Energy XXI's Horror Show Can Have A Happy Ending

This article was originally published by Seeking Alpha on Oct. 10, 2014

Summary: Energy XXI has struggled to post any meaningful growth over the last couple of years. The company’s shares have fallen by more than 60% this year. However, the company is gearing up for a revival in the near term. So far, the company’s turnaround story appears to be on track.

Energy XXI (NASDAQ:EXXI) is a small oil-focused exploration and production company operating mainly in the shallow waters of the U.S. Gulf of Mexico Shelf that has struggled to post any meaningful growth over the last several years; but it could be a turnaround story in the making.

Horror Show

Energy XXI's shares have plummeted this year, falling by more than 60% since January, partly due to the weakness in oil prices that has hit offshore oil producers. Additionally, Jim Cramer has recently said that this is the worst stock he has ever been associated with. "They've got to be in there doing something good soon," Cramer said, "it is a horror show."

During FY2012, Energy XXI increased its oil production to more than 30,000 barrels a day from less than 15,000 barrels a day in FY2010. This triple-digit growth was partly due to the massive $1 billion acquisition of oil-weighted Gulf of Mexico shallow water properties from Exxon Mobil (NYSE:XOM) in late 2010 that were already producing at an average of 20,000 barrels of oil equivalents a day.

Since then, the company has not reported any meaningful growth. During FY2014, the company's oil production increased from more than 28,000 … read full article at Seeking Alpha. 

.

Don't Give Up on Energy XXI, Just Wait for That Turnaround

This article was originally published by TheStreet on August 30, 2014. 

By Sarfaraz A. Khan

Shares of Energy XXI (EXXI_) , commonly known as EXXI, have fallen by nearly 40% this year, currently trading at $16.50. But that is no reason to sell this stock, even with the company suffering a lack of revenue growth over the last two years. 

Why? Because EXXI, a small energy company focused on producing oil from the shallower waters of the U.S. Gulf of Mexico Shelf, has forecast a revival in its latest quarterly results on the back of the $2.3 billion acquisition of its peer EPL Oil & Gas (EPL_) . After completion of the acquisition in June, EXXI became the biggest publicly traded independent operator at the Gulf of Mexico Shelf.

That means EXXI could also become a takeover target of a bigger oil company looking to expand its position in the Gulf of Mexico. There are several oil majors operating in this area includingExxon Mobil (XOM_) , Chevron (CVX_) , Royal Dutch Shell (RDS.A_) and BP (BP_) . While most of the majors are largely focused on exploiting the deepwater areas, with advancements in exploration and production technologies, such as higher quality seismic analysis and horizontal drilling, the big boys of the industry might consider revisiting the shallower waters.