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EPL Announces Fourth Quarter and Year-End Results for 2012



EPL Announces Fourth Quarter and Year-End Results for 2012

NEW ORLEANS, March 7, 2013 (GLOBE NEWSWIRE) -- EPL Oil & Gas, Inc. (EPL or the
Company) (NYSE:EPL) today reported financial and operational results for the
fourth quarter and full year 2012.

Highlights

  * 4Q2012 EBITDAX of $95.5 million and net income of $24.2 million ($0.61 per
    diluted share) respectively. 2012 EBITDAX of $285.9 million, slightly
    above the Company's guidance range (see EBITDAX reconciliation in the
    tables). 2012 Net income of $58.8 million ($1.50 per diluted share)
  * 4Q12 oil production rose 43% versus 4Q11 to 13,516 Barrels of oil per day
    (Bopd) in line with guidance reflecting the impact of the Hilcorp
    acquisition production only since October 31, 2012 close.
  * 2012 exit oil production estimated at 16,500 Bopd, with 1Q2013 and full
    year 2013 oil production guidance at 16,000 to 17,000 Bopd and 17,000 to
    18,500 Bopd, respectively
  * Estimated proved reserves of 77.4 Mmboe as of December 31, 2012,
    representing an annual increase of 109% mainly through acquisitions and
    organic production replacement of 187% at an average cost of $26/Boe.
  * Year-end 2012 PV-10 estimated at $2.0 billion for 1P reserves using SEC
    prices (see discussion of PV-10 in the appendix)
  * 2013 capital budget remains at $300 million, up 34% over 2012 and
    dominated by oil projects intended to drive both production and organic
    reserve growth
  * Continued focus on free cash flow and balance sheet strength: current net
    debt to projected 2013 EBITDAX estimated at 1.4x and expected to decrease
    to 1.3x post-close of the currently-pending Bay Marchand (BM) non-operated
    asset sale for $51.5 million. Post close liquidity in the form of cash
    plus undrawn revolver availability estimated at $290 million

Financial Results 

Revenue for the fourth quarter of 2012 was $138.9 million, compared to $103.4
million for the same period a year ago, driven by higher realized oil
production from the Company's focus on oil-weighted development projects. For
full year 2012, revenues increased 22% to $423.6 million versus $348.3 million
for full year 2011, due to a 29% increase in 2012 annual oil production,
offset by a 3% decrease in oil prices.

For the fourth quarter of 2012, EPL reported net income to common stockholders
of $24.2 million, or $0.61 per diluted share, compared to a net loss of $7.3
million, or $0.19 per diluted share, for the same period a year ago. The net
income for the fourth quarter of 2012 included $1.4 million of non-cash
unrealized losses on derivative instruments, $2.7 million of non-cash costs
attributable to property impairments related to gas properties offset by a
$1.0 million gain on abandonment activities. Excluding the impact of these
non-cash items, EPL's adjusted fourth quarter net income, a non-GAAP measure,
would have been $26.2 million, or $0.67 per diluted share.

For full year 2012, net income was $58.8 million, or $1.50 per diluted share,
compared to net income of $26.6 million, or $0.66 per diluted share for full
year 2011. The net income for 2012 was impacted by $9.5 million of non-cash
unrealized losses on derivative instruments offset by $8.9 million of non-cash
costs attributable to property impairments and a $2.4 million loss on
abandonment activities related mainly to gas properties. Excluding the impact
of these non-cash items, EPL's adjusted 2012 net income, a non-GAAP measure,
would have been $72.1 million, or $1.85 per diluted share.

For the fourth quarter of 2012, EBITDAX was $95.5 million and discretionary
cash flow was $84.5 million, or $2.17 per share (see reconciliation to GAAP of
EBITDAX and discretionary cash flow in the tables). Cash flow from operating
activities in the fourth quarter of 2012 was $51.3 million, a 22% decrease
compared to cash flow from operating activities for the same quarter a year
ago. 

For full year 2012, EBITDAX was $285.9 million and discretionary cash flow was
$264.8 million, or $6.78 per share (see reconciliation to GAAP of EBITDAX and
discretionary cash flow in the tables). Cash flow from operating activities in
2012 was $213.9 million, a 25% increase over cash flow from operating
activities for 2011.  

Gary C. Hanna, the Company's President and CEO, stated, "2012 was a
transformational year that delivered on all of our stated goals as we
continued our focus on implementing our acquire and exploit strategy. In just
a few short years, we have turned the corner on a host of operational
initiatives, including transforming from a gas driven company into being
oil-rich and achieving substantial growth in terms of production, reserves,
and upside opportunities.

"With the integration of the Hilcorp acquisition behind us and with
approximately 340,000 net leasehold acres on the Shelf, we are focused
squarely on the future upside potential of our expanded asset base. With our
regional expertise, we will continue to focus on operational and technical
excellence as we extract organic production and reserve growth from our high
quality acreage. With our substantial liquidity, continued free cash flow
generation and balanced acquire and exploit strategy, we also intend to
continue executing on additional prudent acquisition targets to accelerate our
growth and provide additional opportunity sets."

Production and Price Realizations

Oil production for the fourth quarter of 2012 averaged 13,516 Barrels (Bbls)
per day, which was within the Company's guidance range and a new record high
for the Company. Fourth quarter 2012 oil production volumes were 43% higher
than in the comparable quarter last year, primarily as a result of the recent
Hilcorp acquisition of oil-weighted properties that closed October 31, 2012
and the continued focus on oil-weighted projects. 2012 exit oil production for
the combined asset base was estimated at 16,500 Bbls per day.

Natural gas production averaged 28.2 million cubic feet (Mmcf) per day in the
fourth quarter of 2012, which was slightly above the Company's guidance
range. EPL has continued its focus on oil development opportunities which have
higher revenue generation capability than natural gas.

Price realizations for the fourth quarter of 2012, all of which are stated
before the impact of derivative instruments, averaged $106.07 per barrel for
crude oil and $3.40 per thousand cubic feet (Mcf) of natural gas, compared to
$116.40 per barrel of crude oil and $3.19 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 2012 averaged 10,398 Bbls per day and natural gas
production averaged 17.9 Mmcf per day. Price realizations for the full year,
all of which are stated before the impact of derivative instruments, averaged
$108.88 per barrel for crude oil and $2.89 per Mcf of natural gas, compared to
$110.82 per barrel of crude oil and $4.11 per Mcf of natural gas in 2011. 

Operating Expenses

Lease operating expenses (LOE) for the fourth quarter of 2012 totaled $32.8
million, while general and administrative (G&A) expenses were $6.2 million.
LOE for 2012 totaled $94.9 million, while G&A expenses were $23.2 million for
the same period. Reported LOE and G&A increased over the same periods a year
ago mainly due to property acquisitions concluded during the year. G&A
expenses included non-cash stock based compensation recorded in the fourth
quarter and full year 2012 of $1.2 million and $4.7 million, respectively.

Capital Expenditures and P&A Operations

For full year 2012, costs incurred for development and exploration activities
totaled approximately $212.5 million and $10.6 million on seismic purchases,
for a total expenditure of $223.1 million. During the year, the Company
completed 28 operations, including 12 successful sidetracks and drillwells and
16 successful workovers, with an overall 90% success rate. Additionally, the
Company spent $7.4 million on 6 bid leases comprising 27,148 acres in the
shallow Gulf of Mexico (GOM) shelf. 

The Company had organic reserve additions from its capital activities totaling
8.1 million barrels of oil equivalent (Mmboe) of proved reserves of which 6.4
million barrels were oil. 2012 finding and development costs associated with
these activities were approximately $26.23 per Boe on a proved reserve basis.
All of the wells were brought on line during 2012 and some more recently in
2013. Probable reserves associated with these activities and other wells
throughout EPL's entire reserve base are currently being quantified by the
Company's outside engineering firm and will be available in the coming months.

In addition, the Company spent approximately $35 million in 2012 for plugging
and abandonment and other decommissioning activities performed during the
year, which will serve to reduce future maintenance and insurance costs. In
total, since the Company began focusing its efforts to reduce its idle iron in
late 2009, the Company has plugged and abandoned 428 wells and decommissioned
157 jackets and platforms.

Year-End 2012 Proved Reserves

The Company's estimated proved reserves as of December 31, 2012 were 77.4
Mmboe (61% oil), representing an increase of 109% compared to estimated proved
reserves of 37.1 Mmboe as of December 31, 2011.  At year-end 2012, 58.0 Mmboe
(or 75%) of these proved reserves were proved developed reserves, 65% of which
were oil. Estimated proved undeveloped reserves (PUDs) at year-end 2012 were
19.4 Mmboe, 49% of which were oil. 

The net increase in total estimated proved reserves was the result of
increases from acquisitions of 35.7 Mmboe, organic reserve additions from
extensions and discoveries of 8.1 Mmboe, positive revisions of 1.8 Mmboe,
offset by 5.3 Mmboe of net production.  Organic additions and revisions
replaced 187% of 2012 net production (see the Supplemental Oil & Gas
Disclosure table for details).

The present value of the future net cash flows before income taxes of the
Company's estimated proved oil and natural gas reserves at the end of 2012
using a discount rate of 10% (PV-10) was approximately $2.0 billion as
calculated consistent with SEC guidelines and pricing. All development, P&A
and decommissioning costs are included in the calculation of PV-10. (PV-10 is
a non-GAAP measure; see table below and discussion of PV-10 in the appendix.)

All of the Company's proved reserve figures are based upon third party
engineering estimates prepared by Netherland, Sewell & Associates, Inc. and
W.D. Von Gonten & Co.

1P RESERVES AND PV-10 VALUES
                                                                            
Reserve Category      Oil (Mmbo)    Gas (Bcf)    Mmboe   PV10 YE            
                                                         ($Billion)^(1)
Proved Developed      37.9          120.7        58.0    1.5                
Proved Undeveloped    9.5           59.3         19.4    0.5                
Proved (1P)           47.4          179.9        77.4    2.0                
                                                                            
(1) The present value of the future net cash flows before income taxes of the
Company's estimated proved oil and natural gas reserves at the end of 2012
using a discount rate of 10% (PV-10) as calculated consistent with SEC
guidelines and 2012 pricing of $105.13 per barrel of oil and $2.92 per Mcf of
natural gas.

Acreage

At year-end 2012, EPL's gross developed leasehold acreage totaled 343,366
acres and gross acreage totaled 528,532 acres. Net developed leasehold acreage
and total net leasehold acreage were 243,972 and 367,880 acres,
respectively. Ninety-four percent of the combined undeveloped and developed
net leasehold acreage is located on the GOM shelf, and the remaining 6% is
primarily undeveloped deepwater GOM acreage. 

Liquidity and Capital Resources

As of December 31, 2012, the Company had unrestricted cash on hand of $1.5
million and restricted cash of $6.0 million. On October 31, 2012, in
connection with the closing of the Hilcorp Acquisition, EPL's senior credit
facility was amended and restated, expanding the facility from $250 million to
$750 million and increasing the borrowing base from $200 million to $425
million. The Hilcorp Acquisition was financed with cash on hand, the net
proceeds from the sale of $300 million in aggregate principal amount of the
8.25% senior notes due 2018 and borrowings of $205 million under the senior
credit facility. As of February 28, 2013, EPL had reduced its borrowing under
the senior credit facility to $185.0 million outstanding and had substantial
liquidity of $240.0 million available under the facility. Based on its total
current debt level, EPL's leverage is at 1.4x debt to projected 2013 EBITDAX
using the midpoint of guidance (see the guidance section contained in this
press release and the discussion of EBITDAX in the tables). 

As recently announced, EPL has executed a purchase and sale agreement to sell
certain shallow water GOM shelf oil and natural gas interests located within
the non-operated BM field area to the well-established property operator for
$51.5 million in cash and the buyer's assumption of liabilities currently
recorded on EPL's balance sheet of $10.8 million resulting in total
consideration of $62.3 million, subject to customary adjustments to reflect
the January 1, 2013 economic effective date. The assets are currently
producing approximately 400 Boe per day, about 97% of which are oil. Estimated
proved reserves as of the January 1, 2013 economic effective date totaled
approximately 1.6 million Boe, 90% of which are oil. The total proved
divestiture PV-10 value is estimated at $53 million using the estimated proved
reserves and strip pricing as of year-end 2012 (see discussion of PV-10 in the
appendix). From time to time, EPL may decide to divest of certain assets that
do not meet its capital expenditure risk, rate of return, operational control
or other criteria in an effort to high-grade its overall portfolio of assets.

As also previously reported, EPL's lenders have confirmed that, following the
sale, EPL's borrowing base under its senior secured credit facility will be
unchanged at $425 million. EPL projects liquidity, in the form of cash plus
undrawn revolver availability, following the expected close by April 1, 2013
of approximately $290 million. 2013 EBITDAX is still expected to range between
$475 million to $525 million. Post close of the BM sale, EPL's leverage is
expected to be at 1.3x debt to projected 2013 EBITDAX using the midpoint of
the guidance. (See the guidance section contained in this press release and
the discussion of EBITDAX in the tables). 

2013 Capital Budget and Current Operations

The Company currently plans to spend approximately $300 million on
oil-dominated development and exploration activities in 2013. Development and
infield exploration spending is budgeted primarily in the West Delta, East
Bay, South Timbalier, and Ship Shoal core field areas. Capital spending is
expected to be level throughout the year, intended to drive production growth
and organic reserve replacement. The Company has continued its active drilling
program from fourth quarter last year, with four rigs currently working within
its core field areas. The Company plans to have up to 7 rigs running
throughout the year, including barge, platform and jack-up rigs necessary to
execute its capital program. In addition, the Company plans to spend
approximately $30 million in 2013 on plugging and abandonment and other
decommissioning activities.

Hedging Update

The Company has layered in additional downside protection in the form of swaps
and collars for 2013 and 2014 to protect its cash flow. For full year 2013,
EPL has a total of 11,157 Bbls of oil per day hedged, the majority of which is
hedged using Brent swaps at a fixed price averaging $106.01 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. For full year
2014, EPL has a total of 8,715 Bbls of oil per day hedged, all of which is
hedged using Brent swaps at a fixed price averaging $101.13 per Bbl. For full
year 2014, EPL has a total of 5,000 Mcf per day of gas hedged, all of which is
hedged using swaps at a fixed price averaging $4.01 per Bbl.

First Quarter and Full Year 2013 Guidance

Note: This guidance is inclusive of the effects of the pending sale of the
non-operated BM assets, expected to close April 1, 2013.

ESTIMATED PRODUCTION & SWAP HEDGE                                      
VOLUMES
                                                                       
Net Production (per day)            1Q 2013               Full Year 2013 
Oil, including NGLs (Bbls)          16,000   -   17,000   17,000   -   18,500
Natural gas (Mcf)                   27,000   -   33,000   24,000   -   30,000
  Boe                               20,500   -   22,500   21,000   -   23,500
 % Oil, including NGLs (using      77%                   80%
midpoint of guidance)
                                                                       
Swap Contracted Volume                                                 
Oil (barrels)                      13,111                10,157
% of Oil swap contracted           82%       -  77%      60%       -  55%
% of Boe swap contracted           64%       -  58%      48%       -  43%
Average Swap Price Level           $105.13               $104.62
                                                                       
ESTIMATED EXPENSES (in Millions,                                       
unless otherwise noted)
                                                                       
Lease Operating (including energy   $ 37.5   -   $ 41.5   $ 150    -   $ 160
insurance)
General & Administrative (cash and  $ 6.5    -   $ 7.0    $ 26     -   $ 28
non-cash)
Taxes, other than on earnings (%   1%        -  3%       1%        -  3%
of revenue)
Exploration Expense                 $ 2      -   $ 4      $ 8      -   $ 16
DD&A ($/Boe)                        $ 20.00  -   $ 24.00  $ 20.00  -   $ 24.00
Interest Expense (including
amortization of discount and        $ 13.0   -   $ 14.0   $ 52     -   $ 56
deferred financing costs)

ESTIMATED EBITDAX RANGE:  $475 Million to  $525 Million (Midpoint: $500
                                                        million)
                                                                           
ESTIMATED FREE CASH FLOW: $100 Million to  $150 Million (Midpoint: $125
                                                        million)

Conference Call Information

EPL has scheduled a conference call for today, March 7, 2013, at 9:00 A.M.
Central Time/10:00 A.M. Eastern Time to review results for the fourth quarter
and full year 2012 and to discuss its outlook for 2013. 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 16228946.

The call will be available for replay beginning two hours after the call is
completed through midnight of March 21, 2013. 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 16228946.

The conference call will be webcast live as well as for on-demand listening at
the Company's web site, www.eplweb.com. Listeners may access the call through
the "Events and Webcasts" link in the Investor Relations section of the site.

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 failure of any
closing conditions in the proposed sale of the non-operated Bay Marchand
assets, which could terminate or significantly delay the transaction; 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        Year Ended
                     December 31,              December 31,
                     2012         2011         2012        2011
Revenues:                                                   
Oil and natural gas   $ 137,863    $ 103,341    $ 422,529   $ 348,207
Other                 1,036        23           1,104       120
                      138,899      103,364      423,633     348,327
                                                            
Costs and expenses:                                         
Lease operating       32,783       17,776       94,850      70,281
Transportation        205          289          615         779
Exploration
expenditures and dry  937          11,925       18,799      14,268
hole costs
Impairments           2,677        13,269       8,883       32,466
Depreciation,
depletion and         34,649       31,543       113,581     104,624
amortization
Accretion of
liability for asset   5,534        3,770        15,565      15,942
retirement
obligations
General and           6,215        4,197        23,208      18,741
administrative
Taxes, other than on  3,173        3,859        13,007      14,365
earnings
Other                 62           3,595        4,678       9,735
Total costs and       86,235       90,223       293,186     281,201
expenses
                                                            
Income from           52,664       13,141       130,447     67,126
operations
                                                            
Other income                                                
(expense):
Interest income       8            38           136         102
Interest expense      (13,487)     (5,068)      (28,568)    (17,548)
Loss on derivative    (1,440)      (20,747)     (13,305)    (5,870)
instruments
Loss on early
extinguishment of     -            -            -           (2,377)
debt
                      (14,919)     (25,777)     (41,737)    (25,693)
                                                            
Income (loss) before  37,745       (12,636)     88,710      41,433
income taxes 
Deferred income tax   (13,592)     5,295        (29,900)    (14,822)
benefit (expense)
                                                            
Net income (loss)     $ 24,153     $ (7,341)    $ 58,810    $ 26,611
                                                            
Net income (loss),    $ 24,153     $ (7,341)    $ 58,810    $ 26,611
as reported
Add back:                                                   
Unrealized loss
(gain) due to the
change in fair        1,439        19,647       9,491       (11,475)
market value of
derivative contracts
Impairments           2,677        13,269       8,883       32,466
Loss on early
extinguishment of     -            -            -           2,377
debt
Loss (gain) on
abandonment           (957)        2,373        2,448       6,984
activities
Deduct:                                                     
Income tax
adjustment for above  (1,150)      (12,986)     (7,579)     (11,321)
items
                                                            
Adjusted Non-GAAP     $ 26,162     $ 14,962     $ 72,053    $ 45,642
net income
                                                            
EBITDAX                                                     
Reconciliation:
                                                            
Net income (loss),    $ 24,153     $ (7,341)    $ 58,810    $ 26,611
as reported
Add back:                                                   
Income taxes          13,592       (5,295)      29,900      14,822
Net interest expense  13,479       5,030        28,432      17,446
Depreciation,
depletion,            40,183       35,313       129,146     120,566
amortization and
accretion
Impairments           2,677        13,269       8,883       32,466
Loss on
extinguishment of     -            -            -           2,377
debt
Exploration
expenditures and dry  937          11,925       18,799      14,268
hole costs
Loss (gain) on
abandonment           (957)        2,373        2,448       6,984
activities
Less impact of:                                             
Unrealized (gain)
loss due to the
change in fair        1,439        19,647       9,491       (11,475)
market value of
derivative contracts
                                                            
EBITDAX               $ 95,503     $ 74,921     $ 285,909   $ 224,065
                                                            
Weighted average
dilutive common       38,998       39,508       39,034      40,050
shares 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 (gain) 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         Year Ended
                          December 31,               December 31,
                          2012           2011        2012         2011
Cash flows from operating                                          
activities:
Net income (loss)          $ 24,153       (7,341)     58,810       26,611
Adjustments to reconcile net income
(loss) to net cash provided by operating                           
activities:
Depreciation, depletion    34,649         31,543      113,581      104,624
and amortization
Accretion of liability
for asset retirement       5,534          3,770       15,565       15,942
obligations
Unrealized loss (gain) on  1,439          19,647      9,491        (11,475)
derivative contracts
Non-cash compensation      1,224          676         4,717        2,509
Deferred income taxes      13,766         (5,295)     29,900       14,822
Exploration expenditures   130            11,092      4,227        11,239
Impairments                2,677          13,269      8,883        32,466
Amortization of deferred
financing costs and        1,040          505         2,556        1,657
discount on debt
Loss on early              -              -           -            2,377
extinguishment of debt
Other                      (957)          2,373       2,448        6,984
Changes in operating                                               
assets and liabilities:
Trade accounts receivable  (38,718)       (3,607)     (33,547)     (10,037)
Other receivables          -              805         -            2,088
Prepaid expenses           (3,015)        (2,416)     1,047        (7,623)
Other assets               (217)          (353)       145          (1,215)
Accounts payable and       17,328         7,087       31,477       12,650
accrued expenses
Other liabilities          (7,782)        (6,438)     (35,429)     (32,367)
                                                                   
Net cash provided by       $ 51,251       65,317      213,871      171,252
operating activities
                                                                   
Reconciliation of                                                  
discretionary cash flow:
Net cash provided by       51,251         65,317      213,871      171,252
operating activities
Changes in working         32,404         4,922       36,307       36,504
capital
Non-cash exploration
expenditures and           (2,807)        (24,361)    (13,110)     (43,705)
impairments
Total exploration
expenditures, dry hole     3,614          25,194      27,682       46,734
costs and impairments
Discretionary cash flow    $ 84,462       $ 71,072    $ 264,750    $ 210,785
                                                                   
                                                                   
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         Year Ended
                            December 31,               December 31, 
                            2012           2011        2012        2011
                                                                    
PRODUCTION AND PRICING                                              
Net Production (per day):                                           
Crude Oil (Bbls)             13,057         9,041       9,963       7,796
Natural gas liquids (Bbls)   459            399         435         293
Oil (Bbls)                   13,516         9,440       10,398      8,089
Natural gas (Mcf)            28,198         15,239      17,852      17,968
Total (Boe)                  18,216         11,980      13,373      11,084
Average Sales Prices:                                               
Crude Oil (Bbls)             $ 106.07       116.40      108.88      110.82
Natural gas liquids (Bbls)   38.21          55.68       41.93       55.40
Oil (Bbls)                   103.77         113.84      106.08      108.81
Natural gas (per Mcf)        3.40           3.19        2.89        4.11
Average (per Boe)            82.27          93.76       86.33       86.07
Oil and Natural Gas                                                 
Revenues (in thousands):
Crude Oil                    $ 127,422      96,823      396,989     315,347
Natural gas liquids          1,613          2,043       6,674       5,928
Oil                          129,035        98,866      403,663     321,275
Natural gas                  8,828          4,476       18,866      26,932
Total                        137,863        103,342     422,529     348,207
                                                                    
Impact of derivatives
settled during the period                                           
(1):
Oil (per Bbl)                $ 0.37         (1.27)      (0.88)      (5.87)
Natural gas (per Mcf)        (0.18)         --          (0.07)      -- 
                                                                    
OPERATIONAL STATISTICS                                              
Average Costs (per Boe):                                            
Lease operating expense      $ 19.56        16.13       19.38       17.37
Depreciation, depletion and  20.68          28.62       23.21       25.86
amortization
Accretion expense            3.30           3.42        3.18        3.94
Taxes, other than on         1.89           3.50        2.66        3.55
earnings
General and administrative   3.71           3.81        4.74        4.63
                                                                    
(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)
                                                                     
                                                       December 31,
                                                       2012         2011
                                                                     
ASSETS                                                               
Current assets:                                                      
Cash and cash equivalents                               $ 1,521      $ 80,128
Trade accounts receivable - net                         67,991       31,817
Fair value of commodity derivative instruments          3,302        587
Deferred tax asset                                      3,322        -
Prepaid expenses                                        9,873        11,046
Total current assets                                    86,009       123,578
                                                                     
Property and equipment                                  2,025,647    1,082,248
Less accumulated depreciation, depletion and            (427,580)    (305,110)
amortization
Net property and equipment                              1,598,067    777,138
                                                                     
Restricted cash                                         6,023        6,023
Fair value of commodity derivative instruments          211          -
Deferred financing costs --- net of accumulated         12,386       5,452
amortization
Other assets                                            2,931        3,029
                                                        $ 1,705,627  $ 915,220
                                                                     
LIABILITIES AND STOCKHOLDERS' EQUITY                                 
Current liabilities:                                                 
Accounts payable                                        $ 34,772     $ 25,393
Accrued expenses                                        117,372      58,538
Asset retirement obligations                            30,179       25,578
Fair value of commodity derivative instruments          10,026       1,056
Deferred tax liabilities                                -            2,823
Total current liabilities                               192,349      113,388
                                                                     
Long-term debt                                          689,911      204,390
Asset retirement obligations                            204,931      73,769
Deferred tax liabilities                                67,694       31,775
Fair value of commodity derivative instruments          3,637        190
Other                                                   1,132        663
                                                        1,159,654    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 December 31, 2012 and 2011
Common stock, $0.001 par value per share. Authorized
75,000,000 shares; shares issued 40,601,887 and
40,326,451 at December 31, 2012 and 2011,               40           40
respectively; shares outstanding 39,103,203 and
39,404,106 at December 31, 2012 and 2011, respectively
Additional paid-in capital                              510,469      505,235
Treasury stock, at cost, 1,498,684 and 922,345 shares   (20,477)     (11,361)
at December 31, 2012 and 2011, respectively
Retained earnings (accumulated deficit)                 55,941       (2,869)
Total stockholders' equity                              545,973      491,045
                                                        $ 1,705,627  $ 915,220

EPL OIL & GAS, INC.
SUPPLEMENTAL OIL & GAS DISCLOSURE
(Unaudited)
                                                               
                                                               
                                                               
                              Oil            Natural Gas      Equivalents
                              (Mbbl)         (Mmcf)           (Mboe)
Proved developed and                                           
undeveloped reserves:
                                                               
December 31, 2010              17,223         61,251           27,431
                                                               
Acquisitions                   7,987          8,640            9,427
Extensions, discoveries and    2,266          4,664            3,043
other additions
Revisions                      2,778          (6,678)          1,666
Production                     (2,953)        (9,092)          (4,468)
December 31, 2011              27,301         58,785           37,099
                                                               
Acquisitions                   16,430         115,876          35,742
Extensions, discoveries and    6,388          10,241           8,095
other additions
Revisions                      1,128          4,033            1,800
Production                     (3,805)        (8,996)          (5,304)
December 31, 2012              47,442         179,939          77,432
                                                               
                                                               
Proved developed reserves:                                     
                                                               
December 31, 2010              15,974         56,410           25,376
December 31, 2011              24,791         52,739           33,581
December 31, 2012              37,908         120,687          58,022
                                                               
Costs incurred for oil and natural gas property acquisition, exploration and
development activities for the two-years ended December 31 are as follows (in
thousands):
                                                               
                              2012           2011              
                                                               
Acquisitions:                                                  
Proved                         706,322        261,812          
Unproved                       7,496          14               
Exploration                    43,338         17,129           
Development                    179,728        83,420           
Total finding and development  223,066        100,549          
costs
Total finding, development     936,884        362,375          
and acquisition costs
Asset retirement liabilities   1,210          157              
incurred
Total cost incurred            $938,094       $362,532         

CONTACT:  Investors/Media

          T.J. Thom, Chief Financial Officer
          504-799-1902
          tthom@eplweb.com

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