Endeavour Reports USD 14.3 Mln Net Loss in 2Q (USA)

Endeavour International Corporation today reported second quarter 2013 net loss, as adjusted of $12.6 million compared to a net loss, as adjusted of $17.4 million for the same period in 2012. On a GAAP basis, net loss for the second quarter of 2013 was $14.3 million as compared to net loss of $51.3 million for the same quarter in 2012.

Sales volumes for the second quarter of 2013 were 14,497 barrels of oil equivalent per day (“boepd”), compared to 4,677 boepd for the same quarter in the prior year. Second quarter 2013 sales numbers were impacted by two liftings at the Alba field during the period. Physical production for the second quarter of 2013 averaged 9,498 boepd compared to 6,437 boepd for the same quarter of 2012.

Direct capital expenditures for the year are expected to be $170 million – $180 million in the U.K. and $10 million – $30 million in the U.S.

Physical production for the third quarter is expected to be in the range of 8,000 – 9,000 boepd due to planned shutdown work on certain U.K. assets during the period.

“We remain focused and are making progress on operational matters related to the commencement of first production at Rochelle and improved performance at Alba,” said William L. Transier, chairman, chief executive officer and president. “The start-up of production from the Bacchus B-1 development is another achievement for the Company. The performance of this field continues to be very positive.”

Operational Update

North Sea

At the Rochelle development, the West Rochelle well was completed and flow tested at the end of June. During a 56-hour flow test, the well flowed up to 60 million standard cubic feet per day, which was the limit of the well test equipment on the drilling rig. Final installation of the subsea pipeline infrastructure has been completed and the well is connected back to the Scott Platform. First production from the West Rochelle well (W-1) is expected in September 2013 following the completion of the annual maintenance period at the Scott Platform. In addition, the Transocean Prospect rig returned to the Rochelle field and commenced drilling the E-2 well at East Rochelle on July 25th. The second well of the development, E-2, is expected to be on-line during the fourth quarter. Endeavour has a 44% working interest in the Rochelle development.

At the Bacchus field, the third planned production well (B-1) has been completed and flowed at 9,600 bopd. The well logged 2,057 feet net oil pay along a horizontal completion segment in high quality Jurassic-aged Fulmar sandstone in the field’s western fault block. Production performance from the three wells was over 17,600 bopd gross. The third well was completed ahead of schedule and below estimated costs. Endeavour has a 30% working interest in the field.

At Alba, the first of three planned development wells at the field was completed in June and a second subsea well was drilled and completed over the past few days. During the planned 28-day summer maintenance program, both the produced water and well-related issues will be addressed and production for the field is expected to improve by year-end. Endeavour has a 25.68% working interest in the Alba field.

North America

In the Piceance Basin in Northwest Colorado, Endeavour successfully drilled, cored and logged its first Wiley federal unit vertical pilot well, targeting the liquids-rich Niobrara and Frontier formations. The Company is evaluating the results and will likely drill a horizontal re-entry later in the year. In this play, Endeavour has accumulated leasehold and drill-to-earn options totaling about 40,000 gross acres.

Direct capital expenditures for the U.K. North Sea are expected to be in the $170 million – $180 million range. As disclosed, the increase from previous capital expenditure estimates are related to cost overruns on Rochelle, primarily from an extended drilling duration of the West well(W-1) and the drilling of the E-2 well at East Rochelle. Direct capital expenditures for the U.S. remain in the range of $10 million – $30 million and are largely discretionary.

Each year during the third quarter, routine maintenance work is performed on platforms and infrastructure in the U.K. North Sea. Due to this planned downtime, physical production levels for the third quarter are expected to be in the range of 8,000 – 9,000 boepd. With the summer maintenance work at the Alba field, there are no scheduled liftings during the third quarter. While the lack of liftings will impact the estimated sales volumes for the third quarter, the Company continues to receive payments monthly for its physical production volumes under its existing marketing agreement.

[mappress]

August 6, 2013