Since our inception in July 2005, Energy XXI has implemented an "acquire and exploit" growth strategy to build a geographically focused portfolio with some of the highest per-unit margins in the industry.
Since our company was founded in 2005, we've executed a highly successful acquire and exploit strategy. We have completed five major acquisitions totaling $2.5 billion between April 2006 and December 2010 and have focused our resources on developing the acquired properties while ramping up a complementary exploration program designed to provide organic growth for the future. We have a proven track record of low-risk, high-return oil and natural gas development. Our most recent acquisition of ExxonMobil properties on the Gulf of Mexico shelf has significantly increased our drilling opportunities and production volumes within our existing core fields, as well as expanded our operations into the West Delta and Grand Isle fields. Energy XXI's oil-focused development program continues to drive strong results and deliver industry-leading margins and cash flow that is expected to be sufficient to fund the entire capital program, including ultra-deep exploration, with discretionary cash left over.
For fiscal 2012, we have budgeted a capital program of $450 million. Of that amount, approximately $372 million will go to the drill bit with $270 million allocated to our core producing properties and $102 million allocated to high-impact, ultra-deep shelf projects. Approximately 50 percent of the fiscal 2012 budget targets development drilling. About 21 percent targets exploration drilling, which includes the Blackbeard East and Lafitte prospects. Another 6 percent is for well workovers and recompletions, while about 6 percent is earmarked for facilities and 5 percent is for seismic and land acquisition. The remainder is for abandonment, capitalized administrative and other costs. While Energy XXI is consistently engaged in evaluating Gulf of Mexico and Gulf Coast acquisition opportunities, the budget does not dedicate capital for property acquisitions.
On December 17, 2010 Energy XXI announced the successful closing of the acquisition of Gulf of Mexico shelf properties from ExxonMobil. Pro forma for the acquisition, estimated proved plus probable reserves increase 72 percent to 158.1 million BOE from 92.1 million BOE at the company's June 30, 2010 fiscal year end. Pro forma production rose to approximately 46,000 BOE per day, up more than 77 percent from the 25,900 BOE per day average in the most recent fiscal quarter ended September 30, 2010. The properties include 160 producing wells in 9 fields in less than 470 feet of water. The acquired properties are centrally located between our two core production fields at South Timbalier 21 and Main Pass and increase our total offshore leases to 351,113 net acres. We believe the ExxonMobil acquisition provides our company an excellent opportunity to increase production volumes, drilling inventory and reserves, while maintaining our focus on oil-weighted assets in our core area of expertise in the shallow waters of the Gulf of Mexico.
Earnings Call
