Endeavour Makes Headway in US, UK in 2Q11

- Endeavour Makes Headway in US, UK in 2Q11

Wednesday, August 03, 2011
Endeavour International Corp.

Endeavour reported adjusted EBITDA for the second quarter of 2011 was $7.6 million compared to $13.1 million in the second quarter of 2010 and $4.1 million in the first quarter of 2011. On a GAAP basis, net loss was $15.6 million for the second quarter of 2011 as compared to net income of $0.6 million for the same quarter in 2010.

Business Highlights:

• North Sea:
  • Commenced drilling operations at Bacchus
  • Agreement of commercial terms for the processing and transportation of the Greater Rochelle production on the Scott Platform
  • Contracts awarded for the pipeline and umbilical's for the development of Greater Rochelle area
• U.S. Onshore:
  • Announced the acquisition of 50,000 net acres in Marcellus Shale with existing production and pipeline infrastructure
  • 8 gross wells brought on production through July in Louisiana and East Texas
  • 4 additional gross wells completing or drilling in Louisiana
• Financial:
  • Increased available capital in July resulting in cash on hand of approximately $245 million

"During the second quarter financial results were as expected, while we made substantive progress on our U.K. development projects and our U.S. Haynesville unconventional gas play. Adding to this progress, our announced strategic acquisition of acreage and infrastructure gives us exposure to 1.0 to 1.3 trillion cubic feet of gross recoverable natural gas resource potential in the Marcellus area. We are confident that the balanced portfolio can deliver significant growth in both oil and natural gas production in the near-term," said William L. Transier, chairman, chief executive officer and president. "During July, the Company enhanced its flexibility and growth potential by adding approximately $100 million in available liquidity in addition to funding the $110 million needed for the Marcellus acquisition. The additional capital provides the resources to take advantage of opportunities for growth from existing and emerging parts of our portfolios, while also providing liquidity in case of any unforeseen events."

Operational Update

North Sea

The drilling of the three planned development wells is underway in the Bacchus field in Block 22/06a in the Central North Sea. Production from the development is expected to begin in the fourth quarter. The Company has a 30% working interest in the field.

In the Greater Rochelle area, the Company awarded two contracts for the design and fabrication of components for the subsea development that will link production for processing and transport to the nearby Scott platform. The contract for the drilling rig for the development will be finalized during the third quarter. Endeavour is operator and holds a 44% ownership interest in the Greater Rochelle development which is now comprised of Blocks 15/26b, 15/26c and 15/27.

U.S. Onshore

Endeavour will assume operated interests in leasehold, producing wells, pipeline and related facilities held by SM Energy Company and its minority partners in McKean and Potter Counties. The transaction increases Endeavour's leasehold interest in the Marcellus shale to approximately 93,000 gross (68,000 net) acres with more than 300 identified drilling locations in McKean and Cameron counties alone. The purchase will strengthen the Company's position in one of the most active and low-cost U.S. shale plays and provides significant production and reserve potential. The transaction is expected to close in the fourth quarter. In the Company's existing Marcellus acreage in Cameron County, two horizontal wells are waiting on completion, while the existing Daniel Field gathering infrastructure is being expanded.

During the quarter, Endeavour brought six gross wells on production in its Haynesville and Cotton Valley plays in Louisiana and East Texas, respectively. In July, production commenced from two additional gross wells with four other wells currently completing or drilling.

In the Montana Heath shale oil play, the Company and its partners expect to launch drilling operations on four vertical wells in the third quarter. In the Alabama Devonian shale gas play, Endeavour has successfully drilled and cased a horizontal re-entry of a previously drilled vertical pilot well. This well is anticipated to be completed and tested by the fourth quarter.

Financing Update

During the second quarter, the Company completed the redemption of all of its outstanding $81.25 million of 6% Senior Notes due 2012. The Notes were exchanged at 100% of principal amount plus accrued and unpaid interest.

In July, Endeavour closed on its private placement of $135 million aggregate principal amount of 5.5% convertible senior notes due 2016, including the full exercise by the initial purchasers of their option to purchase an additional $15 million principal amount of the offering. The Company intends to use the net proceeds of the offering primarily to fund its announced acquisition of operated interest in the Pennsylvania Marcellus shale play. Endeavour also expanded its credit facility by $75 million under the terms of its Senior Term Loan.

In addition, the Company entered into a letter of credit facility agreement with Commonwealth Bank of Australia in the amount of pounds Sterling 20,600,000 (approximately $33 million). Associated with the letters of credit was the release of the restrictions on approximately $33 million of cash.

Oil & Gas Post

Promote Your Page Too
LINK

Endeavour to Offer Up to $110 Million in Notes

- Endeavour to Offer Up to $110 Million in Notes

Monday, July 18, 2011
Endeavour International Corporation

Endeavour International Corporation today announced that it intends to offer, subject to market and other conditions, up to $110 million aggregate principal amount of its convertible senior notes due 2016 in a private placement to eligible purchasers. Endeavour also intends to grant to the initial purchasers of the notes an option to purchase up to an additional $15 million of notes to cover over-allotments, if any.

Endeavour intends to use substantially all of the net proceeds of this offering to fund its pending acquisition of acreage and related midstream assets in the Marcellus shale play. The remainder, if any, will be used for general corporate purposes, including funding a portion of Endeavour's 2011 capital program.

This press release is neither an offer to sell nor the solicitation of an offer to buy the notes or any other securities. The notes will be offered in the United States only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933 (the "Securities Act"). The notes have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements. This announcement is being issued pursuant to Rule 135c under the Securities Act and shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

Oil & Gas Post

Promote Your Page Too
LINK

Endeavour Expands Marcellus Shale Footprint

- Endeavour Expands Marcellus Shale Footprint

Monday, July 18, 2011
Endeavour International Corporation

Endeavour International Corporation has entered into purchase and sale agreements with SM Energy Company and certain other minority owners to acquire the leasehold and producing interests held by SM Energy and its partners in the Marcellus shale in north central Pennsylvania, as well as a pipeline and related facilities for aggregate consideration of $110 million. The transaction provides Endeavour with significant production and reserve potential on acreage that is adjacent to the Company's existing Marcellus acreage and is readily available for development in one of the most economically attractive shale gas plays in the United States.

The assets include the following:

Approximately 50,000 net acres of leasehold with 100 percent operated working interests in McKean and Potter counties; Current production from three existing wells of approximately three to four million cubic feet of natural gas per day, including the Potato Creek #3H well that initially flowed 11 million cubic feet of gas per day and is expected to recover in excess of 4 billion cubic feet of gas;
100 percent ownership of Potato Creek LLC, which owns a midstream gathering system and related facilities in southern McKean County, including a 10-mile 16" trunkline connected and flowing to Tennessee Gas Pipeline's 24" mainline; and Proprietary and fully processed 3-D seismic survey covering the entire Potato Creek lease block.


Following the completion of the transaction, Endeavour's leasehold interests in the Marcellus Shale will total approximately 93,000 gross (68,000 net) acres. A new 7-year lease will be issued at closing on the key 21,000 net acre Potato Creek block that requires only five wells to be drilled in the first three years. Minimal capital is required over the next three years to hold all acreage in McKean County, including the key Potato Creek leasehold. The transaction is expected to close within 60 days and is expected to be financed with proceeds from the issuance of convertible debt securities.

"This acquisition represents a significant step forward in the growth of our domestic onshore business in a play that offers some of the highest returns in the United States today," said William L. Transier, chairman, chief executive officer and president. "The acreage is located on trend with several major industry developments and complements our existing acreage position in Cameron County immediately to the south. Our development model indicates recoverable natural gas potential from 1.0 to 1.3 trillion cubic feet with more than 300 identified drilling locations on our McKean and Cameron County leasehold. As operator of these assets, including the gathering infrastructure, we have the opportunity to accelerate our development plans in an effort to realize the value of our investment while expanding our position in this three county area."

Operational and Financial Update

Bacchus Update

The Rowan Gorilla VII rig has arrived at the Bacchus field and has commenced drilling operations for the three planned development wells. The Bacchus development is located in the Central UK North Sea and Endeavour has a 30% working interest in the field.

Senior Term Loan

In support of the Company's growth plans, Cyan Partners and certain lenders under the Senior Term Loan have amended the terms of the Company's Senior Term Loan and agreed to expand the facility by $75 million. Endeavour intends to use this additional capital to accelerate its development activities throughout the Company, particularly its Greater Rochelle development and its expanded position in Pennsylvania following the Marcellus acquisition.

Oil & Gas Post

Promote Your Page Too
LINK

Endeavour Briefs Rochelle Deal

Endeavour Briefs Rochelle Deal

Monday, April 18, 2011

Endeavour International Corp.

Endeavour announced agreement of commercial terms for the processing and transportation of East Rochelle production on the Scott Platform, in the Central North Sea. Endeavour, operator of the East Rochelle, plans to award contracts and commence construction of the production facilities immediately.

"This represents an important milestone in the development of the East Rochelle field," said William L. Transier, chairman, chief executive officer and president. "Endeavour can now move forward expeditiously to achieve first production in 2012. This off-take solution is expected to incorporate the production at West Rochelle, the second phase of the development of the Greater Rochelle area, which will be on a simultaneous track with East Rochelle."

The Field Development Plan for East Rochelle was approved by the Department of Energy and Climate Change in February 2011. The plan calls for the subsea development to be linked by a 30- kilometer pipeline to production facilities on the Scott platform. First production from East Rochelle is planned for the second half of 2012. Endeavour holds a 55.6 percent working interest in the East Rochelle development and Nexen Petroleum UK Limited holds the remaining 44.4 percent interest.

Endeavour Redeems 6% of Senior Notes

Endeavour Redeems 6% of Senior Notes

Monday, April 04, 2011

Endeavour International Corp.

 

Endeavour announced that it is redeeming all of its outstanding $81.25 million of 6% Senior Notes due 2012 (the "Notes") with a portion of the proceeds from its recently completed offering of common stock. The redemption will be made in accordance with the terms of the indenture governing the Notes.

Endeavour expects to redeem the Notes on or about April 20, 2011 (the "Redemption Date") at a redemption price of 100% of their principal amount, plus accrued and unpaid interest to the Redemption Date.