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ENDEAVOUR INTERNATIONAL CORP: 1st Quarter Results


Endeavour Announces 2013 First Quarter Financial and Operational Results

HOUSTON, May 9, 2013 -- Endeavour International Corporation (NYSE: END) (LSE: ENDV) today reported first quarter 2013 net loss, as adjusted of $12.1 million compared to a net loss, as adjusted of $15.4 million for the same period in 2012. On a GAAP basis, net loss for the first quarter of 2013 was $14.0 million as compared to net loss of $35.3 million for the same quarter in 2012.

Sales volumes for the first quarter of 2013 were 7,186 barrels of oil equivalent per day ("boepd"), compared to 4,174 boepd for the same quarter in the prior year. First quarter 2013 sales numbers were impacted by the timing of liftings at the Alba field, where during the period there was only a single lifting. Physical production for the first quarter of 2013 averaged 9,385 boepd compared to 3,974 boepd for the same quarter of 2012.

Recent Business Highlights:

* North Sea:


      + Drilling of the West Rochelle well remains on schedule, with first
        production expected mid-year 2013
      + The third production well at Bacchus began drilling in March
      + The Alba 2013 in-field drilling program commenced

+ The Centurion South exploration well was drilled to total depth * Finance:

+ The sale of the $107.5 million Monetary Production Payment closed on

April 30, 2013 * Strategic Review:


      + Initiated in February, the review process remains on-going

"This quarter has been about execution and keeping our development projects
moving forward. The drilling of our production wells at West Rochelle and
Bacchus continues on schedule. We have worked through a significant number of
the processing issues at Alba and expect to see better production levels from
the field in the second half of the year," said William L. Transier, chairman,
chief executive officer and president. "Our strategic review process remains
on-going. We intend to bring the process to conclusion as soon as a thorough
evaluation of all the options is completed by our Board of Directors."

Operational Update

United Kingdom

In mid-February, the Transocean Prospect rig moved to the West Rochelle field.
Drilling of the production well has reached total measured depth and final
completion of the well is in process. First production from the West Rochelle
well is expected in mid-2013.The subsea pipeline and manifold infrastructure
for the field has been installed and the topside modifications to the Scott
Platform have also been completed. Endeavour has a 44% working interest in the
Rochelle development.

At the Bacchus field, the Rowan Gorilla VII rig arrived in late March to drill
the third planned production well. Production performance from the first two
wells continues to be strong and remains above original expectations. First
production from the third well is expected during the third quarter of 2013.
Endeavour has a 30% working interest in the Bacchus field.

At Alba, the year's drilling campaign commenced with three development wells
planned. The timing of the drilling program has been accelerated into the first
half of the year. The Company expects the drilling, in combination with
improvements in the processing systems, to result in increased production
levels from the field during the second half of the year. During the first
quarter, production at the field was impacted by an unplanned five-day shutdown
and lower than expected production levels due to continuing processing
problems. Endeavour has a 25.68% working interest in the Alba field.

Beginning in March, the Centurion South exploration well was drilled to its
planned total depth. The presence of hydrocarbon bearing Fulmar reservoir sands
was confirmed, although the section was thinner than anticipated. The Company
and its partners are evaluating the results, as well as the overall commercial
viability of the combined Centurion discoveries. The prospect is a satellite to
the Centurion discovery which was drilled in 1984 and flow tested at 5,200
boepd. The well is being plugged and abandoned. Endeavour has a 33.3% working
interested in the block.

Finance

On April 30, Endeavour closed on the sale of a $107.5 million Monetary
Production Payment (the 'MPP') after receiving the required approvals from the
United Kingdom regulators. The MPP will be satisfied out of the production from
the Alba and Bacchus fields.

Strategic Review Process

In February 2013, the Board of Directors initiated a process to explore a broad
range of strategic alternatives to further enhance shareholder value. Data
rooms were opened in the U.K. and U.S. and the process is on-going. Endeavour
remains focused on executing its operational plans. While the strategic review
is continuing, the Company can provide no assurance that the strategic review
will result in the Company changing its current business plan or completing any
transaction.

Earnings Conference Call, Thursday, May 9, 2013 at 9:00 a.m., Central Time, 3:
00 p.m. British Summer Time

Endeavour International will host a conference call and web cast to discuss its
2013 first quarter financial and operating results on Thursday, May 9, 2013 at
9 a.m. Central Time, 3 p.m. British Summer Time. A supporting slide deck for
the conference call is available on the home page of Endeavour's website at 
www.endeavourcorp.com and under the Investor Relations section in conjunction
with the details for the conference call. To participate and ask questions
during the conference call, dial the local country telephone number and the
confirmation code 3076749. The toll-free numbers are 800-756-4697 in the United
States and 0-808-101-1152 in the United Kingdom. Other international callers
should dial 913-981-5517 (tolls apply). To listen only to the live audio web
cast access Endeavour's home page at www.endeavourcorp.com. A replay will be
available beginning at 12:00 p.m. Central Time on May 9, 2013 through 12:00
p.m. on May 16, 2013 by dialing toll free 888-203-1112 (U.S.) or 719-457-0820
(international), confirmation code 3076749.

Endeavour International Corporation is an oil and gas exploration and
production company focused on the acquisition, exploration and development of
energy reserves in the North Sea and the United States. For more information,
visit www.endeavourcorp.com.

Additional information for investors:

Certain statements in this news release should be regarded as "forward-looking"
statements within the meaning of the securities laws. These statements speak
only as of the date made. Such statements are subject to assumptions, risk and
uncertainty. Actual results or events may vary materially.

The Securities and Exchange Commission (SEC) permits oil and gas companies, in
their filings with the SEC, to disclose not only proved reserves, but also
probable reserves and possible reserves that meet the SEC's definitions for
such terms, and price and cost sensitivities for such reserves, and prohibits
disclosure of resources that do not constitute such reserves. We use may use
certain terms in our news releases, such as "reserve potential," that the SEC's
guidelines strictly prohibit us from including in filings with the SEC. These
estimates are by their nature more speculative than estimates of proved,
probable and possible reserves and accordingly are subject to substantially
greater risk of being actually realized. In addition, we do not represent that
the probable or possible reserves described herein meet the recoverability
thresholds established by the SEC in its new definitions. Investors are urged
to also consider closely the disclosure in our filings with the SEC, available
from our website at www.endeavourcorp.com. Endeavour is also subject to the
requirements of the London Stock Exchange and considers the disclosures in this
release to be appropriate and/or required under the guidelines of that
exchange.
                                                                      
                Endeavour International Corporation                             
      
               Condensed Consolidated Balance Sheets                            
     
                           (Unaudited)                                          
                 
                      (Amounts in thousands)                                    
            
                                                                      
                                                                      
                                             March 31,    December 31,
                                                2013         2012        
                                             ------------------------           
              
                         Assets                                                 

Current Assets:

Cash and cash equivalents $ 80,781 $ 59,185 Restricted cash 178 178 Accounts receivable 30,173 46,003 Prepaid expenses and other current assets 40,562 20,995

------ ------

Total Current Assets 151,694 126,361

Property and Equipment, Net 1,032,810 1,003,441 Goodwill 259,238 262,764 Other Assets 58,509 49,906


                                                ------        ------            
           

Total Assets $ 1,502,251 $ 1,442,472


                                             ---------     ---------            
              
                                                                      
           Liabilities and Stockholders' Equity                                 

Current Liabilities:

Accounts payable $ 44,731 $ 60,153 Current maturities of debt - 15,713 Accrued expenses and other 150,948 90,100

------- ------

Total Current Liabilities 195,679 165,966

Long-Term Debt 862,249 843,793 Deferred Taxes 154,354 141,887 Other Liabilities 155,961 147,692

------- -------

Total Liabilities 1,368,243 1,299,338

Commitments and Contingencies

Series C Convertible Preferred Stock 43,703 43,703

Stockholders' Equity 90,305 99,431

------ ------

Total Liabilities and Stockholders' Equity $ 1,502,251 $ 1,442,472


                                             ---------     ---------            
            
                                                                               
                Endeavour International Corporation                             
               
          Condensed Consolidated Statement of Operations                        
         
                           (Unaudited)                                          
                          
           (Amounts in thousands, except per share data)                        
          
                                                                               
                                                                               
                                                        Three Months Ended      
                                                                 March 31,      
                                                            -----------       
                                                         2013          2012   
                                                        ------        ------    

Revenues $ 57,672 $ 15,166

Cost of Operations:


     Operating expenses                                 17,490         4,898    
     Depreciation, depletion and amortization           22,947         7,906    
     Impairment of oil and gas properties                3,534        15,740   
     General and administrative                          5,482         5,323
                                                         -----         -----
     Total Expenses                                     49,453        33,867   
                                                        ------        ------    
          

Income (Loss) From Operations 8,219 (18,701)


                                                         -----        ------    
          

Other Income (Expense):


     Derivatives:                                                              
              Unrealized gains (losses)                   1,580       (4,779)  
     Interest expense                                   (21,438)     (19,707) 
     Letter of credit fees                              (11,380)           -    
    
     Interest income and other                            9,882       (2,668)  
                                                          -----        -----    

Total Other Expense (21,356) (27,154)


                                                         ------       ------    
            

Loss Before Income Taxes (13,137) (45,855)

Income Tax Expense (Benefit) 909 (10,593)


                                                            ---       ------    
          

Net Loss (14,046) (35,262) Preferred Stock Dividends 456 456


                                                               ---          ---    
        

Net Loss to Common Stockholders $ (14,502) $ (35,718)


                                                     ----------    ---------    
                     

Basic and Diluted Net Loss per Common Share $ (0.31) $ (0.94)

-------- --------

Weighted Average Number of Common Shares Outstanding:


     Basic and Diluted                                  47,060        37,854   
                                                        ------        ------    
           
                                                                               
                    Endeavour International Corporation                         
                   
               Condensed Consolidated Statement of Cash Flows                   
              
                              (Unaudited)                                       
                             
                          (Amounts in thousands)                                
                         
                                                                               
                                                                               

Three Months Ended March 31,

------------------------- --


                                                          2013            2012  
     
                                                          ----            ----  

Cash Flows from Operating Activities:

Net loss $ (14,046) $ (35,262) Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation, depletion and amortization 22,947 7,906

Impairment of oil and gas properties 3,534 15,740

Deferred tax expense (benefit) 128 (9,014)

Unrealized (gains) losses on derivatives (1,580) 4,779

Amortization of non-cash compensation 832 1,559

Amortization of loan costs and discount 3,439 3,669

Non-cash interest expense 2,274 3,528

Other (4,723) 1,892

Changes in operating assets and liabilities 34,800 (15,950)

------ ------

Net Cash Provided by (Used in) Operating Activities 47,605 (21,153)

Cash Flows From Investing Activities: Capital expenditures (58,257) (23,242)

Acquisitions (817) (8,017)

Increase in restricted cash - (493,434)

------ --------

Net Cash Used in Investing Activities (59,074) (524,693)

Cash Flows From Financing Activities: Repayments of borrowings - (588) Borrowings under debt agreements, net of debt - 480,000

discount

Financing costs paid (9,935) (21,005) Proceeds from issuance of monetary production 43,000 -

payment

Dividends paid - (416) Other financing - 5


        
                                                         ------         ------- 

Net Cash Provided by Financing Activities 33,065 457,996

Net Increase (Decrease) in Cash and Cash Equivalents 21,596 (87,850) Cash and Cash Equivalents, Beginning of Period 59,185 106,036

------- -------

Cash and Cash Equivalents, End of Period $ 80,781 $ 18,186


                                                          ---------       --------- 
                     
                                                                       
                  Endeavour International Corporation                           
         
                       Operating Statistics                                     
              
                           (Unaudited)                                          
                  
                                                                       
                                                                       
                                                 Three Months Ended        
                                                      March 31,                 
                                                      --------                  
                                                   2013           2012      

---- ---- Sales volume (1)


    Oil and condensate sales (Mbbls):                                  
              United Kingdom                       508           96    
              United States                          -            1
                                                   ---           --
              Total                                508           97
                                                   ---           --             
                                                          
    Gas sales (MMcf):                                                  
              United Kingdom                        11            21    
              United States                        821         1,677
                                                   ---         -----    
                Total                              832         1,698
                                                   ---         -----   
                                                                       
                                                                       
    Oil equivalent sales (MBOE)                                        
              United Kingdom                       510           100   
              United States                        137           280
                                                   ---           ---   
              Total                                647           380
                                                   ---           ---   
                                                                       
    Total BOE per day                            7,186         4,174
                                                 -----         -----            
                                                           

Physical production volume (BOE per day)(1)


                               
              United Kingdom                     7,862           893   
              United States                      1,523         3,081
                                                 -----         ----- 
              Total                              9,385         3,974
                                                 -----         ----- 
                                                                       

Realized Price, before and after derivatives


    Oil and condensate price ($ per Bbl)   $    108.40    $   116.99
                                           -----------    ----------
    Gas price ($ per Mcf)                    $    3.13      $   2.25  
                                             ---------     ---------            
         
    Equivalent oil price ($ per BOE)        $    89.17     $   39.92 
                                            ----------     ---------            
         

(1) We record oil revenues using the sales method and use the entitlements


    method to account for sale of gas production.  Physical production may     
    differ from sales volumes based on the timing of tanker liftings for our   
    international sales.                                                       
                                                                               
                       Endeavour International Corporation                      
                      
                   Reconciliation of GAAP to Non-GAAP Measures                  
                  
                                   (Unaudited)                                  
                                  
                             (Amounts in thousands)                             
                            
                                                                               

As required under Regulation G of the Securities Exchange Act of 1934, provided below are reconciliations of net income (loss) to the following non-GAAP financial measures: net income, as adjusted and Adjusted EBITDA. We use these non-GAAP measures as key metrics for our management and to demonstrate our ability to internally fund capital expenditures and service debt. The non-GAAP measures are useful in comparisons of oil and gas exploration and production companies as they exclude non-operating fluctuations in assets and liabilities.

(amounts in thousands) First Quarter


    
                                                              March 31,         
      
                                                              --------          
       
                                                          2013         2012     
                                                              ----         ----     

Net loss $ (14,046) $ (35,262) Impairment of oil and gas properties (net of tax) (1) 3,534 15,740

Unrealized loss on derivatives (net of tax) (2) (1,580) 4,148


                                                            -----        -----    
          

Net Loss as Adjusted $ (12,092) $ (15,374)

---------- ---------

Net loss $ (14,046) $ (35,262) Unrealized loss on derivatives (1,580) 4,779

Net interest expense 21,422 19,651

Letter of credit fees 11,380 -

Depreciation, depletion and amortization 22,947 7,906

Impairment of oil and gas properties 3,534 15,740

Income tax expense (benefit) 909 (10,593)


                                                            ---       ------    
         

Adjusted EBITDA $ 44,566 $ 2,221


                                                          -------        -----    
                

(1) Since the impairments related to U.S. oil and gas properties, we recognized


     no tax benefits as there was no assurance that we could generate any U.S.  
     taxable earnings.                                                          

(2) Net of tax (benefit) expense of none and $631, respectively.

SOURCE Endeavour International Corporation

CONTACT: Endeavour - Investor Relations, Darcey Matthews, 713.307.8711, Pelham Public Relations - UK Media, Philip Dennis, +44(0)207 861 3919, Henry Lerwill, +44(0)207 861 3169

END

-0- May/09/2013 06:00 GMT

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