Endeavour Releases Financial and Operational Results for 2010 (USA)

Endeavour International Corporation reported full year 2010 net income, as adjusted of $57.4 million compared to $41.1 million for 2009. Adjusted EBITDA for the full year was $124.8 million compared to $64.6 million last year.

“During 2010 and to date, we have successfully launched an onshore drilling program in the United States, received field development approval at Bacchus and East Rochelle in the United Kingdom and achieved a 419% reserve replacement ratio,” said William L. Transier, chairman, chief executive officer and president. “The purchase of the additional interest in Bacchus and the sale of Cygnus allowed us to capture the value imbedded in our portfolio and effectively transfer capital resources, from a longer cycle capital intensive project, to a near term oil project in the North Sea. The Company’s achievements in 2010 position us for strong growth in the coming years as we ramp up production from our asset portfolio in the US and UK.”

On a GAAP basis, net income was $82.8 million for the fourth quarter of 2010 as compared to ($29.5) million in the same quarter in 2009. Net income was $56.5 million for the year ended December 31, 2010 as compared to a loss of ($41.0) million in the same period in 2009.

Highlights for 2010 and early 2011 are as follows:

Rochelle Development – Endeavour has received approval from the Department of Energy and Climate Change (DECC) for the Rochelle Field Development Plan (FDP), Block 15/27 in the Central North Sea. The approval for Rochelle, now known as East Rochelle, represents phase one of the development of the Greater Rochelle area. The Company is the operator of East Rochelle and holds a 55.6 percent working interest in the project. The current FDP calls for the subsea development to be linked by a 30 kilometer pipeline to production facilities on the Scott Platform. First production is planned for the second half of 2012. The Company is working on integrating West Rochelle, which was discovered in October 2010, into the development plan as phase two with production estimated to begin in 2012.

Sale of Cygnus Reserves in the Southern North Sea – During the fourth quarter, Endeavour received cash proceeds of $110.0 million and booked a gain of approximately $87.0 million from the sale of Cygnus, a southern North Sea gas asset to Bayerngas UK Ltd., the UK oil and gas subsidiary of Bayerngas Norge AS. The Company had previously held a 12.5 percent interest in the project. Significantly, the Company avoided capital commitments approaching $200.0 million that would have been required over the next few years to position Cygnus for production. The transaction closed on October 19, 2010.

Purchase of additional 20 Percent Interest in the Bacchus Development – In November 2010, Endeavour announced that its wholly owned subsidiary Endeavour Energy U.K. Ltd. had signed a definitive agreement to acquire Shell U.K. Limited’s 20 percent working interest in the Bacchus development. The transaction closed in February 2011 and adds approximately 3.4 million barrels of oil equivalent (mmboe) of reserves to Endeavour’s 2P reserves.

The Bacchus project is a three well subsea development with a tie back to the Forties Alpha platform. The project has received Field Development Plan (FDP) approval and first oil is expected in mid 2011. The project remains on schedule and anticipated to produce approximately 4,000 – 5,000 barrels of oil per day net to Endeavour when fully on production. The recent purchase by Endeavour brings the company’s total working interest in Bacchus to 30 percent.

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Source:Endeavour ,March 02, 2011;