Earnings for fourth quarter and fiscal year end 2011.  For a full version of the report go to www.energyxxi.com.

Energy XXI Reports Audited Fiscal Year-end Results

And Provides Operational Update

• Quarterly adjusted EBITDA climbs to a record $166 million as volumes rise 66 percent to a record 42,100 BOE/d
• Fiscal year-end proved reserves climb 54 percent to a record 117 MMBOE
• Net debt reduced more than $200 million since Dec. 17, 2010 acquisition
• Operatorship granted on South Timbalier 54 field, completing transition of acquired assets
• Capital program continues to deliver better-than-expected results

HOUSTON � Aug. 10, 2011 � Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced fiscal fourth-quarter and full-year financial and operating results for the period ended June 30, 2011, and provided an operational update.

For the 2011 fiscal fourth quarter, adjusted earnings before interest, taxes, depreciation, depletion and amortization (adjusted EBITDA) was a record $165.9 million on revenues of $282.8 million, as volumes reached a record quarterly average of 42,100 barrels of oil equivalent per day (BOE/d), 67 percent of which was oil.   These results compared with 2010 fiscal fourth-quarter adjusted EBITDA of $78.8 million on revenues of $139.4 million and volumes of 25,300 BOE/d.  Net income available for common shareholders in the 2011 fiscal fourth quarter totaled $26.8 million, or $0.36 per diluted share.  Excluding special items, net income available for common shareholders in the 2011 fiscal fourth quarter was $35.9 million or $0.48 per diluted share.  Fiscal 2010 fourth-quarter net income available for common shareholders was $10.1 million or $0.20 per diluted share.

For the full fiscal year, adjusted EBITDA reached a record $504.5 million, up 78 percent from the $283.7 million generated in fiscal 2010.  Fiscal 2011 net income available for common shareholders was $27.7 million, or $0.42 per diluted share, on revenues of $859.4 million and production of 34,600 BOE/d.  These results compare with net income available for common shareholders for fiscal 2010 of $23 million $0.56 per diluted share.

            �Energy XXI achieved significant milestones in fiscal 2011, including a 54 percent increase in proved reserves, benefitting from the most significant acquisition in the company�s history,� Energy XXI Chairman and CEO John Schiller said.  �Our oil-focused production portfolio continues to generate free cash flow to fund the capital program and to reduce debt and strengthen our balance sheet.  In just over six months from the closing of our acquisition of Gulf of Mexico shelf properties in December, we were able to reduce net debt by more than $200 million.�

Exploration and Development Activity

On Aug. 9, 2011, Energy XXI gained operatorship of the South Timbalier 54 field, completing the transition of operatorship of the assets acquired in December 2010.  Operational control will allow the company to actively pursue production enhancements while reducing costs.

Within the company�s core producing properties, located offshore Louisiana, the ongoing six-well recompletion program at the South Pass 89 field continues to be successful. As previously announced, the A-15 well was recompleted in June and currently is producing 15.9 million cubic feet of gas per day (MMcf/d) and 192 barrels of condensate per day (2,188 BOE/d net), with 2,750 pounds of flowing tubing pressure.  The second workover in the program, on the A-16 well, was completed and brought on production in mid July at 920 barrels of oil per day and 0.5 MMcf/d (834 BOE/d net), with 1,060 pounds of flowing tubing pressure.  The third workover in the program, the A?17 well, was completed and brought on production in early August at 900 barrels of oil per day and 0.75 MMcf/d (850 BOE/d net), with 1,380 pounds of flowing tubing pressure. The South Pass 89 field was producing approximately 500 BOE/d net prior to the workovers, and now is producing more than 4,550 BOE/d net.

At the Main Pass 73 field, the Onyx well was completed in mid June and placed on production at 1,900 barrels of oil per day and 0.5 MMcf/d (1,600 BOE/d net), with 670 pounds of flowing tubing pressure. The nearby Ashton well was completed and placed on production mid July at 3.1 MMcf/d (450 BOE/d net), with 1,850 pounds of flowing tubing pressure.

At the Grand Isle 16 field, two wells have been recompleted.  The J-30 well was producing 37 BOE/d net prior to the field work in July and now is producing 930 barrels of oil per day and 0.33 MMcf/d (850 BOE/d net) with 150 pounds of flowing tubing pressure.  The J-32 well was recompleted in early August and now is producing 188 barrels of oil per day and 0.6 MMcf/d (250 BOE/d net) with 292 pounds of flowing tubing pressure. Two additional zones in the J-32 were gravel packed and are available to produce through wireline zone changes. The company is evaluating deferring production from the existing zone and moving to the next zone to optimize production.

To date for the Sept. 30 fiscal first quarter, production has approximated 40,700 BOE/d, impacted by downtime associated with pipeline outages and rig movements.  Approximately 4,000 BOE/d was shut in to replace a pipeline acquired in December 2010, which is now complete. Current production approximates 43,500 BOE/d, with another 2,600 BOE/d shut-in due to temporary operational issues such as rig movements and compressor downtime.  As previously reported, onshore properties representing approximately 1,800 BOE/d of net production were sold at the end of June 2011.

Within the shallow-water, ultra-deep Gulf of Mexico shelf program, the McMoRan-operated partnership (in which Energy XXI has various interests) continued during the quarter to drill the Blackbeard East and Lafitte exploratory wells and the offset appraisal well at the Davy Jones discovery.

The Davy Jones offset appraisal well (Davy Jones No. 2), located in 20 feet of water on South Marsh Island Block 234, two and a half miles southwest of the Davy Jones No. 1 discovery well, was drilled to a total depth of 30,546 feet.  As previously reported, log results above 27,300 feet confirmed 120 net feet of hydrocarbon-bearing Wilcox sands, indicating continuity across the major structural features of the Davy Jones discovery.

In June 2011, results from wireline logs of the Cretaceous section below 27,300 feet indicated that the Davy Jones No. 2 well encountered 192 net feet of potential hydrocarbons in the Tuscaloosa and Lower Cretaceous carbonate sections. Flow testing will be required to confirm the potential hydrocarbons and flow rates. A production liner has been set to 30,511 feet and the well has been temporarily suspended while the partnership evaluates development options and prepares to flow test the well by June 2012. Updip locations in a subsequent well to the north are being considered to evaluate the Tuscaloosa sands and Lower Cretaceous carbonates higher on the Davy Jones structure.

            As reported in January 2010, logs identified 200 net feet of pay in multiple Wilcox sands in the Davy Jones No. 1 well on South Marsh Island Block 230. In March 2010, a production liner was set and the well was temporarily abandoned to prepare for completion and flow test, which remain on schedule for late 2011.

            Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). Energy XXI has a 15.8 percent working interest and 12.6 percent net revenue interest in Davy Jones. As of June 30, 2011 the company�s investment in both wells at Davy Jones has totaled about $62 million.

The Blackbeard East ultra-deep exploration well, located in 80 feet of water on South Timbalier Block 144, was drilled to 32,559 feet before encountering mechanical issues.  In July 2011, McMoRan commenced operations to drill a by-pass of the well at approximately 30,700 feet to evaluate targets in the Eocene. The well is permitted to 34,000 feet. Based on interpretations of drilling data obtained prior to the mechanical issue, the well appears to have encountered Sparta sands above the target Wilcox section. Sparta sands are productive onshore in south Louisiana. Wireline logs will be required to evaluate this interval.

            As reported in January 2011, wireline logs indicated that Blackbeard East encountered hydrocarbon-bearing sands in the Oligocene (Frio) with good porosity below 30,000 feet. Down-dip drilling opportunities on the flanks of the structure are being considered to evaluate this section further. The Frio sand section below 30,000 feet is in addition to the 178 net feet of hydrocarbons in the Miocene sands above 25,000 feet announced in December 2010. Pressure and temperature data below the salt weld between 19,500 feet and 24,600 feet indicate that a completion at these depths could utilize conventional equipment and technologies. Energy XXI has an 18 percent working interest and 14.35 percent net revenue interest in Blackbeard East. The company�s investment in Blackbeard East as of June 30, 2011 was about $34 million.

            The Lafitte exploration well commenced drilling on Oct. 3, 2010 towards a proposed total depth of 29,950 feet, targeting Miocene and possibly Oligocene (Frio) objectives below the salt weld.  A liner has been run below the salt to 22,982 feet and the well is currently drilling below 25,600 feet.  Lafitte is located on Eugene Island Block 223 in 140 feet of water.  Energy XXI has an 18 percent working interest and a 14.6 percent net revenue interest in Lafitte. The company�s investment at Lafitte as of June 30, 2011 was about $18 million.

          Information gained from the Blackbeard East and Lafitte wells is expected to assist in developing plans for future operations at Blackbeard West. As previously reported, the Blackbeard West ultra-deep exploratory well on South Timbalier Block 168 was drilled to 32,997 feet in 2008. Logs indicated four potential hydrocarbon-bearing zones that require further evaluation.  The well was temporarily abandoned while the partnership evaluates whether to drill deeper within the same wellbore, drill an offset location or complete the well to test the existing zones.

            A new location within the Blackbeard West unit on Ship Shoal Block 188 has been identified to evaluate the Miocene age sands seen in Blackbeard East above 25,000 feet. Drilling of this ultra-deep well, with a proposed total depth of 26,000 feet, is expected to commence by the end of calendar 2011. The Ship Shoal Block 188 location is approximately four miles west of the Blackbeard West #1 well.  Energy XXI has a 20 percent working interest and a 16 percent net revenue interest in the Blackbeard West unit.

            Netherland, Sewell & Associates, Inc. (NSAI), independent oil and gas reserve engineers, estimated the Davy Jones, Blackbeard East and Blackbeard West structures hold as much as 1.2 billion BOE (162 million BOE net to the company) of combined contingent and prospective resources based on data obtained to-date. Additional data or flow tests will be required before the contingent resources can be moved to the proved, probable or possible reserves categories, and future drilling activity could add significantly to field sizes.

Year-end Reserves

The company�s June 30, 2011 fiscal year-end proved reserves were estimated at 116.6 million barrels of oil equivalent (MMBOE), up 54 percent from the June 30, 2010 fiscal year-end reserves, primarily due to the acquisition of assets from ExxonMobil on Dec. 17, 2010.  Energy XXI added 65.2 MMBOE of proved reserves primarily through acquisition, but also through discoveries, extensions of existing fields and revisions, while producing 12.6 MMBOE and selling properties at fiscal year-end containing 7.9 MMBOE. The all-sources reserves replacement rate was 486 percent.

NSAI provided the year-end reserves estimates.  All of the company�s proved reserves are in the Gulf of Mexico or U.S. Gulf Coast, 70 percent are proved developed, 66 percent are oil and natural gas liquids, and 34 percent are natural gas.  The tables set forth below provide additional information relating to the company�s reserves, including cost-incurred data.

Energy XXI Reports Audited Fiscal Year-end Results

And Provides Operational Update

• Quarterly adjusted EBITDA climbs to a record $166 million as volumes rise 66 percent to a record 42,100 BOE/d
• Fiscal year-end proved reserves climb 54 percent to a record 117 MMBOE
• Net debt reduced more than $200 million since Dec. 17, 2010 acquisition
• Operatorship granted on South Timbalier 54 field, completing transition of acquired assets
• Capital program continues to deliver better-than-expected results

HOUSTON � Aug. 10, 2011 � Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced fiscal fourth-quarter and full-year financial and operating results for the period ended June 30, 2011, and provided an operational update.

For the 2011 fiscal fourth quarter, adjusted earnings before interest, taxes, depreciation, depletion and amortization (adjusted EBITDA) was a record $165.9 million on revenues of $282.8 million, as volumes reached a record quarterly average of 42,100 barrels of oil equivalent per day (BOE/d), 67 percent of which was oil.   These results compared with 2010 fiscal fourth-quarter adjusted EBITDA of $78.8 million on revenues of $139.4 million and volumes of 25,300 BOE/d.  Net income available for common shareholders in the 2011 fiscal fourth quarter totaled $26.8 million, or $0.36 per diluted share.  Excluding special items, net income available for common shareholders in the 2011 fiscal fourth quarter was $35.9 million or $0.48 per diluted share.  Fiscal 2010 fourth-quarter net income available for common shareholders was $10.1 million or $0.20 per diluted share.

For the full fiscal year, adjusted EBITDA reached a record $504.5 million, up 78 percent from the $283.7 million generated in fiscal 2010.  Fiscal 2011 net income available for common shareholders was $27.7 million, or $0.42 per diluted share, on revenues of $859.4 million and production of 34,600 BOE/d.  These results compare with net income available for common shareholders for fiscal 2010 of $23 million $0.56 per diluted share.

            �Energy XXI achieved significant milestones in fiscal 2011, including a 54 percent increase in proved reserves, benefitting from the most significant acquisition in the company�s history,� Energy XXI Chairman and CEO John Schiller said.  �Our oil-focused production portfolio continues to generate free cash flow to fund the capital program and to reduce debt and strengthen our balance sheet.  In just over six months from the closing of our acquisition of Gulf of Mexico shelf properties in December, we were able to reduce net debt by more than $200 million.�

Exploration and Development Activity

On Aug. 9, 2011, Energy XXI gained operatorship of the South Timbalier 54 field, completing the transition of operatorship of the assets acquired in December 2010.  Operational control will allow the company to actively pursue production enhancements while reducing costs.

Within the company�s core producing properties, located offshore Louisiana, the ongoing six-well recompletion program at the South Pass 89 field continues to be successful. As previously announced, the A-15 well was recompleted in June and currently is producing 15.9 million cubic feet of gas per day (MMcf/d) and 192 barrels of condensate per day (2,188 BOE/d net), with 2,750 pounds of flowing tubing pressure.  The second workover in the program, on the A-16 well, was completed and brought on production in mid July at 920 barrels of oil per day and 0.5 MMcf/d (834 BOE/d net), with 1,060 pounds of flowing tubing pressure.  The third workover in the program, the A?17 well, was completed and brought on production in early August at 900 barrels of oil per day and 0.75 MMcf/d (850 BOE/d net), with 1,380 pounds of flowing tubing pressure. The South Pass 89 field was producing approximately 500 BOE/d net prior to the workovers, and now is producing more than 4,550 BOE/d net.

At the Main Pass 73 field, the Onyx well was completed in mid June and placed on production at 1,900 barrels of oil per day and 0.5 MMcf/d (1,600 BOE/d net), with 670 pounds of flowing tubing pressure. The nearby Ashton well was completed and placed on production mid July at 3.1 MMcf/d (450 BOE/d net), with 1,850 pounds of flowing tubing pressure.

At the Grand Isle 16 field, two wells have been recompleted.  The J-30 well was producing 37 BOE/d net prior to the field work in July and now is producing 930 barrels of oil per day and 0.33 MMcf/d (850 BOE/d net) with 150 pounds of flowing tubing pressure.  The J-32 well was recompleted in early August and now is producing 188 barrels of oil per day and 0.6 MMcf/d (250 BOE/d net) with 292 pounds of flowing tubing pressure. Two additional zones in the J-32 were gravel packed and are available to produce through wireline zone changes. The company is evaluating deferring production from the existing zone and moving to the next zone to optimize production.

To date for the Sept. 30 fiscal first quarter, production has approximated 40,700 BOE/d, impacted by downtime associated with pipeline outages and rig movements.  Approximately 4,000 BOE/d was shut in to replace a pipeline acquired in December 2010, which is now complete. Current production approximates 43,500 BOE/d, with another 2,600 BOE/d shut-in due to temporary operational issues such as rig movements and compressor downtime.  As previously reported, onshore properties representing approximately 1,800 BOE/d of net production were sold at the end of June 2011.

Within the shallow-water, ultra-deep Gulf of Mexico shelf program, the McMoRan-operated partnership (in which Energy XXI has various interests) continued during the quarter to drill the Blackbeard East and Lafitte exploratory wells and the offset appraisal well at the Davy Jones discovery.

The Davy Jones offset appraisal well (Davy Jones No. 2), located in 20 feet of water on South Marsh Island Block 234, two and a half miles southwest of the Davy Jones No. 1 discovery well, was drilled to a total depth of 30,546 feet.  As previously reported, log results above 27,300 feet confirmed 120 net feet of hydrocarbon-bearing Wilcox sands, indicating continuity across the major structural features of the Davy Jones discovery.

In June 2011, results from wireline logs of the Cretaceous section below 27,300 feet indicated that the Davy Jones No. 2 well encountered 192 net feet of potential hydrocarbons in the Tuscaloosa and Lower Cretaceous carbonate sections. Flow testing will be required to confirm the potential hydrocarbons and flow rates. A production liner has been set to 30,511 feet and the well has been temporarily suspended while the partnership evaluates development options and prepares to flow test the well by June 2012. Updip locations in a subsequent well to the north are being considered to evaluate the Tuscaloosa sands and Lower Cretaceous carbonates higher on the Davy Jones structure.

            As reported in January 2010, logs identified 200 net feet of pay in multiple Wilcox sands in the Davy Jones No. 1 well on South Marsh Island Block 230. In March 2010, a production liner was set and the well was temporarily abandoned to prepare for completion and flow test, which remain on schedule for late 2011.

            Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). Energy XXI has a 15.8 percent working interest and 12.6 percent net revenue interest in Davy Jones. As of June 30, 2011 the company�s investment in both wells at Davy Jones has totaled about $62 million.

The Blackbeard East ultra-deep exploration well, located in 80 feet of water on South Timbalier Block 144, was drilled to 32,559 feet before encountering mechanical issues.  In July 2011, McMoRan commenced operations to drill a by-pass of the well at approximately 30,700 feet to evaluate targets in the Eocene. The well is permitted to 34,000 feet. Based on interpretations of drilling data obtained prior to the mechanical issue, the well appears to have encountered Sparta sands above the target Wilcox section. Sparta sands are productive onshore in south Louisiana. Wireline logs will be required to evaluate this interval.

            As reported in January 2011, wireline logs indicated that Blackbeard East encountered hydrocarbon-bearing sands in the Oligocene (Frio) with good porosity below 30,000 feet. Down-dip drilling opportunities on the flanks of the structure are being considered to evaluate this section further. The Frio sand section below 30,000 feet is in addition to the 178 net feet of hydrocarbons in the Miocene sands above 25,000 feet announced in December 2010. Pressure and temperature data below the salt weld between 19,500 feet and 24,600 feet indicate that a completion at these depths could utilize conventional equipment and technologies. Energy XXI has an 18 percent working interest and 14.35 percent net revenue interest in Blackbeard East. The company�s investment in Blackbeard East as of June 30, 2011 was about $34 million.

            The Lafitte exploration well commenced drilling on Oct. 3, 2010 towards a proposed total depth of 29,950 feet, targeting Miocene and possibly Oligocene (Frio) objectives below the salt weld.  A liner has been run below the salt to 22,982 feet and the well is currently drilling below 25,600 feet.  Lafitte is located on Eugene Island Block 223 in 140 feet of water.  Energy XXI has an 18 percent working interest and a 14.6 percent net revenue interest in Lafitte. The company�s investment at Lafitte as of June 30, 2011 was about $18 million.

          Information gained from the Blackbeard East and Lafitte wells is expected to assist in developing plans for future operations at Blackbeard West. As previously reported, the Blackbeard West ultra-deep exploratory well on South Timbalier Block 168 was drilled to 32,997 feet in 2008. Logs indicated four potential hydrocarbon-bearing zones that require further evaluation.  The well was temporarily abandoned while the partnership evaluates whether to drill deeper within the same wellbore, drill an offset location or complete the well to test the existing zones.

            A new location within the Blackbeard West unit on Ship Shoal Block 188 has been identified to evaluate the Miocene age sands seen in Blackbeard East above 25,000 feet. Drilling of this ultra-deep well, with a proposed total depth of 26,000 feet, is expected to commence by the end of calendar 2011. The Ship Shoal Block 188 location is approximately four miles west of the Blackbeard West #1 well.  Energy XXI has a 20 percent working interest and a 16 percent net revenue interest in the Blackbeard West unit.

            Netherland, Sewell & Associates, Inc. (NSAI), independent oil and gas reserve engineers, estimated the Davy Jones, Blackbeard East and Blackbeard West structures hold as much as 1.2 billion BOE (162 million BOE net to the company) of combined contingent and prospective resources based on data obtained to-date. Additional data or flow tests will be required before the contingent resources can be moved to the proved, probable or possible reserves categories, and future drilling activity could add significantly to field sizes.

Year-end Reserves

The company�s June 30, 2011 fiscal year-end proved reserves were estimated at 116.6 million barrels of oil equivalent (MMBOE), up 54 percent from the June 30, 2010 fiscal year-end reserves, primarily due to the acquisition of assets from ExxonMobil on Dec. 17, 2010.  Energy XXI added 65.2 MMBOE of proved reserves primarily through acquisition, but also through discoveries, extensions of existing fields and revisions, while producing 12.6 MMBOE and selling properties at fiscal year-end containing 7.9 MMBOE. The all-sources reserves replacement rate was 486 percent.

NSAI provided the year-end reserves estimates.  All of the company�s proved reserves are in the Gulf of Mexico or U.S. Gulf Coast, 70 percent are proved developed, 66 percent are oil and natural gas liquids, and 34 percent are natural gas.  The tables set forth below provide additional information relating to the company�s reserves, including cost-incurred data.

The following fiscal year-ended June 30, 2011 estimated proved, probable and possible reserves attributable to the company�s net interests in oil and gas properties were prepared by NSAI, in conjunction with in-house reservoir engineers.

(1) Before tax, as of June 30, 2011, using prices of $90.09 per barrel of oil and $4.21 per MMBTU of gas, before differentials, based on the SEC-prescribed first-of-the-month average prices for the preceding 12 months.

 Capital Program Estimates

The company�s Board of Directors has approved an initial fiscal 2012 capital spending program with a range of $380 million to $450 million, compared to fiscal 2011 capital expenditures of $360 million.  Approximately 8 percent of the fiscal 2012 budget targets exploration drilling on four projects, 39 percent targets development drilling on 22 projects, and 23 percent is allocated to the ultra-deep exploration and development program.  Another 17 percent is allocated for recompletions, facilities and abandonment expenses.  The remainder is for capitalized administration and other costs.

Energy XXI Reports Audited Fiscal Year-end Results

And Provides Operational Update

• Quarterly adjusted EBITDA climbs to a record $166 million as volumes rise 66 percent to a record 42,100 BOE/d
• Fiscal year-end proved reserves climb 54 percent to a record 117 MMBOE
• Net debt reduced more than $200 million since Dec. 17, 2010 acquisition
• Operatorship granted on South Timbalier 54 field, completing transition of acquired assets
• Capital program continues to deliver better-than-expected results

HOUSTON � Aug. 10, 2011 � Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced fiscal fourth-quarter and full-year financial and operating results for the period ended June 30, 2011, and provided an operational update.

For the 2011 fiscal fourth quarter, adjusted earnings before interest, taxes, depreciation, depletion and amortization (adjusted EBITDA) was a record $165.9 million on revenues of $282.8 million, as volumes reached a record quarterly average of 42,100 barrels of oil equivalent per day (BOE/d), 67 percent of which was oil.   These results compared with 2010 fiscal fourth-quarter adjusted EBITDA of $78.8 million on revenues of $139.4 million and volumes of 25,300 BOE/d.  Net income available for common shareholders in the 2011 fiscal fourth quarter totaled $26.8 million, or $0.36 per diluted share.  Excluding special items, net income available for common shareholders in the 2011 fiscal fourth quarter was $35.9 million or $0.48 per diluted share.  Fiscal 2010 fourth-quarter net income available for common shareholders was $10.1 million or $0.20 per diluted share.

For the full fiscal year, adjusted EBITDA reached a record $504.5 million, up 78 percent from the $283.7 million generated in fiscal 2010.  Fiscal 2011 net income available for common shareholders was $27.7 million, or $0.42 per diluted share, on revenues of $859.4 million and production of 34,600 BOE/d.  These results compare with net income available for common shareholders for fiscal 2010 of $23 million $0.56 per diluted share.

            �Energy XXI achieved significant milestones in fiscal 2011, including a 54 percent increase in proved reserves, benefitting from the most significant acquisition in the company�s history,� Energy XXI Chairman and CEO John Schiller said.  �Our oil-focused production portfolio continues to generate free cash flow to fund the capital program and to reduce debt and strengthen our balance sheet.  In just over six months from the closing of our acquisition of Gulf of Mexico shelf properties in December, we were able to reduce net debt by more than $200 million.�

Exploration and Development Activity

On Aug. 9, 2011, Energy XXI gained operatorship of the South Timbalier 54 field, completing the transition of operatorship of the assets acquired in December 2010.  Operational control will allow the company to actively pursue production enhancements while reducing costs.

Within the company�s core producing properties, located offshore Louisiana, the ongoing six-well recompletion program at the South Pass 89 field continues to be successful. As previously announced, the A-15 well was recompleted in June and currently is producing 15.9 million cubic feet of gas per day (MMcf/d) and 192 barrels of condensate per day (2,188 BOE/d net), with 2,750 pounds of flowing tubing pressure.  The second workover in the program, on the A-16 well, was completed and brought on production in mid July at 920 barrels of oil per day and 0.5 MMcf/d (834 BOE/d net), with 1,060 pounds of flowing tubing pressure.  The third workover in the program, the A?17 well, was completed and brought on production in early August at 900 barrels of oil per day and 0.75 MMcf/d (850 BOE/d net), with 1,380 pounds of flowing tubing pressure. The South Pass 89 field was producing approximately 500 BOE/d net prior to the workovers, and now is producing more than 4,550 BOE/d net.

At the Main Pass 73 field, the Onyx well was completed in mid June and placed on production at 1,900 barrels of oil per day and 0.5 MMcf/d (1,600 BOE/d net), with 670 pounds of flowing tubing pressure. The nearby Ashton well was completed and placed on production mid July at 3.1 MMcf/d (450 BOE/d net), with 1,850 pounds of flowing tubing pressure.

At the Grand Isle 16 field, two wells have been recompleted.  The J-30 well was producing 37 BOE/d net prior to the field work in July and now is producing 930 barrels of oil per day and 0.33 MMcf/d (850 BOE/d net) with 150 pounds of flowing tubing pressure.  The J-32 well was recompleted in early August and now is producing 188 barrels of oil per day and 0.6 MMcf/d (250 BOE/d net) with 292 pounds of flowing tubing pressure. Two additional zones in the J-32 were gravel packed and are available to produce through wireline zone changes. The company is evaluating deferring production from the existing zone and moving to the next zone to optimize production.

To date for the Sept. 30 fiscal first quarter, production has approximated 40,700 BOE/d, impacted by downtime associated with pipeline outages and rig movements.  Approximately 4,000 BOE/d was shut in to replace a pipeline acquired in December 2010, which is now complete. Current production approximates 43,500 BOE/d, with another 2,600 BOE/d shut-in due to temporary operational issues such as rig movements and compressor downtime.  As previously reported, onshore properties representing approximately 1,800 BOE/d of net production were sold at the end of June 2011.

Within the shallow-water, ultra-deep Gulf of Mexico shelf program, the McMoRan-operated partnership (in which Energy XXI has various interests) continued during the quarter to drill the Blackbeard East and Lafitte exploratory wells and the offset appraisal well at the Davy Jones discovery.

The Davy Jones offset appraisal well (Davy Jones No. 2), located in 20 feet of water on South Marsh Island Block 234, two and a half miles southwest of the Davy Jones No. 1 discovery well, was drilled to a total depth of 30,546 feet.  As previously reported, log results above 27,300 feet confirmed 120 net feet of hydrocarbon-bearing Wilcox sands, indicating continuity across the major structural features of the Davy Jones discovery.

In June 2011, results from wireline logs of the Cretaceous section below 27,300 feet indicated that the Davy Jones No. 2 well encountered 192 net feet of potential hydrocarbons in the Tuscaloosa and Lower Cretaceous carbonate sections. Flow testing will be required to confirm the potential hydrocarbons and flow rates. A production liner has been set to 30,511 feet and the well has been temporarily suspended while the partnership evaluates development options and prepares to flow test the well by June 2012. Updip locations in a subsequent well to the north are being considered to evaluate the Tuscaloosa sands and Lower Cretaceous carbonates higher on the Davy Jones structure.

            As reported in January 2010, logs identified 200 net feet of pay in multiple Wilcox sands in the Davy Jones No. 1 well on South Marsh Island Block 230. In March 2010, a production liner was set and the well was temporarily abandoned to prepare for completion and flow test, which remain on schedule for late 2011.

            Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). Energy XXI has a 15.8 percent working interest and 12.6 percent net revenue interest in Davy Jones. As of June 30, 2011 the company�s investment in both wells at Davy Jones has totaled about $62 million.

The Blackbeard East ultra-deep exploration well, located in 80 feet of water on South Timbalier Block 144, was drilled to 32,559 feet before encountering mechanical issues.  In July 2011, McMoRan commenced operations to drill a by-pass of the well at approximately 30,700 feet to evaluate targets in the Eocene. The well is permitted to 34,000 feet. Based on interpretations of drilling data obtained prior to the mechanical issue, the well appears to have encountered Sparta sands above the target Wilcox section. Sparta sands are productive onshore in south Louisiana. Wireline logs will be required to evaluate this interval.

            As reported in January 2011, wireline logs indicated that Blackbeard East encountered hydrocarbon-bearing sands in the Oligocene (Frio) with good porosity below 30,000 feet. Down-dip drilling opportunities on the flanks of the structure are being considered to evaluate this section further. The Frio sand section below 30,000 feet is in addition to the 178 net feet of hydrocarbons in the Miocene sands above 25,000 feet announced in December 2010. Pressure and temperature data below the salt weld between 19,500 feet and 24,600 feet indicate that a completion at these depths could utilize conventional equipment and technologies. Energy XXI has an 18 percent working interest and 14.35 percent net revenue interest in Blackbeard East. The company�s investment in Blackbeard East as of June 30, 2011 was about $34 million.

            The Lafitte exploration well commenced drilling on Oct. 3, 2010 towards a proposed total depth of 29,950 feet, targeting Miocene and possibly Oligocene (Frio) objectives below the salt weld.  A liner has been run below the salt to 22,982 feet and the well is currently drilling below 25,600 feet.  Lafitte is located on Eugene Island Block 223 in 140 feet of water.  Energy XXI has an 18 percent working interest and a 14.6 percent net revenue interest in Lafitte. The company�s investment at Lafitte as of June 30, 2011 was about $18 million.

          Information gained from the Blackbeard East and Lafitte wells is expected to assist in developing plans for future operations at Blackbeard West. As previously reported, the Blackbeard West ultra-deep exploratory well on South Timbalier Block 168 was drilled to 32,997 feet in 2008. Logs indicated four potential hydrocarbon-bearing zones that require further evaluation.  The well was temporarily abandoned while the partnership evaluates whether to drill deeper within the same wellbore, drill an offset location or complete the well to test the existing zones.

            A new location within the Blackbeard West unit on Ship Shoal Block 188 has been identified to evaluate the Miocene age sands seen in Blackbeard East above 25,000 feet. Drilling of this ultra-deep well, with a proposed total depth of 26,000 feet, is expected to commence by the end of calendar 2011. The Ship Shoal Block 188 location is approximately four miles west of the Blackbeard West #1 well.  Energy XXI has a 20 percent working interest and a 16 percent net revenue interest in the Blackbeard West unit.

            Netherland, Sewell & Associates, Inc. (NSAI), independent oil and gas reserve engineers, estimated the Davy Jones, Blackbeard East and Blackbeard West structures hold as much as 1.2 billion BOE (162 million BOE net to the company) of combined contingent and prospective resources based on data obtained to-date. Additional data or flow tests will be required before the contingent resources can be moved to the proved, probable or possible reserves categories, and future drilling activity could add significantly to field sizes.

Year-end Reserves

The company�s June 30, 2011 fiscal year-end proved reserves were estimated at 116.6 million barrels of oil equivalent (MMBOE), up 54 percent from the June 30, 2010 fiscal year-end reserves, primarily due to the acquisition of assets from ExxonMobil on Dec. 17, 2010.  Energy XXI added 65.2 MMBOE of proved reserves primarily through acquisition, but also through discoveries, extensions of existing fields and revisions, while producing 12.6 MMBOE and selling properties at fiscal year-end containing 7.9 MMBOE. The all-sources reserves replacement rate was 486 percent.

NSAI provided the year-end reserves estimates.  All of the company�s proved reserves are in the Gulf of Mexico or U.S. Gulf Coast, 70 percent are proved developed, 66 percent are oil and natural gas liquids, and 34 percent are natural gas.  The tables set forth below provide additional information relating to the company�s reserves, including cost-incurred data.

Energy XXI Reports Audited Fiscal Year-end Results

And Provides Operational Update

• Quarterly adjusted EBITDA climbs to a record $166 million as volumes rise 66 percent to a record 42,100 BOE/d
• Fiscal year-end proved reserves climb 54 percent to a record 117 MMBOE
• Net debt reduced more than $200 million since Dec. 17, 2010 acquisition
• Operatorship granted on South Timbalier 54 field, completing transition of acquired assets
• Capital program continues to deliver better-than-expected results

HOUSTON � Aug. 10, 2011 � Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced fiscal fourth-quarter and full-year financial and operating results for the period ended June 30, 2011, and provided an operational update.

For the 2011 fiscal fourth quarter, adjusted earnings before interest, taxes, depreciation, depletion and amortization (adjusted EBITDA) was a record $165.9 million on revenues of $282.8 million, as volumes reached a record quarterly average of 42,100 barrels of oil equivalent per day (BOE/d), 67 percent of which was oil.   These results compared with 2010 fiscal fourth-quarter adjusted EBITDA of $78.8 million on revenues of $139.4 million and volumes of 25,300 BOE/d.  Net income available for common shareholders in the 2011 fiscal fourth quarter totaled $26.8 million, or $0.36 per diluted share.  Excluding special items, net income available for common shareholders in the 2011 fiscal fourth quarter was $35.9 million or $0.48 per diluted share.  Fiscal 2010 fourth-quarter net income available for common shareholders was $10.1 million or $0.20 per diluted share.

For the full fiscal year, adjusted EBITDA reached a record $504.5 million, up 78 percent from the $283.7 million generated in fiscal 2010.  Fiscal 2011 net income available for common shareholders was $27.7 million, or $0.42 per diluted share, on revenues of $859.4 million and production of 34,600 BOE/d.  These results compare with net income available for common shareholders for fiscal 2010 of $23 million $0.56 per diluted share.

            �Energy XXI achieved significant milestones in fiscal 2011, including a 54 percent increase in proved reserves, benefitting from the most significant acquisition in the company�s history,� Energy XXI Chairman and CEO John Schiller said.  �Our oil-focused production portfolio continues to generate free cash flow to fund the capital program and to reduce debt and strengthen our balance sheet.  In just over six months from the closing of our acquisition of Gulf of Mexico shelf properties in December, we were able to reduce net debt by more than $200 million.�

Exploration and Development Activity

On Aug. 9, 2011, Energy XXI gained operatorship of the South Timbalier 54 field, completing the transition of operatorship of the assets acquired in December 2010.  Operational control will allow the company to actively pursue production enhancements while reducing costs.

Within the company�s core producing properties, located offshore Louisiana, the ongoing six-well recompletion program at the South Pass 89 field continues to be successful. As previously announced, the A-15 well was recompleted in June and currently is producing 15.9 million cubic feet of gas per day (MMcf/d) and 192 barrels of condensate per day (2,188 BOE/d net), with 2,750 pounds of flowing tubing pressure.  The second workover in the program, on the A-16 well, was completed and brought on production in mid July at 920 barrels of oil per day and 0.5 MMcf/d (834 BOE/d net), with 1,060 pounds of flowing tubing pressure.  The third workover in the program, the A?17 well, was completed and brought on production in early August at 900 barrels of oil per day and 0.75 MMcf/d (850 BOE/d net), with 1,380 pounds of flowing tubing pressure. The South Pass 89 field was producing approximately 500 BOE/d net prior to the workovers, and now is producing more than 4,550 BOE/d net.

At the Main Pass 73 field, the Onyx well was completed in mid June and placed on production at 1,900 barrels of oil per day and 0.5 MMcf/d (1,600 BOE/d net), with 670 pounds of flowing tubing pressure. The nearby Ashton well was completed and placed on production mid July at 3.1 MMcf/d (450 BOE/d net), with 1,850 pounds of flowing tubing pressure.

At the Grand Isle 16 field, two wells have been recompleted.  The J-30 well was producing 37 BOE/d net prior to the field work in July and now is producing 930 barrels of oil per day and 0.33 MMcf/d (850 BOE/d net) with 150 pounds of flowing tubing pressure.  The J-32 well was recompleted in early August and now is producing 188 barrels of oil per day and 0.6 MMcf/d (250 BOE/d net) with 292 pounds of flowing tubing pressure. Two additional zones in the J-32 were gravel packed and are available to produce through wireline zone changes. The company is evaluating deferring production from the existing zone and moving to the next zone to optimize production.

To date for the Sept. 30 fiscal first quarter, production has approximated 40,700 BOE/d, impacted by downtime associated with pipeline outages and rig movements.  Approximately 4,000 BOE/d was shut in to replace a pipeline acquired in December 2010, which is now complete. Current production approximates 43,500 BOE/d, with another 2,600 BOE/d shut-in due to temporary operational issues such as rig movements and compressor downtime.  As previously reported, onshore properties representing approximately 1,800 BOE/d of net production were sold at the end of June 2011.

Within the shallow-water, ultra-deep Gulf of Mexico shelf program, the McMoRan-operated partnership (in which Energy XXI has various interests) continued during the quarter to drill the Blackbeard East and Lafitte exploratory wells and the offset appraisal well at the Davy Jones discovery.

The Davy Jones offset appraisal well (Davy Jones No. 2), located in 20 feet of water on South Marsh Island Block 234, two and a half miles southwest of the Davy Jones No. 1 discovery well, was drilled to a total depth of 30,546 feet.  As previously reported, log results above 27,300 feet confirmed 120 net feet of hydrocarbon-bearing Wilcox sands, indicating continuity across the major structural features of the Davy Jones discovery.

In June 2011, results from wireline logs of the Cretaceous section below 27,300 feet indicated that the Davy Jones No. 2 well encountered 192 net feet of potential hydrocarbons in the Tuscaloosa and Lower Cretaceous carbonate sections. Flow testing will be required to confirm the potential hydrocarbons and flow rates. A production liner has been set to 30,511 feet and the well has been temporarily suspended while the partnership evaluates development options and prepares to flow test the well by June 2012. Updip locations in a subsequent well to the north are being considered to evaluate the Tuscaloosa sands and Lower Cretaceous carbonates higher on the Davy Jones structure.

            As reported in January 2010, logs identified 200 net feet of pay in multiple Wilcox sands in the Davy Jones No. 1 well on South Marsh Island Block 230. In March 2010, a production liner was set and the well was temporarily abandoned to prepare for completion and flow test, which remain on schedule for late 2011.

            Davy Jones involves a large ultra-deep structure encompassing four OCS lease blocks (20,000 acres). Energy XXI has a 15.8 percent working interest and 12.6 percent net revenue interest in Davy Jones. As of June 30, 2011 the company�s investment in both wells at Davy Jones has totaled about $62 million.

The Blackbeard East ultra-deep exploration well, located in 80 feet of water on South Timbalier Block 144, was drilled to 32,559 feet before encountering mechanical issues.  In July 2011, McMoRan commenced operations to drill a by-pass of the well at approximately 30,700 feet to evaluate targets in the Eocene. The well is permitted to 34,000 feet. Based on interpretations of drilling data obtained prior to the mechanical issue, the well appears to have encountered Sparta sands above the target Wilcox section. Sparta sands are productive onshore in south Louisiana. Wireline logs will be required to evaluate this interval.

            As reported in January 2011, wireline logs indicated that Blackbeard East encountered hydrocarbon-bearing sands in the Oligocene (Frio) with good porosity below 30,000 feet. Down-dip drilling opportunities on the flanks of the structure are being considered to evaluate this section further. The Frio sand section below 30,000 feet is in addition to the 178 net feet of hydrocarbons in the Miocene sands above 25,000 feet announced in December 2010. Pressure and temperature data below the salt weld between 19,500 feet and 24,600 feet indicate that a completion at these depths could utilize conventional equipment and technologies. Energy XXI has an 18 percent working interest and 14.35 percent net revenue interest in Blackbeard East. The company�s investment in Blackbeard East as of June 30, 2011 was about $34 million.

            The Lafitte exploration well commenced drilling on Oct. 3, 2010 towards a proposed total depth of 29,950 feet, targeting Miocene and possibly Oligocene (Frio) objectives below the salt weld.  A liner has been run below the salt to 22,982 feet and the well is currently drilling below 25,600 feet.  Lafitte is located on Eugene Island Block 223 in 140 feet of water.  Energy XXI has an 18 percent working interest and a 14.6 percent net revenue interest in Lafitte. The company�s investment at Lafitte as of June 30, 2011 was about $18 million.

          Information gained from the Blackbeard East and Lafitte wells is expected to assist in developing plans for future operations at Blackbeard West. As previously reported, the Blackbeard West ultra-deep exploratory well on South Timbalier Block 168 was drilled to 32,997 feet in 2008. Logs indicated four potential hydrocarbon-bearing zones that require further evaluation.  The well was temporarily abandoned while the partnership evaluates whether to drill deeper within the same wellbore, drill an offset location or complete the well to test the existing zones.

            A new location within the Blackbeard West unit on Ship Shoal Block 188 has been identified to evaluate the Miocene age sands seen in Blackbeard East above 25,000 feet. Drilling of this ultra-deep well, with a proposed total depth of 26,000 feet, is expected to commence by the end of calendar 2011. The Ship Shoal Block 188 location is approximately four miles west of the Blackbeard West #1 well.  Energy XXI has a 20 percent working interest and a 16 percent net revenue interest in the Blackbeard West unit.

            Netherland, Sewell & Associates, Inc. (NSAI), independent oil and gas reserve engineers, estimated the Davy Jones, Blackbeard East and Blackbeard West structures hold as much as 1.2 billion BOE (162 million BOE net to the company) of combined contingent and prospective resources based on data obtained to-date. Additional data or flow tests will be required before the contingent resources can be moved to the proved, probable or possible reserves categories, and future drilling activity could add significantly to field sizes.

Year-end Reserves

The company�s June 30, 2011 fiscal year-end proved reserves were estimated at 116.6 million barrels of oil equivalent (MMBOE), up 54 percent from the June 30, 2010 fiscal year-end reserves, primarily due to the acquisition of assets from ExxonMobil on Dec. 17, 2010.  Energy XXI added 65.2 MMBOE of proved reserves primarily through acquisition, but also through discoveries, extensions of existing fields and revisions, while producing 12.6 MMBOE and selling properties at fiscal year-end containing 7.9 MMBOE. The all-sources reserves replacement rate was 486 percent.

NSAI provided the year-end reserves estimates.  All of the company�s proved reserves are in the Gulf of Mexico or U.S. Gulf Coast, 70 percent are proved developed, 66 percent are oil and natural gas liquids, and 34 percent are natural gas.  The tables set forth below provide additional information relating to the company�s reserves, including cost-incurred data.

The following fiscal year-ended June 30, 2011 estimated proved, probable and possible reserves attributable to the company�s net interests in oil and gas properties were prepared by NSAI, in conjunction with in-house reservoir engineers.

(1) Before tax, as of June 30, 2011, using prices of $90.09 per barrel of oil and $4.21 per MMBTU of gas, before differentials, based on the SEC-prescribed first-of-the-month average prices for the preceding 12 months.

 Capital Program Estimates

The company�s Board of Directors has approved an initial fiscal 2012 capital spending program with a range of $380 million to $450 million, compared to fiscal 2011 capital expenditures of $360 million.  Approximately 8 percent of the fiscal 2012 budget targets exploration drilling on four projects, 39 percent targets development drilling on 22 projects, and 23 percent is allocated to the ultra-deep exploration and development program.  Another 17 percent is allocated for recompletions, facilities and abandonment expenses.  The remainder is for capitalized administration and other costs.