Energy XXI Reports Fiscal Third-Quarter Results

And Provides Operational Update

• Year-over-year quarterly volumes rise 63 percent, EBITDA climbs 78 percent
• Debt reduced $80 million in the quarter
• Exploration and development program advances

HOUSTON � April 27, 2011 � Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced fiscal third-quarter results for the period ended March 31, 2011 and provided an operational update.

            For the 2011 fiscal third quarter, Energy XXI reported earnings before other income (expense), taxes, depreciation, depletion and amortization (adjusted EBITDA) of $155.4 million, compared with $87.3 million in the 2010 fiscal third quarter.  Net income attributable to common shareholders for the 2011 fiscal third quarter was $14 million, or $0.19 per diluted share, on revenues of $258.6 million and production of 41,400 barrels of oil equivalent per day (BOE/d).  The results include a $10.9 million after-tax loss on the retirement of debt during the quarter.  Oil represented 66 percent of the volumes and 88 percent of pre-hedge revenues during the quarter.  In the 2010 fiscal third quarter, the company had net income attributable to common shareholders of $9.1 million, or $0.18 per diluted share, on revenues of $150.1 million and production of 25,400 BOE/d.

            �Energy XXI clearly is benefitting from the transformational acquisition of ExxonMobil Gulf of Mexico shelf assets in December 2010.  Increased production and cash flow drove continued balance sheet strengthening, with an $80 million reduction in debt during the quarter, while exploration and development activities highlighted a good quarter for the company,� Energy XXI Chairman and CEO John Schiller said.  �Early success in operating the acquired properties lends encouragement for our future capital program.�

Production Update

Production in the 2011 fiscal third quarter averaged 41,400 BOE/d.  Volumes were positively affected by the December acquisition of Gulf of Mexico properties, partially offset by temporary  issues such as pipeline and processing outages, delays in gaining operatorship of certain of the acquired properties, and freezing production equipment early in the quarter.

Exploration and Development Activity

As previously announced, Energy XXI has remained active in developing its core producing properties and pursuing high-potential exploration.  Summarized below is the status of select wells.

• The McMoRan-operated Valentine Pontiff well in St. Mary Parish, Louisiana, which was tested at a gross rate of 54 million cubic feet of natural gas per day (MMcf/d) (approximately 8 MMcf/d net to Energy XXI),  is being placed online today.  Energy XXI has an 18.75 percent working interest and a 15 percent net revenue interest in the well.

• At Main Pass 72, the Ashton well successfully penetrated seven hydrocarbon-bearing sands totaling 300 net feet of pay before entering the salt body at 6,380 feet. Success at the Ashton well, which is the company's first test of its reinterpreted salt-related seismic data  in the Main Pass 72 field, sets up other opportunities nearby, including the Onyx well that is expected to start drilling next month.

• The Davy Jones offset well, which has been drilled to 30,546 feet, is in the process of being logged to evaluate the established Wilcox pay sands as well as the deeper Cretaceous section. Energy XXI has a 15.8 percent working interest and 12.6 percent net revenue interest in Davy Jones.

• The Blackbeard East ultra-deep exploration well at South Timbalier Block 144 is continuing to make progress recovering drill pipe and tools stuck in the hole while drilling the well to 32,559 feet.  The operator has washed over and recovered 1,866 feet of stuck pipe and is proceeding with recovery efforts.  The top of the stuck pipe currently is at 27,526 feet, with the drill bit at about 28,900 feet.  Energy XXI has an 18 percent working interest and 14.35 percent net revenue interest in Blackbeard East.

• The Lafitte ultra-deep exploration well on Eugene Island Block 223 currently is drilling below 21,185 feet towards a proposed total depth of 29,950 feet.  Energy XXI has an 18 percent working interest and a 14.6 percent net revenue interest in Lafitte.

Capital Expenditures

During the 2011 fiscal third quarter, capital expenditures, excluding acquisitions but including plug-and-abandonment costs, totaled $68.4 million, with $25 million in exploration and $43.4 million in development and other investments.  The board of directors has approved an increase in the fiscal 2011 capital program, up to $380 million from the original $250 million, largely related to the acquired Gulf of Mexico properties and the shallow-water ultra-deep drilling program.

Conference Call Tomorrow, April 28,  at 9 a.m. CDT, 3 p.m. London Time

Energy XXI will host its quarterly conference call tomorrow, April 28, at 9 a.m. CDT (3 p.m. London time). The dial-in numbers are 1 (631) 813-4724 (U.S.) and (0) 80 0051 3806 (U.K.), and the confirmation code is 37266770. For complete instructions on how to actively participate in the conference call, or to listen to the live audio webcast or a replay, please refer to www.EnergyXXI.com.