EPL Announces Third Quarter and First Nine Months Results for 2013

EPL Announces Third Quarter and First Nine Months Results for 2013      First Nine Months Record Oil Production Drives EBITDAX to $384 million  EPL to Acquire New 3D Seismic Covering 200 GOM Shelf Blocks (~1 million acres)  HOUSTON, Oct. 31, 2013 (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 2013.  Highlights    *3Q13 EBITDAX rose 144% versus 3Q12 to $127.5 million and adjusted non-GAAP     net income rose 149% versus 3Q12 to $31.4 million, or $0.81 per diluted     share (see reconciliation of EBITDAX and adjusted non-GAAP net income in     the tables)   *3Q13 discretionary cash flow rose 135% versus 3Q12 to $112.7 million, or     $2.92 per share (see reconciliation of discretionary cash flow in the     tables)   *3Q13 oil production at 17,481 Bbls of oil per day, 96% higher than 3Q12   *3Q13 total production at 23,097 Bbls of oil equivalent per day, 113%     higher than 3Q12   *First nine months capital expenditures of $258.3 million; 32 successful     projects to date (84% success rate)   *Production levels expected in 4Q13 primarily impacted by reduced     production rates post storm of certain high-rate wells in the West Delta     field area shut-in during Tropical Storm Karen. Rig sourced and mobilizing     to area in mid-December to begin production uplift. Impact to forecasted     2013 oil production is approximately 7%   *Projected 2013 EBITDAX of $475 million (66% increase over 2012)   *Low leverage and ample liquidity: current net debt to projected 2013     EBITDAX estimated at 1.3x; liquidity in the form of cash plus undrawn     revolver availability estimated at $303 million   *Efforts underway to unlock 3P resource potential: Recently signed seismic     commitments totaling $45 million, including a multi-year commitment to     acquire new 3D seismic covering 200 blocks (~1 million acres) within the     shallow GOM. New 3D seismic acquisition to commence over core areas as     early as 2Q14. The new 3D seismic combined with state of the art     reprocessed datasets is expected to provide uplift necessary to exploit     both the deep and shallow section of the Company's asset base  Financial Results  Revenue for the third quarter and first nine months of 2013 was $184.0 million and $550.4 million, respectively. Revenue for the third quarter and the first nine months of 2013 increased 112% and 93% respectively versus prior periods, driven by higher realized oil production from the Company's oil-weighted acquisitions and organic exploitation projects.  For the third quarter of 2013, EPL reported a net loss to common stockholders of $1.3 million, or $0.03 per diluted share, compared to a net loss of $2.2 million, or $0.06 per diluted share for the same period a year ago. The net loss for the quarter included $26.5 million of non-cash unrealized losses on derivative instruments and $24.9 million of costs primarily attributable to loss on abandonment activities. These abandonment costs include $21.8 million in abandonment costs related to four wellbores in our non-operated deepwater properties, which are related to investments made prior to the Company's reorganization in 2009. These increased deepwater abandonment costs are primarily attributable to changes in regulatory interpretations and enforcement by the federal regulators in the deepwater that increased the required scope of work. Excluding the impact of these items, EPL's adjusted third quarter net income, a non-GAAP measure, would have been $31.4 million, or $0.81 per diluted share, compared to $12.6 million, or $0.33 per diluted share, for the same period a year ago.  For the nine months ended September 30, 2013, net income was $97.3 million, or $2.48 per diluted share, compared to net income of $34.7 million, or $0.88 per diluted share for the same period a year ago. Net income for the first nine months of 2013 included $28.6 million total gains on sale of assets and $38.4 million of costs primarily attributable to loss on abandonment activities (including the increased deepwater costs described above for the third quarter). Excluding the impact of these items, EPL's adjusted net income for the first nine months of 2013, a non-GAAP measure, would have been net income of $103.6 million, or $2.64 per diluted share compared to $49.3 million, or $1.26 per diluted share, for the same period a year ago.  For the third quarter of 2013, EBITDAX was $127.5 million and discretionary cash flow was $112.7 million, or $2.92 per share (see reconciliation of EBITDAX and discretionary cash flow in the tables). Cash flow from operating activities in the third quarter of 2013 was $116.7 million, compared with cash flow from operating activities of $54.4 million in the same quarter a year ago.  For the first nine months of 2013, EBITDAX was $384.0 million and discretionary cash flow was $347.6million, or $8.86 per share (see reconciliation of EBITDAX and discretionary cash flow in the tables). Cash flow from operating activities in the first nine months of 2013 was $309.2 million compared to $162.6 million for the same period a year ago.  Production and Price Realizations  Oil production for the third quarter of 2013 averaged 17,481 Barrels (Bbls) per day. Oil production volumes were 96% higher than in the comparable quarter last year, primarily as a result of organic oil production growth within EPL's existing core fields and the Hilcorp acquisition of oil-weighted properties that closed late last year.  Natural gas production averaged 33.7 million cubic feet (Mmcf) per day in the third quarter of 2013.Although EPL has continued its focus on oil development opportunities that have higher revenue generation potential than natural gas, with minimal expenditures, the Company has realized solid performance from its natural gas assets during the first nine months of this year.  Price realizations for the third quarter of 2013, all of which are stated before the impact of derivative instruments, averaged $110.88 per barrel for crude oil and $3.63 per thousand cubic feet (Mcf) of natural gas, compared to $105.35 per barrel of crude oil and $3.00 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 2013 averaged 17,554 Bbls per day, which was 88% higher than the comparable period a year ago. Natural gas production averaged 34.1 Mmcf per day in the first nine months of 2013. Price realizations, all of which are stated before the impact of derivative instruments, averaged $110.02 per barrel for crude oil and $3.78 per Mcf of natural gas in the first nine months of 2013, compared to $110.25 per barrel of crude oil and $2.55 per Mcf of natural gas in the same period a year ago.  Operating Expenses  Lease operating expenses (LOE) for the third quarter of 2013 totaled $42.3 million, including approximately $2 million of non-routine workover expenses. General and administrative (G&A) expenses were $6.4 million during the third quarter of 2013. Reported expenses include non-cash stock based compensation recorded during the quarter of $1.9 million.  LOE for the first nine months of 2013 totaled $126.7 million, while G&A expenses were $20.9 million for the same period. Reported LOE and G&A increased over the same periods a year ago mainly due to costs associated with our expanded asset base. Reported expenses for the first nine months of 2013 include non-cash stock based compensation of $5.4 million.  Capital Expenditures and P&A Operations  During the first nine months of 2013, costs incurred for development and exploration activities totaled approximately $255.0 million, which combined with $3.3 million spent on seismic purchases, resulted in total expenditures of $258.3 million. So far to date this year, the Company has conducted 38 operations, including 14 successful sidetracks and drillwells and 18 successful workover and well reactivations, with an overall 84% success rate.  The Company currently expects capital expenditures to total approximately $335 million in 2013. Development and infield exploration spending is budgeted primarily in the West Delta, East Bay, South Timbalier, Ship Shoal, and South Pass core field areas. The Company has continued its active drilling and workover program with 5 rigs expected to be working within its core field areas during the remainder of the year. In addition, EPL expects to spend approximately $46 million for plugging and abandonment and other decommissioning activities. The Company spent approximately $36.8 million in the first nine months of 2013 on these activities.  EPL to Acquire New 3D Seismic Over Core Central GOM Shelf  EPL has recently signed 3D seismic commitments totaling approximately $45 million. These agreements include a commitment to acquire new 3D seismic using wide azimuth acquisition techniques covering a minimum of 200 blocks (~1 million acres) within the shallow water GOM. This new seismic acquisition, combined with state of the art 3D reprocessed datasets, are expected to enhance clarity and de-risk vast resources in the deep and shallow section of the Company's asset base. The new 3D Full Azimuth Nodal seismic data acquisition to be conducted by Fairfieldnodal is expected to commence late second quarter of 2014. During the fourth quarter of 2013, the Company expects to incur approximately $8 million of exploration expenses related to these seismic agreements.  Gary C. Hanna, the Company's Chairman, President and CEO, stated, "We have taken a measured step forward on our regional seismic and reprocessing efforts by becoming a major underwriter in new seismic acquisitions in the central GOM shelf. This new multi-year seismic commitment, covering a minimum of one million acres, will blanket our core areas and employ state of the art technology designed to image the deeper section while continuing to enhance the shallow.Additionally, we will also continue to utilize ever-improving reprocessing techniques, such as reverse time migration and inversion, to further drive our exploration and acquisition efforts both in the known producing pays and in the deeper, largely untested section."  Liquidity and Capital Resources  As of September 30, 2013, the Company had cash on hand of $2.9 million and long-term restricted cash of $6.0 million. EPL has a $750 million senior secured credit facility, with a current borrowing base of $425 million.As previously announced in April, 2013, we sold our Bay Marchand interests to the property operator for $51.5 million in cash and the buyer's assumption of liabilities recorded on our balance sheet of $11.3 million resulting in total consideration of $62.8 million, subject to customary adjustments to reflect the January 1, 2013 economic effective date. The cash proceeds from this sale of assets were deposited with a qualified intermediary in contemplation of a potential tax-deferred exchange of properties and classified as restricted cash at June 30, 2013.On September 26, 2013, $16.5 million of the proceeds were used to fund an acquisition of 100% of the working interest of certain Gulf of Mexico shelf oil and natural gas interests within the West Delta 29 field.On September 29, 2013, the underlying escrow agreement expired, and the remaining amount of the deposit became unrestricted. As a result, as of September 30, 2013, EPL had reduced its borrowings under its credit facility to $125 million, a reduction of $40 million since the prior quarter end.  EPL's current liquidity, in the form of cash plus undrawn revolver availability is approximately $303 million. Based on the solid performance of its assets, EPL's current leverage remains low, estimated at 1.3x net 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 and 2014 Hedge Position  The Company has layered in downside protection to protect its cash flow, mainly in the form of Louisiana Light Sweet (LLS) and Brent oil swaps. For the fourth quarter of 2013, EPL has a total of 8,045 Bbls of oil per day hedged, the majority of which is hedged using Brent swaps at a fixed price averaging $104.45 per Bbl. For full year 2014, EPL has a total of 10,996 Bbls of oil per day hedged, all of which is hedged using LLS and Brent swaps at a fixed price averaging $99.54 per Bbl. For the fourth quarter of 2013, EPL has a total of 7,332 Mcf per day of gas hedged, all of which is hedged using swaps at a fixed price averaging $3.68 per Mcf. 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 Mcf.  Fourth Quarter and Full Year 2013 Guidance  Hanna concluded, "We are seeing some disruptions within this quarter, namely a week or so of downtime from tropical storm Karen and ongoing curtailed production from a third party pipeline shut-in that began last week. Additionally following the storm, as we worked to restore production, we have seen a significant performance drop off isolated to three high rate oil wells within our West Delta area shut-in during the event. Despite the drop, the wells are still highly economic, with production already exceeding our proved reserves to date and behind pipe opportunities we can recomplete to once the current zones deplete.  We have sourced a new rig to add to our active drilling program that is now set to mobilize to the West Delta field area as early as mid-December to begin executing projects within this prospect rich area. We are confident that this effort and our ongoing operations elsewhere will act to uplift our oil production. However, our fourth quarter oil production averages will suffer from this event and the other disruptions.Therefore, we are decreasing our 2013 annual forecasted oil production by roughly 7% to approximately 17,000 Bbls of oil per day, and we are forecasting our exit rate to be around 17,500 Bbls of oil per day. Despite this change and the recent decrease in oil prices, our projected 2013 EBITDAX remains high at approximately $475 million, up 66% from last year."  ESTIMATED PRODUCTION & SWAP HEDGE VOLUMES Note: 4Q13/Full Yr 2013 production guidance impacted by the following: the downtime associated with fields shut-in during TS Karen, reduced rates post TS Karen isolated to the West Delta area, and 3rd party pipeline intregrity testing late Oct/early Nov affecting West Delta and South Pass field areas.                                                                Net Production                4Q 2013                Full Year 2013 (per day) Oil, including                 14,750  -     15,750 16,850  -     17,100 NGLs (Bbls) Natural gas               24,000  -     30,000 31,500  -     33,000 (Mcf) Boe                       18,750  -     20,750 22,100  -     22,600 % Oil, including NGLs (using                        77%                    76%      midpoint of guidance)                                                                Swap Contracted                                                      Volume Oil (barrels)                     7,045                  10,157   % of Oil swap                     46%            60%      -     59% contracted % of Boe swap                     36%            46%      -     45% contracted Average Swap                      $103.63                $104.62  Price Level                                                                ESTIMATED EXPENSES (in Millions,                                   unless otherwise noted)                                                                Lease Operating (including                $41.0  -     $44.0 $168   -     $171 energy insurance) General & Administrative             $7.0   -     $7.5  $28    -     $29 (cash and non-cash) Taxes, other than on                   $2.5   -     $3.5  $11    -     $12 earnings Exploration               $11    -     $13   $21    -     $23 Expense DD&A ($/Boe),                                $ excluding                 $25.50 -     27.00   $25.50 -     $27.00 accretion DD&A ($/Boe),                                $ including                 $28.50 -     30.00   $28.50 -     $30.00 accretion Interest Expense (including amortization of discount    $12.5  -     $13.5 $51    -     $53 and deferred financing costs)                                                                ESTIMATED     $475  Million                                       EBITDAX:                                                                ESTIMATED FREE CASH     $55   Million                                       FLOW:  Conference Call Information  EPL has scheduled a conference call for today, October 31, 2013, at 9:30 A.M. Central Time/10:30 A.M. Eastern Time to review results for the third quarter 2013 and to discuss its outlook for the remainder of the year. 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 88223861.  The call will be available for replay beginning two hours after the call is completed through midnight of November 14, 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 88223861.  The conference call will be webcast live as well as for on-demand listening at the Company's website, 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 headquartered in Houston, Texas with an office in New Orleans, Louisiana.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 and to abandonment of wells and production facilities; 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/)  EPL OIL & GAS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands) (Unaudited)                         Three Months Ended         Nine Months Ended                         September 30,              September 30,                         2013          2012         2013          2012 Revenue:                                                        Oil and natural gas      $183,114    86,645      $547,099    284,666 Other                    878          23          3,329        68                         183,992      86,668      550,428      284,734                                                                Costs and expenses:                                             Lease operating          42,291       24,995      126,663      62,067 Transportation           974          160         2,317        410 Exploration expenditures 5,146        966         13,609       17,862 and dry hole costs Impairments              12           498         2,183        6,206 Depreciation, depletion  53,989       27,106      153,847      78,932 and amortization Accretion of liability for asset retirement     6,266        3,472       18,464       10,031 obligations General and              6,426        5,995       20,927       16,993 administrative Taxes, other than on     3,285        3,189       8,884        9,834 earnings Gain on sale of assets   (1,745)      -           (28,601)     - Other                    26,534       998         33,077       4,616 Total costs and expenses 143,178      67,379      351,370      206,951                                                                Income from operations   40,814       19,289      199,058      77,783                                                                Other income (expense):                                         Interest income          64           40          91           128 Interest expense         (13,177)     (5,114)     (39,370)     (15,081) Loss on derivative       (30,012)     (22,108)    (7,033)      (11,865) instruments                         (43,125)     (27,182)    (46,312)     (26,818)                                                                Income (loss) before     (2,311)      (7,893)     152,746      50,965 income taxes Provision for Income                                            taxes: Current                  (25)         126         (175)        (174) Deferred                 1,052        5,520       (55,239)     (16,134) Total provision for      1,027        5,646       (55,414)     (16,308) income taxes                                                                Net income (loss)        $(1,284)     (2,247)     $97,332     34,657                                                                Net income (loss), as    $(1,284)     (2,247)     $97,332     34,657 reported Add back:                                                       Unrealized loss (gain) due to the change in     26,478       22,010      (822)        8,052 fair value of derivative instruments Gain on sale of assets   (1,745)      -           (28,601)     - Dry hole costs           73           (76)        3,764        4,097 Impairments              12           498         2,183        6,206 Loss on abandonment      22,562       4           27,982       3,405 activities Amortization of weather  4,022        1,029       5,333        1,371 derivative premium Deduct:                                                         Income tax adjustment    (18,710)     (8,588)     (3,581)      (8,466) for above items                                                                Adjusted Non-GAAP net    $31,408     12,630      $103,590    49,322 income                                                                EBITDAX Reconciliation:                                                                                                        Net income (loss), as    $(1,284)     (2,247)     $97,332     34,657 reported Add back:                                                       Income taxes             (1,027)      (5,646)     55,414       16,308 Net interest expense     13,113       5,074       39,279       14,953 Depreciation, depletion, amortization and         60,255       30,578      172,311      88,963 accretion Impairments              12           498         2,183        6,206 Exploration expenditures 5,146        966         13,609       17,862 and dry hole costs Loss on abandonment      22,562       4           27,982       3,405 activities Amortization of weather  4,022        1,029       5,333        1,371 derivative premium Gain on sale of assets   (1,745)      -           (28,601)     - Less impact of:                                                 Unrealized loss (gain) due to the change in     26,478       22,010      (822)        8,052 fair value of derivative instruments                                                                EBITDAX                  $127,532    52,266      $384,020    191,777                                                                Weighted average dilutive common shares   38,589       38,743      39,256       39,056 outstanding                                                                                                                               EBITDAX is defined as net income (loss) before income taxes, net interest expense, depreciation, depletion, amortization and accretion, impairments, exploration expenditures and dry hole costs, loss on abandonment activities, amortization of weather derivative premium, and gain on sale of assets, and further deducts the unrealized gain or loss on our derivative instruments. 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,                          2013            2012        2013         2012 Cash flows from operating                                        activities: Net income (loss)         $(1,284)       (2,247)    97,332      34,657 Adjustments to reconcile net income (loss) to net cash provided by operating                          activities: Depreciation, depletion   53,989         27,106     153,847     78,932 and amortization Accretion of liability for asset retirement      6,266          3,472      18,464      10,031 obligations Unrealized loss (gain) on 26,478         22,010     (822)       8,052 derivative contracts Non-cash compensation     1,910          1,175      5,358       3,493 Deferred income taxes     (1,052)        (5,520)    55,239      16,134 Exploration expenditures  73             (76)       3,764       4,097 Impairments               12             498        2,183       6,206 Amortization of deferred financing costs and       1,361          512        4,016       1,516 discount on debt Gain on sale of assets    (1,745)        -         (28,601)    - Other                     22,562         4          27,982      3,405 Changes in operating                                             assets and liabilities: Trade accounts receivable 8,542          4,270      (1,718)     5,171 Prepaid expenses          549            2,242      (5,308)     4,062 Other assets              (1,361)        440        (1,077)     362 Accounts payable and      10,457         8,852      15,345      14,149 accrued expenses Asset retirement          (10,072)       (8,301)    (36,843)    (27,647) obligation settlements                                                                 Net cash provided by      $116,685      54,437     309,161     162,620 operating activities                                                                 Reconciliation of                                                discretionary cash flow: Net cash provided by      116,685        54,437     309,161     162,620 operating activities Changes in working        (8,115)        (7,503)    29,601      3,903 capital Non-cash exploration expenditures and          (85)           (422)      (5,947)     (10,303) impairments Total exploration expenditures, dry hole    4,200          1,464      14,834      24,068 costs and impairments Discretionary cash flow   $112,685      47,976     347,649     180,288                                                                                                                                 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,            September 30,                            2013          2012       2013          2012                                                                 PRODUCTION AND PRICING                                           Net Production (per day):                                                                                                        Crude Oil (Bbls)            16,563       8,466     16,785       8,923 Natural Gas Liquids (Bbls)  918          435       769          427 Oil (Bbls)                  17,481       8,901     17,554       9,350 Natural gas (Mcf)           33,696       11,558    34,130       14,378 Total (Boe)                 23,097       10,827    23,242       11,746 Average Sales Prices:                                            Crude Oil (per Bbl)         $110.88     105.35    $110.02     110.25 Natural Gas Liquids (per    34.23        35.03     36.65        43.27 Bbl) Oil (per Bbl)               106.85       101.91    106.81       107.19 Natural gas (per Mcf)       3.63         3.00      3.78         2.55 Average (per Boe)           86.17        86.98     86.22        88.44 Oil and Natural Gas                                              Revenues (in thousands): Crude Oil                   $168,956    82,051    $504,160    269,568 Natural Gas Liquids         2,891        1,402     7,690        5,061 Oil                         171,847      83,453    511,850      274,629 Natural gas                 11,267       3,192     35,249       10,037 Total                       183,114      86,645    547,099      284,666                                                                 Impact of derivative instruments settled during                                       the period^(1): Oil (per Bbl)               $ (2.18)    (0.11)    $ (1.53)    (1.49) Natural gas (per Mcf)       (0.01)       (0.01)    (0.05)       -                                                                 OPERATIONAL STATISTICS                                           Average Costs (per Boe):                                         Lease operating expense     $19.90      25.09     $19.96      19.28 Depreciation, depletion and 25.41        27.21     24.25        24.52 amortization Accretion expense           2.95         3.49      2.91         3.12 Taxes, other than on        1.55         3.20      1.40         3.06 earnings General and administrative  3.02         6.02      3.30         5.28                                                                 ^(1)The derivative amounts represent the realized portion of gains or losses on derivative instruments 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) (Unaudited)                                          September 30,      December 31,                                          2013               2012                                                             ASSETS                                                       Current assets:                                              Cash and cash equivalents                 $2,939           $1,521 Trade accounts receivable - net           68,748            67,991 Fair value of commodity derivative        972               3,302 instruments Deferred tax asset                        4,414             3,322 Prepaid expenses                          14,454            9,873 Total current assets                      91,527            86,009                                                             Property and equipment                    2,299,323         2,025,647 Less accumulated depreciation, depletion, (569,124)         (427,580) amortization and impairments Net property and equipment                1,730,199         1,598,067                                                             Restricted cash                           6,023             6,023 Fair value of commodity derivative        675               211 instruments Deferred financing costs --- net of       10,851            12,386 accumulated amortization Other assets                              4,023             2,931                                          $1,843,298       $1,705,627                                                             LIABILITIES AND STOCKHOLDERS' EQUITY                         Current liabilities:                                         Accounts payable                          $55,410          $34,772 Accrued expenses                          103,160           117,372 Asset retirement obligations^(1)          47,482            30,179 Fair value of commodity derivative        10,694            10,026 instruments Deferred tax liabilities                  -                 - Total current liabilities                 216,746           192,349                                                             Long-term debt                            621,723           689,911 Asset retirement obligations^(1)          240,288           204,931 Deferred tax liabilities                  124,025           67,694 Fair value of commodity derivative        281               3,637 instruments Other                                     1,158             1,132                                          1,204,221         1,159,654                                                             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, 2013 and December 31, 2012 Common stock, $0.001 par value per share. Authorized 75,000,000 shares; shares issued 40,948,737 and 40,601,887 at September 30, 2013 and December 31, 2012, 40                40 respectively; shares outstanding 39,083,424 and 39,103,203 at September 30, 2013 and December 31, 2012, respectively Additional paid-in capital                516,690           510,469 Treasury stock, at cost, 1,865,313 and 1,498,684 shares at September 30, 2013    (30,926)          (20,477) and December 31, 2012, respectively Retained earnings                         153,273           55,941 Total stockholders' equity                639,077           545,973                                          $1,843,298       $1,705,627  ^(1)We revise our estimates of ARO as information about material changes to the liability becomes known. During the three months ended September 30, 2013, we recorded revisions to our ARO liability related to our shallower-water assets of $31.0 million. This does not affect current results of operations, but increases the carrying amount of the related assets and will result in higher DD&A including accretion expense in future periods.  CONTACT: Investors/Media           T.J. Thom, Chief Financial Officer          713-228-0711          tthom@eplweb.com  EPL Oil & Gas, Inc. Logo