Financial Results

The Company reported net income of $34.4 million, or $1.07 of net income per diluted share, for the third quarter of 2008 compared to a net loss of $4.0 million, or a $0.12 net loss per diluted share, for the third quarter of 2007. Results for the third quarter of 2008 included an after-tax non-cash unrealized gain on derivative instruments of $19.0 million. Excluding the after-tax impact of the non-cash unrealized gain on derivative instruments, EPL's adjusted third quarter 2008 net income, a non-GAAP measure, would have been $15.4 million or $0.48 of net income per diluted share (see reconciliation of adjusted non-GAAP net income in the tables).

Revenue for the third quarter of 2008 was $94.7 million versus $110.4 million in the same period a year ago. Discretionary cash flow, which is cash flow from operating activities before changes in working capital and exploration expenses, was $52.7 million for the third quarter of 2008, compared with $66.5 million in the third quarter of last year (see reconciliation of discretionary cash flow schedule in the tables). Cash flow from operating activities in the third quarter of 2008 was $101.8 million compared with $62.6 million in the same quarter a year ago. EPL benefited in the third quarter from strong commodity prices and lower expenses, including dryhole, general and administrative ("G&A"), lease operating ("Loe"), and depreciation, depletion and amortization expenses. The lower expenses experienced in the third quarter of 2008 were a direct result of an ongoing and concerted effort to reduce 2008 cash operating costs and a material reduction in the Company's dryhole expenses versus the prior year. These benefits were offset by reduced revenues as a result of storm related shut-in production due to Hurricanes Gustav and Ike ("hurricanes" or "storms").

Production for the third quarter of 2008 averaged 12,263 barrels of oil equivalent ("Boe") per day. Natural gas production averaged 42.4 million cubic feet ("Mmcf") per day and oil production averaged 5,189 barrels of oil per day. Third quarter 2008 production volumes were lower than third quarter 2007 production volumes of 23,701 Boe per day due to natural production declines year over year and the impact of approximately 4,400 Boe per day average for the quarter of shut-in production due to hurricanes.

Price realizations, all of which are stated before the impact of derivative instruments, averaged $114.61 per barrel for oil and $10.22 per thousand cubic feet ("Mcf") of natural gas in the third quarter of 2008, compared to $70.89 per barrel and $6.62 per Mcf in the third quarter of 2007.

For the nine months ended September 30, 2008, the Company reported net income of $40.8 million, or $1.27 of net income per diluted share. This compares to a net loss of $6.5 million, or an $0.18 net loss per diluted share in the same period of 2007. Discretionary cash flow for the first nine months of 2008 totaled $181.8 million compared to $208.2 million in the same period a year ago (see reconciliation of discretionary cash flow in table). Cash flow from operating activities in the first nine months of 2008 was $221.2 million compared to $229.9 million in the same period of 2007.

For the first nine months of 2008, the Company said capital expenditures for exploration and development activities totaled $172.8 million. The Company's full year 2008 capital expenditures for exploration and development activities are projected to total approximately $200 million.

As of September 30, 2008, the Company had cash on hand of $15.6 million and total debt of $454.5 million. The Company had no outstanding debt on its bank facility at the end of the third quarter, with $150.0 million of borrowing capacity available. The Company is currently undergoing its customary semi-annual borrowing base redetermination, which is expected to be completed later this month.

The Company announced today that in October 2008 it had named David P. Cedro as its new Vice President, Controller and Principal Accounting Officer. Mr. Cedro is responsible for overseeing all aspects of EPL's accounting functions. He has over 16 years of accounting and finance experience including management positions held from 1992 to 2003 within Ernst & Young LLP and Arthur Andersen LLP, current Big 4 and former Big 6 international accounting firms, respectively. In 2003, Mr. Cedro joined The Shaw Group Inc., a Fortune 500 company that, among other services, provides engineering and construction support to the energy sector, where he held various executive positions until March 2008. Immediately prior to joining EPL, he was Corporate Controller for Bayou Steel, LLC, a steel manufacturing company recently acquired by ArcelorMittal SA. He is a Certified Public Accountant and holds a M.S. and B.S. in Accounting from the University of New Orleans.

2008 Operations

As previously reported, the vast majority of EPL's producing properties, which are located in the Gulf of Mexico ("GOM"), have suffered minor damage as a result of Hurricanes Gustav and Ike. Current daily production is approximately 50% of pre-storm production levels. Restoration of the Company's remaining production is dependent upon the acceptance of production by third party sales pipelines damaged during the storms. Based on estimates from these third parties, EPL expects the vast majority of its pre-storm production to be restored in the latter part of this year's fourth quarter.

In addition to restoration of hurricane-related shut-in production before year end 2008, the Company has two projects from prior years' discoveries scheduled to commence production in 2008, including the deepwater Raton gas well in Mississippi Canyon 248 and one GOM Shelf ("Shelf") well. The Raton well, a deepwater gas discovery, is scheduled to commence production late fourth quarter of this year. EPL has a 33% non-operated working interest in this well. On the Shelf, the Company anticipates the start of production late in the fourth quarter from the South Marsh Island 79 #E-1 well, a 100% EPL owned gas discovery awaiting a third party pipeline repair. EPL is currently projecting full year 2008 production in the range of 13,000 to 14,000 Boe per day, with its fourth quarter 2008 production estimated to average between 9,000 and 11,000 Boe per day. With the benefit of these new sources of production and the current schedule of hurricane-related production restoration, EPL projects its 2008 production exit rate will range from 16,000 to 20,000 Boe per day.

The Company announced that in its East Bay development program, it has drilled its seventh successful sidetrack this year, the OCS-694 #147st, with over 145 feet of net pay and four pay sands. EPL's drillwell 2008 performance to date on the Shelf, all within its core areas of South Timbalier, Bay Marchand and East Bay, is at a 93% success rate. This rate is above its historical success rate of 75%, with the development drillwell program yielding better than expected results from oil opportunities exploited in East Bay and from several projects in South Timbalier 26. This includes three wells in Bay Marchand, three in South Timbalier 26 and seven in East Bay. Regarding its 2008 development program, EPL expects to complete one additional rig workover operation in the East Bay field before the end of year.

Richard A. Bachmann, EPL's Chairman and CEO, commented, "I am extremely pleased with the progress our staff has made towards meeting our key goals this year, which include stabilizing production, improving our drilling results and controlling our costs. We have stabilized production, and, more importantly, we were able to add significant new sources of production from our successful drilling programs prior to the hurricanes despite not yet having contribution from our deepwater Raton well. Controlling our costs throughout this year has positioned us well during this period of production disruptions caused by the hurricanes. We also expect to be within our planned capital budget of $200 million for 2008 despite the additional cost from the storms to our rig operations."

Bachmann continued, "Our overall investment approach going forward into 2009 will be conservative.