Energy XXI Reports Fiscal Second-Quarter Results and Provides Operations Update

• Production 20% higher than prior quarter on hurricane recovery
• Successful SP49 workover adds 15 MMcf/d of production
• Additional working interest in Bayou Carlin field adds 2,000 BOE/d and upside
• Third horizontal well at West Delta delivers initial production of 1,700 BOE/d

HOUSTON � Jan. 30, 2013 � Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced fiscal second-quarter results and provided an operations update on activities in the Gulf of Mexico.

For the 2013 fiscal second quarter, Energy XXI reported earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) of $198.8 million, compared with $225.6 million in the 2012 fiscal second quarter.  Net income available for common stockholders for the 2013 fiscal second quarter was $38.5 million, or $0.47 per diluted share, on revenues of $321 million, compared with fiscal 2012 second-quarter net income available for common stockholders of $93.4 million, or $1.11 per diluted share, on revenue of $341 million.

Production for the 2013 fiscal second quarter averaged 44,600 barrels of oil equivalent per day (BOE/d), compared with 42,700 BOE/d in the 2012 fiscal second quarter, and compared with 37,300 BOE/d in the 2013 fiscal first quarter, which was impacted by Hurricane Isaac.  Oil volumes for the 2013 fiscal second quarter averaged 29,400 barrels per day (Bbl/d).  Current production approximates 47,000 BOE/d, with another 5,000 BOE/d temporarily offline due to various downtime issues, bringing total capacity to approximately 52,000 BOE/d.

�Good operating margins driven by our oil-focused development program have established a solid base going into the second half of our fiscal year,� Energy XXI Chairman and CEO John Schiller said.  �We continue the horizontal drilling program, complemented by key exploration projects, focused on growing reserves and production simultaneously.�

Exploration and Development Activity

At West Delta 73 (100% WI/ 83% NRI), the Hyden well was drilled to 8,760 feet true vertical depth (TVD)/11,700 feet measured depth (MD), including a 760-foot horizontal section in the G-20 oil sand.  Hyden was placed on production in January at approximately 1,700 BOE/d, gross.  To date, Energy XXI has drilled three successful horizontal wells in the West Delta 73 field.  Proved reserves at each of the three wells are expected to approximate 1.2 million BOE to 2.0 million BOE per well.

In the Main Pass 61 field (100% WI/ 83% NRI), the Monte Carlo well was drilled to 7,180 feet TVD/8,200 feet MD, logging 31 feet of net pay in the J-6 oil sand.  This high-angle well was completed and brought online within the past week and is currently being evaluated.  Monte Carlo was drilled into an un-mapped portion of the structure, successfully extending the proved reservoir and adding reserves.  Additional wells will be drilled to determine the extent of the reservoir.

The development program at Grand Isle 16/18 (100% WI/ 86% NRI) is ongoing. Gelato, a potential horizontal location, is currently drilling at 9,200 feet TVD toward a proposed depth of 10,600 feet TVD targeting the C-6 oil sand.  Another well recently drilled at Grand Isle, DrO, targeting the BF-2 sand, was temporarily abandoned and the wellbore preserved for a potential future sidetrack.

At the South Pass 49 field, a successful workover was completed on the A-7 well (57% WI/ 47% NRI).  Since March 2012, the well had been producing 2 million cubic feet per day (MMcf/d) of natural gas plus 60 Bbl/d of condensate from the D-65 sand, which had never previously been produced in the field.  Frac packs were installed for sand control across the lower portion of the D-65 reservoir, to separately test the upper portion of the D-65 not previously perforated, and to gather more data about the reservoir and to increase production rates.  The well was recompleted in mid-December and has been producing at a sustained rate of 17 MMcf/d and 20 Bbl/d of condensate.

The Pendragon well, located on Vermilion Block 178, is currently drilling past 10,482 feet (TVD)/ 11,577 feet (MD).  The exploratory well is targeting multiple sands on the south side of a salt dome, with a proposed total depth of 16,300 feet TVD/ 20,400 feet MD. Energy XXI is operator, with a 50 percent working interest (WI) and 40.6 percent net revenue interest (NRI).

Within the shallow-water ultra-deep exploration program with McMoRan, at the Davy Jones discovery well, the rig is being moved off location for several months while a large-scale hydraulic fracture treatment is designed to penetrate the Wilcox reservoirs.  Energy XXI holds a 15.8 percent working interest (12.6 percent net revenue interest) in the Davy Jones discovery well.  Total net investment in Davy Jones through Dec. 31, 2012 was approximately $140.9 million.

Blackbeard West #2 on Ship Shoal Block 188 has been drilled to 25,584 feet and the rig has been released.  A production liner has been set to enable completion of the well.  Logs and core data have identified potential hydrocarbon-bearing sands between 20,800 and 24,000 feet.  Initial completion efforts are expected to focus on approximately 50 net feet of laminated sands located at approximately 24,000 feet.  Additionally, 80 feet of potential low-resistivity pay at approximately 22,400 feet and an approximate 75-foot gross section at 20,900 feet have been identified.  Data acquired to date indicate that a completion at these depths could utilize conventional equipment.  Energy XXI holds a 22.9 percent working interest and a 17.5 percent net revenue interest in Ship Shoal Block 188.  Total net investment in Blackbeard West No. 2 approximated $ 28.6 million at Dec. 31, 2012.

The Lomond North ultra-deep prospect in the Highlander area, located primarily in St. Martin Parish, Louisiana, is drilling below 13,700 feet toward a proposed total depth of 30,000 feet.  The well is targeting Eocene, Paleocene and Cretaceous objectives below the salt weld.  Lomond North is approximately 65 miles north of Davy Jones.  Energy XXI holds an 18 percent working interest and a 13.1 percent net revenue interest in Lomond North, where its total net investment approximated $10.0 million at Dec. 31, 2012.

The Lineham Creek exploration prospect, located onshore in Cameron Parish, Louisiana, approximately 55 miles northwest of Davy Jones, is drilling below the salt weld at 26,500 feet. The well is targeting Eocene and Paleocene objectives below the salt weld with a proposed total depth of 29,000 feet.  Chevron U.S.A. Inc., as operator of the well, holds a 50 percent working interest.  Energy XXI holds a 9 percent working interest and a 6.75 percent net revenue interest in the well.  Total net investment in Lineham Creek was approximately $13.6 million at Dec. 31, 2012.

Acquisition Activity

          Energy XXI purchased McMoRan Exploration�s interest in the Laphroaig field for cash consideration, before closing adjustments, of $80 million effective Jan. 1, 2013.  The consideration has been financed from Energy XXI�s existing cash and available revolver facility.  Energy XXI previously held an 18.75 percent WI in the field, and now holds a 56.25 percent WI and has assumed operatorship of the assets.  The acquisition adds 2,000 BOE/d of production to Energy XXI from the field�s two producing wells.  

�This acquisition affords Energy XXI the opportunity to operate and lead future development and delineation of this field, which we believe offers significant upside to current proved reserves and production,� Schiller said.  �The original Peterson discovery and Landers development wells to date have produced approximately 60 billion cubic feet (Bcf) of natural gas, with estimated recovery of 100 Bcf combined.  The Duplantis well we intend to drill this year offers the potential to recover an additional 100 Bcf.� 

Capital Expenditures

          During the 2013 fiscal second quarter, capital expenditures, including plug-and-abandonment and excluding acquisition costs, totaled $204 million, with $45 million in exploration and $159 million in development and other costs.  Capital expenditures for the full fiscal year ending June 30, 2013, excluding acquisitions, are expected to increase to between $730 million and $760 million.

Conference Call Tomorrow, Jan. 31, at 9 a.m. CST, 3 p.m. London Time

Energy XXI will host its fiscal second-quarter conference call tomorrow, Jan. 31, at 9 a.m. CST (3 p.m. London time). The dial-in numbers are 1 (631) 813-4724 (U.S.) and (0) 80 0032 3836 (U.K.), and the confirmation code is 89426190.  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. 

Forward-Looking Statements

All statements included in this release relating to future plans, projects, events or conditions and all other statements other than statements of historical fact included in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions, including changes in long-term oil and gas prices or other market conditions affecting the oil and gas industry, reservoir performance, the outcome of commercial negotiations and changes in technical or operating conditions, among others, that could cause actual results, including project plans and related expenditures and resource recoveries, to differ materially from those described in the forward-looking statements. Energy XXI assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.

Competent Person Disclosure

The technical information contained in this announcement relating to operations adheres to the standard set by the Society of Petroleum Engineers. Tom O�Donnell, Vice President of Exploitation, a Petroleum Engineer, is the qualified person who has reviewed and approved the technical information contained in this announcement.

About the Company

Energy XXI is an independent oil and natural gas exploration and production company whose growth strategy emphasizes acquisitions, enhanced by its value-added organic drilling program. The company�s properties are located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore.  Seymour Pierce is Energy XXI�s listing broker in the United Kingdom.  To learn more, visit the Energy XXI website at www.EnergyXXI.com.

  ENERGY XXI (BERMUDA) LIMITED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

            (In Thousands, except per share information)

            (Unaudited)

            As required under Regulation G of the Securities Exchange Act of 1934, provided below is a reconciliation of net income to EBITDA.  We define EBITDA as earnings before interest, taxes, depreciation, depletion and amortization.  EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States (�GAAP�).  Although not proscribed under GAAP, the company believes EBITDA is relevant because it helps investors to understand the company�s operating performance and makes it easier to compare its results with other oil and gas exploration and production companies that may have different financing and capital structures or tax rates.  EBITDA should not be considered in isolation of, or as a substitute for, net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity.  EBITDA, as the company calculates it, may not be comparable to EBITDA measures reported by other companies.  In addition, EBITDA does not represent funds available for discretionary use.

• Production 20% higher than prior quarter on hurricane recovery
• Successful SP49 workover adds 15 MMcf/d of production
• Additional working interest in Bayou Carlin field adds 2,000 BOE/d and upside
• Third horizontal well at West Delta delivers initial production of 1,700 BOE/d

HOUSTON � Jan. 30, 2013 � Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced fiscal second-quarter results and provided an operations update on activities in the Gulf of Mexico.

For the 2013 fiscal second quarter, Energy XXI reported earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) of $198.8 million, compared with $225.6 million in the 2012 fiscal second quarter.  Net income available for common stockholders for the 2013 fiscal second quarter was $38.5 million, or $0.47 per diluted share, on revenues of $321 million, compared with fiscal 2012 second-quarter net income available for common stockholders of $93.4 million, or $1.11 per diluted share, on revenue of $341 million.

Production for the 2013 fiscal second quarter averaged 44,600 barrels of oil equivalent per day (BOE/d), compared with 42,700 BOE/d in the 2012 fiscal second quarter, and compared with 37,300 BOE/d in the 2013 fiscal first quarter, which was impacted by Hurricane Isaac.  Oil volumes for the 2013 fiscal second quarter averaged 29,400 barrels per day (Bbl/d).  Current production approximates 47,000 BOE/d, with another 5,000 BOE/d temporarily offline due to various downtime issues, bringing total capacity to approximately 52,000 BOE/d.

�Good operating margins driven by our oil-focused development program have established a solid base going into the second half of our fiscal year,� Energy XXI Chairman and CEO John Schiller said.  �We continue the horizontal drilling program, complemented by key exploration projects, focused on growing reserves and production simultaneously.�

Exploration and Development Activity

At West Delta 73 (100% WI/ 83% NRI), the Hyden well was drilled to 8,760 feet true vertical depth (TVD)/11,700 feet measured depth (MD), including a 760-foot horizontal section in the G-20 oil sand.  Hyden was placed on production in January at approximately 1,700 BOE/d, gross.  To date, Energy XXI has drilled three successful horizontal wells in the West Delta 73 field.  Proved reserves at each of the three wells are expected to approximate 1.2 million BOE to 2.0 million BOE per well.

In the Main Pass 61 field (100% WI/ 83% NRI), the Monte Carlo well was drilled to 7,180 feet TVD/8,200 feet MD, logging 31 feet of net pay in the J-6 oil sand.  This high-angle well was completed and brought online within the past week and is currently being evaluated.  Monte Carlo was drilled into an un-mapped portion of the structure, successfully extending the proved reservoir and adding reserves.  Additional wells will be drilled to determine the extent of the reservoir.

The development program at Grand Isle 16/18 (100% WI/ 86% NRI) is ongoing. Gelato, a potential horizontal location, is currently drilling at 9,200 feet TVD toward a proposed depth of 10,600 feet TVD targeting the C-6 oil sand.  Another well recently drilled at Grand Isle, DrO, targeting the BF-2 sand, was temporarily abandoned and the wellbore preserved for a potential future sidetrack.

At the South Pass 49 field, a successful workover was completed on the A-7 well (57% WI/ 47% NRI).  Since March 2012, the well had been producing 2 million cubic feet per day (MMcf/d) of natural gas plus 60 Bbl/d of condensate from the D-65 sand, which had never previously been produced in the field.  Frac packs were installed for sand control across the lower portion of the D-65 reservoir, to separately test the upper portion of the D-65 not previously perforated, and to gather more data about the reservoir and to increase production rates.  The well was recompleted in mid-December and has been producing at a sustained rate of 17 MMcf/d and 20 Bbl/d of condensate.

The Pendragon well, located on Vermilion Block 178, is currently drilling past 10,482 feet (TVD)/ 11,577 feet (MD).  The exploratory well is targeting multiple sands on the south side of a salt dome, with a proposed total depth of 16,300 feet TVD/ 20,400 feet MD. Energy XXI is operator, with a 50 percent working interest (WI) and 40.6 percent net revenue interest (NRI).

Within the shallow-water ultra-deep exploration program with McMoRan, at the Davy Jones discovery well, the rig is being moved off location for several months while a large-scale hydraulic fracture treatment is designed to penetrate the Wilcox reservoirs.  Energy XXI holds a 15.8 percent working interest (12.6 percent net revenue interest) in the Davy Jones discovery well.  Total net investment in Davy Jones through Dec. 31, 2012 was approximately $140.9 million.

Blackbeard West #2 on Ship Shoal Block 188 has been drilled to 25,584 feet and the rig has been released.  A production liner has been set to enable completion of the well.  Logs and core data have identified potential hydrocarbon-bearing sands between 20,800 and 24,000 feet.  Initial completion efforts are expected to focus on approximately 50 net feet of laminated sands located at approximately 24,000 feet.  Additionally, 80 feet of potential low-resistivity pay at approximately 22,400 feet and an approximate 75-foot gross section at 20,900 feet have been identified.  Data acquired to date indicate that a completion at these depths could utilize conventional equipment.  Energy XXI holds a 22.9 percent working interest and a 17.5 percent net revenue interest in Ship Shoal Block 188.  Total net investment in Blackbeard West No. 2 approximated $ 28.6 million at Dec. 31, 2012.

The Lomond North ultra-deep prospect in the Highlander area, located primarily in St. Martin Parish, Louisiana, is drilling below 13,700 feet toward a proposed total depth of 30,000 feet.  The well is targeting Eocene, Paleocene and Cretaceous objectives below the salt weld.  Lomond North is approximately 65 miles north of Davy Jones.  Energy XXI holds an 18 percent working interest and a 13.1 percent net revenue interest in Lomond North, where its total net investment approximated $10.0 million at Dec. 31, 2012.

The Lineham Creek exploration prospect, located onshore in Cameron Parish, Louisiana, approximately 55 miles northwest of Davy Jones, is drilling below the salt weld at 26,500 feet. The well is targeting Eocene and Paleocene objectives below the salt weld with a proposed total depth of 29,000 feet.  Chevron U.S.A. Inc., as operator of the well, holds a 50 percent working interest.  Energy XXI holds a 9 percent working interest and a 6.75 percent net revenue interest in the well.  Total net investment in Lineham Creek was approximately $13.6 million at Dec. 31, 2012.

Acquisition Activity

          Energy XXI purchased McMoRan Exploration�s interest in the Laphroaig field for cash consideration, before closing adjustments, of $80 million effective Jan. 1, 2013.  The consideration has been financed from Energy XXI�s existing cash and available revolver facility.  Energy XXI previously held an 18.75 percent WI in the field, and now holds a 56.25 percent WI and has assumed operatorship of the assets.  The acquisition adds 2,000 BOE/d of production to Energy XXI from the field�s two producing wells.  

�This acquisition affords Energy XXI the opportunity to operate and lead future development and delineation of this field, which we believe offers significant upside to current proved reserves and production,� Schiller said.  �The original Peterson discovery and Landers development wells to date have produced approximately 60 billion cubic feet (Bcf) of natural gas, with estimated recovery of 100 Bcf combined.  The Duplantis well we intend to drill this year offers the potential to recover an additional 100 Bcf.� 

Capital Expenditures

          During the 2013 fiscal second quarter, capital expenditures, including plug-and-abandonment and excluding acquisition costs, totaled $204 million, with $45 million in exploration and $159 million in development and other costs.  Capital expenditures for the full fiscal year ending June 30, 2013, excluding acquisitions, are expected to increase to between $730 million and $760 million.

Conference Call Tomorrow, Jan. 31, at 9 a.m. CST, 3 p.m. London Time

Energy XXI will host its fiscal second-quarter conference call tomorrow, Jan. 31, at 9 a.m. CST (3 p.m. London time). The dial-in numbers are 1 (631) 813-4724 (U.S.) and (0) 80 0032 3836 (U.K.), and the confirmation code is 89426190.  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. 

Forward-Looking Statements

All statements included in this release relating to future plans, projects, events or conditions and all other statements other than statements of historical fact included in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions, including changes in long-term oil and gas prices or other market conditions affecting the oil and gas industry, reservoir performance, the outcome of commercial negotiations and changes in technical or operating conditions, among others, that could cause actual results, including project plans and related expenditures and resource recoveries, to differ materially from those described in the forward-looking statements. Energy XXI assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.

Competent Person Disclosure

The technical information contained in this announcement relating to operations adheres to the standard set by the Society of Petroleum Engineers. Tom O�Donnell, Vice President of Exploitation, a Petroleum Engineer, is the qualified person who has reviewed and approved the technical information contained in this announcement.

About the Company

Energy XXI is an independent oil and natural gas exploration and production company whose growth strategy emphasizes acquisitions, enhanced by its value-added organic drilling program. The company�s properties are located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore.  Seymour Pierce is Energy XXI�s listing broker in the United Kingdom.  To learn more, visit the Energy XXI website at www.EnergyXXI.com.

  ENERGY XXI (BERMUDA) LIMITED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

            (In Thousands, except per share information)

            (Unaudited)

            As required under Regulation G of the Securities Exchange Act of 1934, provided below is a reconciliation of net income to EBITDA.  We define EBITDA as earnings before interest, taxes, depreciation, depletion and amortization.  EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States (�GAAP�).  Although not proscribed under GAAP, the company believes EBITDA is relevant because it helps investors to understand the company�s operating performance and makes it easier to compare its results with other oil and gas exploration and production companies that may have different financing and capital structures or tax rates.  EBITDA should not be considered in isolation of, or as a substitute for, net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity.  EBITDA, as the company calculates it, may not be comparable to EBITDA measures reported by other companies.  In addition, EBITDA does not represent funds available for discretionary use.

The following table presents a reconciliation of our consolidated net income available for common stockholders to our consolidated EBITDA for the periods presented.

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED BALANCE SHEETS

(In Thousands, except share information)

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED STATEMENTS OF INCOME

            (In Thousands, except per share information)

            (Unaudited)

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED OPERATIONAL INFORMATION (Unaudited)

GLOSSARY

Barrel � unit of measure for oil and petroleum products, equivalent to 42 U.S. gallons.

BOE � barrels of oil equivalent, used to equate natural gas volumes to liquid barrels at a general conversion rate of 6,000 cubic feet of gas per barrel.

BOE/d � barrels of oil equivalent per day.

MMcf/d � million cubic feet of gas per day.

MD � total measured depth of a well.

Net Pay � cumulative hydrocarbon-bearing formations.

NRI, Net Revenue Interest � the percentage of production revenue allocated to the working interest after first deducting proceeds allocated to royalty and overriding interest.

TD � target total depth of a well.

TVD �true vertical depth of a well.

WI, Working Interest � the interest held in lands by virtue of a lease, operating agreement, fee title or otherwise, under which the owner of the interest is vested with the right to explore for, develop, produce and own oil, gas or other minerals and bears the proportional cost of such operations.

Workover / Recompletion � operations on a producing well to restore or increase production. A workover or recompletion may be performed to stimulate the well, remove sand or wax from the wellbore, to mechanically repair the well, or for other reasons.

Forward-Looking Statements

All statements included in this release relating to future plans, projects, events or conditions and all other statements other than statements of historical fact included in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions, including changes in long-term oil and gas prices or other market conditions affecting the oil and gas industry, reservoir performance, the outcome of commercial negotiations and changes in technical or operating conditions, among others, that could cause actual results, including project plans and related expenditures and resource recoveries, to differ materially from those described in the forward-looking statements. Energy XXI assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.

Competent Person Disclosure

The technical information contained in this announcement relating to operations adheres to the standard set by the Society of Petroleum Engineers. Tom O�Donnell, Vice President of Exploitation, a Petroleum Engineer, is the qualified person who has reviewed and approved the technical information contained in this announcement.

About the Company

Energy XXI is an independent oil and natural gas exploration and production company whose growth strategy emphasizes acquisitions, enhanced by its value-added organic drilling program. The company�s properties are located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore.  Seymour Pierce is Energy XXI�s listing broker in the United Kingdom.  To learn more, visit the Energy XXI website at www.EnergyXXI.com.

  ENERGY XXI (BERMUDA) LIMITED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

            (In Thousands, except per share information)

            (Unaudited)

            As required under Regulation G of the Securities Exchange Act of 1934, provided below is a reconciliation of net income to EBITDA.  We define EBITDA as earnings before interest, taxes, depreciation, depletion and amortization.  EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States (�GAAP�).  Although not proscribed under GAAP, the company believes EBITDA is relevant because it helps investors to understand the company�s operating performance and makes it easier to compare its results with other oil and gas exploration and production companies that may have different financing and capital structures or tax rates.  EBITDA should not be considered in isolation of, or as a substitute for, net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity.  EBITDA, as the company calculates it, may not be comparable to EBITDA measures reported by other companies.  In addition, EBITDA does not represent funds available for discretionary use.

• Production 20% higher than prior quarter on hurricane recovery
• Successful SP49 workover adds 15 MMcf/d of production
• Additional working interest in Bayou Carlin field adds 2,000 BOE/d and upside
• Third horizontal well at West Delta delivers initial production of 1,700 BOE/d

HOUSTON � Jan. 30, 2013 � Energy XXI (NASDAQ: EXXI) (AIM: EXXI) today announced fiscal second-quarter results and provided an operations update on activities in the Gulf of Mexico.

For the 2013 fiscal second quarter, Energy XXI reported earnings before interest, taxes, depreciation, depletion and amortization (EBITDA) of $198.8 million, compared with $225.6 million in the 2012 fiscal second quarter.  Net income available for common stockholders for the 2013 fiscal second quarter was $38.5 million, or $0.47 per diluted share, on revenues of $321 million, compared with fiscal 2012 second-quarter net income available for common stockholders of $93.4 million, or $1.11 per diluted share, on revenue of $341 million.

Production for the 2013 fiscal second quarter averaged 44,600 barrels of oil equivalent per day (BOE/d), compared with 42,700 BOE/d in the 2012 fiscal second quarter, and compared with 37,300 BOE/d in the 2013 fiscal first quarter, which was impacted by Hurricane Isaac.  Oil volumes for the 2013 fiscal second quarter averaged 29,400 barrels per day (Bbl/d).  Current production approximates 47,000 BOE/d, with another 5,000 BOE/d temporarily offline due to various downtime issues, bringing total capacity to approximately 52,000 BOE/d.

�Good operating margins driven by our oil-focused development program have established a solid base going into the second half of our fiscal year,� Energy XXI Chairman and CEO John Schiller said.  �We continue the horizontal drilling program, complemented by key exploration projects, focused on growing reserves and production simultaneously.�

Exploration and Development Activity

At West Delta 73 (100% WI/ 83% NRI), the Hyden well was drilled to 8,760 feet true vertical depth (TVD)/11,700 feet measured depth (MD), including a 760-foot horizontal section in the G-20 oil sand.  Hyden was placed on production in January at approximately 1,700 BOE/d, gross.  To date, Energy XXI has drilled three successful horizontal wells in the West Delta 73 field.  Proved reserves at each of the three wells are expected to approximate 1.2 million BOE to 2.0 million BOE per well.

In the Main Pass 61 field (100% WI/ 83% NRI), the Monte Carlo well was drilled to 7,180 feet TVD/8,200 feet MD, logging 31 feet of net pay in the J-6 oil sand.  This high-angle well was completed and brought online within the past week and is currently being evaluated.  Monte Carlo was drilled into an un-mapped portion of the structure, successfully extending the proved reservoir and adding reserves.  Additional wells will be drilled to determine the extent of the reservoir.

The development program at Grand Isle 16/18 (100% WI/ 86% NRI) is ongoing. Gelato, a potential horizontal location, is currently drilling at 9,200 feet TVD toward a proposed depth of 10,600 feet TVD targeting the C-6 oil sand.  Another well recently drilled at Grand Isle, DrO, targeting the BF-2 sand, was temporarily abandoned and the wellbore preserved for a potential future sidetrack.

At the South Pass 49 field, a successful workover was completed on the A-7 well (57% WI/ 47% NRI).  Since March 2012, the well had been producing 2 million cubic feet per day (MMcf/d) of natural gas plus 60 Bbl/d of condensate from the D-65 sand, which had never previously been produced in the field.  Frac packs were installed for sand control across the lower portion of the D-65 reservoir, to separately test the upper portion of the D-65 not previously perforated, and to gather more data about the reservoir and to increase production rates.  The well was recompleted in mid-December and has been producing at a sustained rate of 17 MMcf/d and 20 Bbl/d of condensate.

The Pendragon well, located on Vermilion Block 178, is currently drilling past 10,482 feet (TVD)/ 11,577 feet (MD).  The exploratory well is targeting multiple sands on the south side of a salt dome, with a proposed total depth of 16,300 feet TVD/ 20,400 feet MD. Energy XXI is operator, with a 50 percent working interest (WI) and 40.6 percent net revenue interest (NRI).

Within the shallow-water ultra-deep exploration program with McMoRan, at the Davy Jones discovery well, the rig is being moved off location for several months while a large-scale hydraulic fracture treatment is designed to penetrate the Wilcox reservoirs.  Energy XXI holds a 15.8 percent working interest (12.6 percent net revenue interest) in the Davy Jones discovery well.  Total net investment in Davy Jones through Dec. 31, 2012 was approximately $140.9 million.

Blackbeard West #2 on Ship Shoal Block 188 has been drilled to 25,584 feet and the rig has been released.  A production liner has been set to enable completion of the well.  Logs and core data have identified potential hydrocarbon-bearing sands between 20,800 and 24,000 feet.  Initial completion efforts are expected to focus on approximately 50 net feet of laminated sands located at approximately 24,000 feet.  Additionally, 80 feet of potential low-resistivity pay at approximately 22,400 feet and an approximate 75-foot gross section at 20,900 feet have been identified.  Data acquired to date indicate that a completion at these depths could utilize conventional equipment.  Energy XXI holds a 22.9 percent working interest and a 17.5 percent net revenue interest in Ship Shoal Block 188.  Total net investment in Blackbeard West No. 2 approximated $ 28.6 million at Dec. 31, 2012.

The Lomond North ultra-deep prospect in the Highlander area, located primarily in St. Martin Parish, Louisiana, is drilling below 13,700 feet toward a proposed total depth of 30,000 feet.  The well is targeting Eocene, Paleocene and Cretaceous objectives below the salt weld.  Lomond North is approximately 65 miles north of Davy Jones.  Energy XXI holds an 18 percent working interest and a 13.1 percent net revenue interest in Lomond North, where its total net investment approximated $10.0 million at Dec. 31, 2012.

The Lineham Creek exploration prospect, located onshore in Cameron Parish, Louisiana, approximately 55 miles northwest of Davy Jones, is drilling below the salt weld at 26,500 feet. The well is targeting Eocene and Paleocene objectives below the salt weld with a proposed total depth of 29,000 feet.  Chevron U.S.A. Inc., as operator of the well, holds a 50 percent working interest.  Energy XXI holds a 9 percent working interest and a 6.75 percent net revenue interest in the well.  Total net investment in Lineham Creek was approximately $13.6 million at Dec. 31, 2012.

Acquisition Activity

          Energy XXI purchased McMoRan Exploration�s interest in the Laphroaig field for cash consideration, before closing adjustments, of $80 million effective Jan. 1, 2013.  The consideration has been financed from Energy XXI�s existing cash and available revolver facility.  Energy XXI previously held an 18.75 percent WI in the field, and now holds a 56.25 percent WI and has assumed operatorship of the assets.  The acquisition adds 2,000 BOE/d of production to Energy XXI from the field�s two producing wells.  

�This acquisition affords Energy XXI the opportunity to operate and lead future development and delineation of this field, which we believe offers significant upside to current proved reserves and production,� Schiller said.  �The original Peterson discovery and Landers development wells to date have produced approximately 60 billion cubic feet (Bcf) of natural gas, with estimated recovery of 100 Bcf combined.  The Duplantis well we intend to drill this year offers the potential to recover an additional 100 Bcf.� 

Capital Expenditures

          During the 2013 fiscal second quarter, capital expenditures, including plug-and-abandonment and excluding acquisition costs, totaled $204 million, with $45 million in exploration and $159 million in development and other costs.  Capital expenditures for the full fiscal year ending June 30, 2013, excluding acquisitions, are expected to increase to between $730 million and $760 million.

Conference Call Tomorrow, Jan. 31, at 9 a.m. CST, 3 p.m. London Time

Energy XXI will host its fiscal second-quarter conference call tomorrow, Jan. 31, at 9 a.m. CST (3 p.m. London time). The dial-in numbers are 1 (631) 813-4724 (U.S.) and (0) 80 0032 3836 (U.K.), and the confirmation code is 89426190.  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. 

Forward-Looking Statements

All statements included in this release relating to future plans, projects, events or conditions and all other statements other than statements of historical fact included in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon current expectations and are subject to a number of risks, uncertainties and assumptions, including changes in long-term oil and gas prices or other market conditions affecting the oil and gas industry, reservoir performance, the outcome of commercial negotiations and changes in technical or operating conditions, among others, that could cause actual results, including project plans and related expenditures and resource recoveries, to differ materially from those described in the forward-looking statements. Energy XXI assumes no obligation and expressly disclaims any duty to update the information contained herein except as required by law.

Competent Person Disclosure

The technical information contained in this announcement relating to operations adheres to the standard set by the Society of Petroleum Engineers. Tom O�Donnell, Vice President of Exploitation, a Petroleum Engineer, is the qualified person who has reviewed and approved the technical information contained in this announcement.

About the Company

Energy XXI is an independent oil and natural gas exploration and production company whose growth strategy emphasizes acquisitions, enhanced by its value-added organic drilling program. The company�s properties are located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore.  Seymour Pierce is Energy XXI�s listing broker in the United Kingdom.  To learn more, visit the Energy XXI website at www.EnergyXXI.com.

  ENERGY XXI (BERMUDA) LIMITED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

            (In Thousands, except per share information)

            (Unaudited)

            As required under Regulation G of the Securities Exchange Act of 1934, provided below is a reconciliation of net income to EBITDA.  We define EBITDA as earnings before interest, taxes, depreciation, depletion and amortization.  EBITDA is not a measure of performance calculated in accordance with accounting principles generally accepted in the United States (�GAAP�).  Although not proscribed under GAAP, the company believes EBITDA is relevant because it helps investors to understand the company�s operating performance and makes it easier to compare its results with other oil and gas exploration and production companies that may have different financing and capital structures or tax rates.  EBITDA should not be considered in isolation of, or as a substitute for, net income as an indicator of operating performance or cash flows from operating activities as a measure of liquidity.  EBITDA, as the company calculates it, may not be comparable to EBITDA measures reported by other companies.  In addition, EBITDA does not represent funds available for discretionary use.

The following table presents a reconciliation of our consolidated net income available for common stockholders to our consolidated EBITDA for the periods presented.

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED BALANCE SHEETS

(In Thousands, except share information)

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED STATEMENTS OF INCOME

            (In Thousands, except per share information)

            (Unaudited)

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

(Unaudited)

ENERGY XXI (BERMUDA) LIMITED

CONSOLIDATED OPERATIONAL INFORMATION (Unaudited)

GLOSSARY

Barrel � unit of measure for oil and petroleum products, equivalent to 42 U.S. gallons.

BOE � barrels of oil equivalent, used to equate natural gas volumes to liquid barrels at a general conversion rate of 6,000 cubic feet of gas per barrel.

BOE/d � barrels of oil equivalent per day.

MMcf/d � million cubic feet of gas per day.

MD � total measured depth of a well.

Net Pay � cumulative hydrocarbon-bearing formations.

NRI, Net Revenue Interest � the percentage of production revenue allocated to the working interest after first deducting proceeds allocated to royalty and overriding interest.

TD � target total depth of a well.

TVD �true vertical depth of a well.

WI, Working Interest � the interest held in lands by virtue of a lease, operating agreement, fee title or otherwise, under which the owner of the interest is vested with the right to explore for, develop, produce and own oil, gas or other minerals and bears the proportional cost of such operations.

Workover / Recompletion � operations on a producing well to restore or increase production. A workover or recompletion may be performed to stimulate the well, remove sand or wax from the wellbore, to mechanically repair the well, or for other reasons.