220
LIABILITIES AND STOCKHOLDERS' EQUITY                             
Current liabilities:                                             
Accounts payable                                    $ 31,891     $ 25,393
Accrued expenses                                    73,425       58,538
Asset retirement obligations                        24,496       25,578
Fair value of commodity derivative instruments      9,779        1,056
Deferred tax liabilities                            332          2,823
Total current liabilities                           139,923      113,388
                                                                
Long-term debt                                      204,935      204,390
Asset retirement obligations                        70,644       73,769
Deferred tax liabilities                            50,274       31,775
Fair value of commodity derivative instruments      2,423        190
Other                                               1,156        663
                                                   469,355      424,175
Commitments and contingencies                                    
                                                                
Stockholders' equity:                                            
Preferred stock, $0.001 par value per share.
Authorized 1,000,000 shares; no shares issued and   -            -
outstanding at September 30, 2012 and December 31,
2011
Common stock, $0.001 par value per share.
Authorized 75,000,000 shares; shares issued
40,580,342 and 40,326,451 at September 30, 2012 and 40           40
December 31, 2011, respectively; shares outstanding
39,089,591 and 39,404,106 at September 30, 2012 and
December 31, 2011, respectively
Additional paid-in capital                          509,041      505,235
Treasury stock, at cost, 1,490,751 and 922,345
shares at September 30, 2012 and December 31, 2011, (20,313)     (11,361)
respectively
Retained earnings (accumulated deficit)             31,788       (2,869)
Total stockholders' equity                          520,556      491,045
                                                   $ 989,911    $ 915,220

CONTACT: Investors/Media
        
         T.J. Thom, Chief Financial Officer
         504-799-1902
         tthom@eplweb.com

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