Fitch gives Energy XXI notes B+/RR4

Fitch Ratings said it assigned a B+/RR4 to Energy XXI Gulf Coast's issuance of $500 million in 7½% senior unsecured notes.

The notes are pari passu with Energy XXI's other senior unsecured obligations and will be jointly and severally guaranteed by the company's existing subsidiaries, certain future material restricted subsidiaries, and Energy XXI Bermuda.

Net proceeds from the issuance will be used to repay debt outstanding on the company's secured revolver.

Fitch said Energy XXI's ratings are supported by the company's increased size and scale following property acquisitions and a robust organic drilling program; high exposure to liquids, composed mostly of higher-value black oil linked to waterborne grade pricing; historically strong production economics and cash generation; balanced acquisition funding; operator status on a majority of its properties (94%); and the short-term cash flow protections of its hedging position.

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