Energy XXI Reports Audited Fiscal Year-end Results

And Provides Operational Update

• Fiscal 2012 EBITDA rises 69% to a record $851 million
• Production Increases 27% for the year
• Net debt to capitalization reduced to 39%
• Proved reserves climb to 120 MMBOE, 71% liquids

HOUSTON � Aug. 8, 2012 � Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced fiscal fourth-quarter and full-year financial and operating results for the period ended June 30, 2012, and provided an operational update.

For the 2012 fiscal fourth quarter, adjusted earnings before interest, taxes, depreciation, depletion and amortization (adjusted EBITDA) was a $223.1 million on revenues of $341.9 million, as volumes reached a record quarterly average of 47,600 barrels of oil equivalent per day (BOE/d), 68 percent of which was oil.  These results compare with 2011 fiscal fourth-quarter adjusted EBITDA of $165.9 million on revenues of $282.8 million and volumes of 42,100 BOE/d, up 34 percent, 21 percent and 13 percent, respectively.  Net income available for common shareholders in the 2012 fiscal fourth quarter totaled $78.3 million, or $0.93 per diluted share, compared with fiscal 2011 fourth-quarter net income available for common shareholders, excluding special items, of $26.8 million, or $0.36 per diluted share.

For the full fiscal year ended June 30, 2012, adjusted EBITDA reached a record $850.7 million, up 69 percent from the $504.5 million generated in fiscal 2011.  Fiscal 2012 net income available for common shareholders was $316.7 million, or $3.85 per diluted share, on revenues of $1.3 billion and production of 44,100 BOE/d.  These results compare with net income available for common shareholders for fiscal 2011 of $27.7 million, or $0.42 per diluted share, on revenues of $859.4 million and production of 34,600 BOE/d.

            �Fiscal 2012 was a record year for production, EBITDA, net income and reserves,� Energy XXI Chairman and CEO John Schiller said.  �Our successful oil-focused development program drove these results, with the primary goal of generating substantial free cash flow to bolster the balance sheet.  Even with this low-risk approach, without the contribution of a single exploration well, we were able to replace nearly 120 percent of production and grow reserves 3 percent.  For fiscal 2013, we remain focused on growing oil production through the exploitation and development of our core assets while deploying 15 percent of our capital to exploration in the shallow waters of the Gulf of Mexico.�

Year-end Reserves

The company�s June 30, 2012 fiscal year-end proved reserves were estimated at 119.6 million barrels of oil equivalent (MMBOE), up 3 percent from the June 30, 2011 fiscal year-end reserves.   Energy XXI added 19.2 MMBOE of proved reserves primarily through discoveries, extensions of existing fields and revisions, while producing 16.1 MMBOE. The all-sources reserves replacement rate was 119 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, 68 percent are proved developed, 71 percent are oil and natural gas liquids, and 29 percent are natural gas.  The tables set forth below provide additional information relating to the company�s reserves, including cost-incurred data.

And Provides Operational Update

• Fiscal 2012 EBITDA rises 69% to a record $851 million
• Production Increases 27% for the year
• Net debt to capitalization reduced to 39%
• Proved reserves climb to 120 MMBOE, 71% liquids

HOUSTON � Aug. 8, 2012 � Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced fiscal fourth-quarter and full-year financial and operating results for the period ended June 30, 2012, and provided an operational update.

For the 2012 fiscal fourth quarter, adjusted earnings before interest, taxes, depreciation, depletion and amortization (adjusted EBITDA) was a $223.1 million on revenues of $341.9 million, as volumes reached a record quarterly average of 47,600 barrels of oil equivalent per day (BOE/d), 68 percent of which was oil.  These results compare with 2011 fiscal fourth-quarter adjusted EBITDA of $165.9 million on revenues of $282.8 million and volumes of 42,100 BOE/d, up 34 percent, 21 percent and 13 percent, respectively.  Net income available for common shareholders in the 2012 fiscal fourth quarter totaled $78.3 million, or $0.93 per diluted share, compared with fiscal 2011 fourth-quarter net income available for common shareholders, excluding special items, of $26.8 million, or $0.36 per diluted share.

For the full fiscal year ended June 30, 2012, adjusted EBITDA reached a record $850.7 million, up 69 percent from the $504.5 million generated in fiscal 2011.  Fiscal 2012 net income available for common shareholders was $316.7 million, or $3.85 per diluted share, on revenues of $1.3 billion and production of 44,100 BOE/d.  These results compare with net income available for common shareholders for fiscal 2011 of $27.7 million, or $0.42 per diluted share, on revenues of $859.4 million and production of 34,600 BOE/d.

            �Fiscal 2012 was a record year for production, EBITDA, net income and reserves,� Energy XXI Chairman and CEO John Schiller said.  �Our successful oil-focused development program drove these results, with the primary goal of generating substantial free cash flow to bolster the balance sheet.  Even with this low-risk approach, without the contribution of a single exploration well, we were able to replace nearly 120 percent of production and grow reserves 3 percent.  For fiscal 2013, we remain focused on growing oil production through the exploitation and development of our core assets while deploying 15 percent of our capital to exploration in the shallow waters of the Gulf of Mexico.�

Year-end Reserves

The company�s June 30, 2012 fiscal year-end proved reserves were estimated at 119.6 million barrels of oil equivalent (MMBOE), up 3 percent from the June 30, 2011 fiscal year-end reserves.   Energy XXI added 19.2 MMBOE of proved reserves primarily through discoveries, extensions of existing fields and revisions, while producing 16.1 MMBOE. The all-sources reserves replacement rate was 119 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, 68 percent are proved developed, 71 percent are oil and natural gas liquids, and 29 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, 2012 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, 2012, using prices of $95.67 per barrel of oil and $3.15 per MMBTU of gas, before differentials, based on the SEC-prescribed first-of-the-month average prices for the preceding 12 months.

Exploration and Development Activity

At the West Delta 73 field (100% WI / 83% NRI), the Rosebank well is online and producing 800 BOE/d net.  The well was completed in July but due to rig moves was not fully placed on production until the first week of August.  This well penetrated the F-40 sand and is producing approximately 85 percent oil.

The Don Tomas well at Main Pass (WI 100% / 78% NRI) has been successfully completed and is currently being tested.  As previously announced, initial logs indicated the well encountered 195 feet of net pay within the BA-4AA sand.  The company has also logged an additional 89 feet of net pay in the BA-4B and J-6 sands and will evaluate a second well up-dip to develop the additional pay sands.

At Grand Isle 16 (WI 100% / NRI 87%), the Pi development well has been completed and is testing.  The well encountered 400 feet of net pay, primarily oil, in multiple sands.  The well currently is being brought online with a flowing tubing pressure of 1,850 psi, which the company believes will allow production of approximately 1,200 BOE/d net.  At Grand Isle, the company expects to drill as many as six development wells and recomplete another five wells in the current fiscal year.

Capital Program Estimates

The company has received approval from its board of directors to proceed with a capital expenditure budget of $700 million for fiscal year 2013, which began July 1, 2012.  Drilling, completion and facilities for the company�s core assets account for $505 million of the total capital budget, with $322 million going toward exploration and development at the acquired ExxonMobil properties and $183 million allocated toward the exploration and development of the legacy assets.  Another $94 million is allocated to the ultra-deep exploration and development program.  The remainder of the capital budget is allocated to general and administrative, land and abandonment costs.