 Acquisition of Stone Energy Corporation Acquisition of Stone Energy Corporation Conference Call June 23, 2006 Energy Partners, Ltd. Filed by Energy Partners, Ltd. Pursuant to Rule 425 under the Securities Act of 1933 and deemed filed pursuant to Rule 14a-12 under the Securities Exchange Act of 1934 Subject Company: Stone Energy Corporation Commission File No.: 1-12074 |
 2 Richard A. Bachmann Chairman and Chief Executive Officer Phillip A. Gobe President and Chief Operating Officer John H. Peper Executive Vice President General Counsel and Corporate Secretary Principal Corporate Office 201 St. Charles Ave. Suite 3400 New Orleans, LA 70170 Phone: (504) 569-1875 Web www.eplweb.com Investor Relations Contacts T.J. Thom tthom@eplweb.com Al Petrie alpetrie@eplweb.com Corporate Information |
 3
Forward Looking Statements & Additional Information This presentation contains forward-looking information regarding EPL that is intended to be covered by the safe harbor “forward- looking statements” provided by the Private Securities Litigation Reform Act of 1995. All statements included
in this press release that address activities, events or developments that EPL
expects, believes or anticipates will or may occur in the future are forward-looking statements. These include statements regarding: • completion of the proposed merger, • effective integration of the two companies, • reserve and production estimates, • oil and gas prices, • the impact of derivative positions, • production expense estimates, • cash flow estimates, • future financial performance, • planned capital expenditures, and • other matters that are discussed in EPL’s filings with the SEC. These statements are based on current expectations and projections about future events and
involve known and unknown risks, uncertainties, and other factors that may
cause actual results and performance to be materially different from any future results or performance expressed or implied by these forward-looking statements. Please refer to EPL’s filings with the SEC, including its Form 10-K for the year ended December 31, 2005, for a discussion of these risks. EPL AND STONE WILL FILE A JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS WITH THE
SECURITIES AND EXCHANGE COMMISSION. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT
INFORMATION REGARDING EPL, STONE AND THE ACQUISITION. A DEFINITIVE JOINT PROXY
STATEMENT/PROSPECTUS WILL BE SENT TO SECURITY HOLDERS OF EPL AND STONE SEEKING
THEIR APPROVAL OF THE ACQUISITION. The documents filed with the SEC by EPL may be obtained free of charge from EPL’s website at www.eplweb.com or by directing a request to: Energy Partners, Ltd., 201 St. Charles Avenue, Suite 3400, New Orleans, Louisiana 70170, Attn: Secretary, (504) 569-1875. In addition, the documents filed with the SEC by Stone may be obtained free of charge from Stone website at www.stoneenergy.com. Investors and security holders are urged to read the joint proxy statement/prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the proposed acquisition. EPL, Stone and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of EPL and Stone in favor of the acquisition. Information about the executive officers and directors of EPL and their direct or indirect interests, by security holdings or otherwise, in the acquisition will be set forth in the proxy statement-prospectus relating to the acquisition when it becomes available. Information about the executive officers and directors of Stone and their direct or indirect interests, by security holdings or otherwise, in the acquisition will be set forth in the proxy statement-prospectus relating to the acquisition when it becomes available. |
 4 Powerful Strategic Rationale • Accelerates diversification and growth within GOM • Adds proved reserves at an attractive price • Ideal overlap of Shelf assets - Provides inherent operational efficiencies - Operating and G&A savings - Ability to expand and high grade exploratory program • High operated status of combined assets • Balanced gas/oil production ratio (65% gas/35% oil) Strengthens Strengthens GOM Presence GOM Presence (1) (1) Enhances Enhances Ability to Compete Ability to Compete Establishes Meaningful Establishes Meaningful Position in Rocky Mountains Position in Rocky Mountains and Williston Basin and Williston Basin • Diversification onshore • Low cost entry • Continue active E&P program - Acquisition of exploration and exploitation acreage - Exploration and exploitation drilling - Reserve and production growth • Experienced team in place (1) Includes impact of Stone’s proposed Amberjack acquisition (Mississippi Canyon
109/108) Augments Augments Employee Base Employee Base • People already in place to execute operating strategy • Experienced operating, technical, financial and administrative staff • Provides increased scale, scope and cash flow to pursue wide range of opportunities - GOM Shelf, deepwater and deep Shelf - Onshore Louisiana, Rocky Mountains and Williston Basin - International |
 5 Transaction Overview • Fully financed by Bank of America • Committed to an immediate debt reduction plan • Anticipate hedging a substantial percentage of production in 2007 and 2008 • $1.4 billion equity value • $2.2 billion enterprise value • SEC fillings and other customary regulatory approvals • EPL & Stone shareholder approval • Closing expected in early Q4 2006 Price Price Consideration Consideration Financing Financing Path Forward Path Forward • $51 per share: cash or stock • Subject to a collar and other limitations • Number of EPL shares issued for each Stone share under a stock election will range from 2.525 to 2.066 • Maximum number of EPL shares to be issued: ~35 million |
 6 Thorough Due Diligence Review Covered key functions and operating groups Focused on: • Reserves • Storm losses and related insurance coverage • Shareholder litigation/SEC inquiry • Potential cost savings and operational/administrative synergies Upside potential identified: • Numerous Shelf exploitation and exploration opportunities • Proposed acquisition of additional interest in Amberjack (Mississippi Canyon 109/108) • Deepwater and deep Shelf portfolio • Growing Rocky Mountains and Williston Basin acreage position • Bohai Bay, China concessions |
 7 Pro Forma Reserves (1,2) 94% Gulf of Mexico 72% Rocky Mountain & Williston Basins 22% Onshore 6% Gulf of Mexico Onshore 6% EPL Reserve Profile EPL Reserve Profile Stone Reserve Profile Stone Reserve Profile Pro Forma Reserve Profile Pro Forma Reserve Profile 80% 6% Gulf of Mexico Onshore Rocky Mountain & Williston Basins 14% (1) As of 12/31/05; includes reserve adds from Stone’s proposed Amberjack
acquisition (2) All of Stone’s reserves expected be fully engineered by independent engineering firms prior to closing; all of EPL’s reserves fully engineered by independent engineering firms 59.3 Mmboe 108.1 Mmboe 167.4 Mmboe |
 8 Transaction expected to be immediately cash flow accretive Assumes $55 million in annual pre-tax cost savings from synergies 2007 capital budget estimated at $625 million Combined cash flow will facilitate substantial reduction of debt to approximately 50% of book capitalization by end of 2008 Financial Highlights Balanced drilling program and committed debt reduction plan |
 9 Attractive acquisition cost Comparison with Recent Transactions (2005-2006) Stone Acquisition (1) Corporate Transactions* Asset Transactions* $20.63 $ 25.48 $26.98 $24.57 $ 22.48 $0.00 $10.00 $20.00 $30.00 (1) Based on pro forma reserves of 108.1 Mmboe at 12/31/05 which includes Stone’s proposed Amberjack acquisition and assumes $51.00 per share purchase price. Based on EPL’s closing price of $18.02 on June 22, 2006, the transaction value per Boe would be $19.92. * See Appendix for listing of recent transactions used in both comparisons Transaction value per Boe |
 10 Strong EPL executive management team remains intact • Proven execution and integration capabilities Headquarters remains in New Orleans • Maintain Lafayette and Denver office locations • Consolidate Houston offices in one location Expand board from 11 to 14 to include three Stone directors EPL shareholders retain majority ownership Combined Company at a Glance The right leadership and operating structure to capitalize on future growth opportunities |
 Phillip Gobe Energy Partners,Ltd Acquisition of Stone Energy Corporation Acquisition of Stone Energy Corporation |
 12 Stone and EPL: Premier GOM Operator Combined Combined Company Company Assets Assets as as of of 12/31/05 12/31/05 (1) (1) 1) Key fields: • EPL: ST 41, ST 26, East Bay • Stone: EW 305, MP 288, PL 23, VR 255 Balanced program of low, moderate and high potential projects Reserves • 89% operated • 48% oil and 52% gas Eastern Western Central (1) Includes Stone’s proposed Amberjack acquisition (2) Assumes restoration of Amberjack production at pre-Katrina rates Expanded scale and scope of GOM operations offer increased opportunities for growth Combined Company GOM Combined Company GOM Production Diversification Production Diversification (1,2) (1,2) |
 13 EPL Shelf EPL Onshore EPL Deepwater Stone Shelf Stone Onshore Stone Deepwater Gulf of Mexico Blocks EPL 120 Stone 151 Premier Combined GOM Position AlaminosCanyon Area KeathleyCanyon Area Walker Ridge Area East Breaks Area Garden Banks Area Green Canyon Area Atwater Galveston Area South Galveston Area High Island Area South High Island Area High Island East Area High Island East Area South West Cameron Area West West Cameron Area West Cameron Area South East Cameron Area South East Cameron Area Vermilion Area South Vermilion Area South Marsh Island Area South Marsh Island Area South Eugene Island Area Eugene Island Area South Ship Shoal Area Ship Shoal Area South South Pelto Area South Timbalier Area South Timbalier Area South Grand Isle Area Grand Isle Area South West Delta Area West Delta Area South Ewing Bank Area Mississippi Canyon Area VioscaKnoll Area VioscaKnoll Area Main Pass Area South & East Main Pass Area Breton Sound Area South Pass Area South South Pass Area South Mobile Area Chandeleur Sound Area Chandeleur Sound Area Addition Chandeleur Sound Area |
 14 Premier Combined GOM 3D Seismic Coverage |
 15 Stone’s Proposed Amberjack (MC 109/108) Acquisition Attractive deepwater opportunity • $191 million purchase price • Comparable to the overall cost per Boe of the Stone acquisition • Upside potential in booked reserves • Four moderate risk prospects identified • Use of infrastructure for future subsea tie-backs • Acquired net production of 5,000 Boe per day (pre-Katrina) • Obtain operatorship at closing Transaction highlights • Stone exercised its preferential right to purchase an additional interest • Subject to execution of purchase and sale agreement • Expect closing by early third quarter • Estimated restoration of production by year-end 2006 • Working interest resulting from acquisition: - MC 109: 100% WI (Up from 33.3%) - MC 108: 24.8% WI (Up from 16.5%) |
 16 Active Offshore Drillers - Shelf Source: James K. Dodson Company, based on number of operated wells drilled per
year HELIS EXXONMOBIL LLOG EXPL W & T ARENA OFFSHORE ENERGY PARTNERS BOIS D`ARC REMINGTON CHEVRON APACHE 2005 10 9 8 7 6 5 4 3 2 1 RANK HELIS W & T ANADARKO EXXONMOBIL NEWFIELD EXPL ENERGY PARTNERS LLOG EXPL ATP DEVON ENERGY W & T ENERGY PARTNERS APACHE ARENA OFFSHORE BOIS D`ARC BOIS D`ARC BOIS D`ARC LLOG EXPL REMINGTON REMINGTON STONE ENERGY STONE ENERGY ENERGY PARTNERS/STONE REMINGTON EL PASO CHEVRON APACHE LLOG EXPL APACHE CHEVRONTEXACO CHEVRONTEXACO 2005 Pro Forma 2004 2003 Federal & State waters =<600’ |
 17 High grade prospect inventory of combined company to achieve balanced drilling portfolio Apply EPL’s exploitation focus to Stone’s legacy fields • Initial review of GOM Shelf yielded 60+ low risk opportunities Tap into exploration upside in Stone’s legacy fields and acreage • Large GOM acreage position in favorable exploration fairways • EPL has interests in three farm-outs on Stone-owned blocks, one of which has been drilled and is successful Extensive 3D seismic coverage and undeveloped acreage to work • Shelf, deepwater and deep Shelf Expanded GOM Exploration & Exploitation Strategy |
 18 NEW ORLEANS NEW ORLEANS NEW ORLEANS HOUSTON HOUSTON HOUSTON GREATER BAY MARCHAND EAST BAY Update on EPL’s 2006 Exploratory Program – Shelf & Onshore SP 26 Denali ST 23 #CC4 ST WC 202 #1 ST 42 #2 ST 42 #3 WC 25 #1 GA 189 #1 EC 268 #1 ST 23 #SB-15 EI 312 #1 VR 101 #1 SP 39 #2 EC 34 #1 HI A315 #1 SMI 79 #1 SMI 79 #E-1 WC 312 #1 HI A306 #1 WC 2/3 #1 GI 66 #1 WC 176 #13 Exploratory Wells Scheduled (15) Successful Wells (5) Drilling (4) High Potential Wells (7) Unsuccessful Wells (3) 2006 Leases Sale Awards (8) EC 109 #A-6 EC 109 #5 Four Rivers Lakeside Barracuda Little Lake |
 19 NEW ORLEANS NEW ORLEANS NEW ORLEANS Update on EPL’s Deepwater 2006 Exploratory Program Acquired 25% working interest in 23 leases 13 identified prospects operated by Noble Energy First two wells drilled in 2006 were discoveries Minimum of two additional wells by 2008 Two additional leases awarded in March 2006 Central Gulf Lease Sale Redrock & Raton discoveries: - Multiple pay zones encountered - Currently under evaluation - Development plans being formulated Exploratory Wells Successful Wells (2) High Potential Wells (2) Joint venture with Noble Energy, a proven deepwater operator 2006 Lease Sale Awards (2) EPL Interests Raton Redrock Amberjack |
 20 Rocky Mountains and Williston Basin Low cost entry price • Rocky Mountain acquisition at GOM multiple Large acreage position Active drilling program with good exploration and exploitation opportunities • Low risk • Includes Bakken, Pinedale Anticline and Jonah Includes both natural gas wells (Rocky Mountains) and oil wells (Williston Basin) Net production as of 3/31/06: • Rocky Mountains: 22 Mmcfe/day • Williston Basin: 1,850 Boe/day |
 21 Significant Cost Savings Opportunities $4.50 $6.78 $8.28 $4.76 $4.93 $6.08 $5.98 $11.94 $0.00 $5.00 $10.00 $15.00 2003 2004 2005 1Q06 Lease Operating Expense (1) Stone EPL (1) Numbers may include differing components |
 22 Pro forma 2007 current estimate of ~$55 million annualized savings Synergies – Estimated Cost Savings Operational Synergies Annualized Savings: ~$25 million G&A Synergies Annualized Savings: ~$30 million • Personnel • Shore bases • Procurement • Cost tracking • Transportation • Insurance • Consultants • Compensation |
 23 Boat Loop Helicopter Base Helicopter Loop Synergies - Transportation Optimization 7 Helicopters 9 Boats Stone Current Total potential savings: $9 million 2 Helicopters 2 Boats 1 Part time boat EPL Current 8 12 Boats 5 9 Helicopters Proposed Current Potential Combined Offshore Transportation Loops |
 Rick
Bachmann Energy Partners,Ltd Acquisition of Stone Energy Corporation Acquisition of Stone Energy Corporation |
 25 RESERVE RANKINGS Pro Forma Peer Comparisons (1) PRODUCTION RANKINGS (1) 12/31/05 reserves and production, pro forma for any subsequent transactions. Source:
Company filings and Wall Street research. (2) As of 12/31/05; includes
reserve adds from Stone’s proposed Amberjack acquisition. Reserves
Company (Mboe) Annual Production Company (Mboe) Petro-Canada 117 Kerr-Mcgee 112 Nexen 65 Noble Energy 53 Pioneer Natural Resources 42 Newfield Exploration 40 Murphy Oil 39 Energy Partners, Ltd. Pro Forma (2) 26 Plains E&P 24 W&T Offshore 22 Cimarex 22 Stone Energy Corp. 18 Forest Oil 17 Mariner Energy 16 St. Mary Land & Exploration 15 Range Resources 15 Cabot Oil & Gas 14 PetroHawk / KCS 13 Ultra Petroleum 12 Whiting 12 Denbury Resources 12 Houston Exploration 11 Western Gas 10 Encore Acquisition Co. 10 Southwestern Energy 10 Swift Energy 10 Quicksilver Resources 9 Berry Petroleum 8 CNX Gas 8 Energy Partners, Ltd. 8 Comstock Resources 8 Bill Barrett Corporation 7 Unit Corp. 7 Rosetta Resources 5 Petro-Canada 1,005 Kerr-Mcgee 907 Pioneer Natural Resources 865 Noble Energy 847 Nexen 657 Plains E&P 401 Ultra Petroleum 337 Newfield Exploration 333 Whiting 264 Range Resources 234 Cimarex 232 Cabot Oil & Gas 222 Murphy Oil 220 Forest Oil 212 Encore Acquisition Co. 195 CNX Gas 188 Quicksilver Resources 186 Energy Partners, Ltd. Pro Forma (2) 167 Denbury Resources 167 PetroHawk / KCS 163 Western Gas 153 W&T Offshore 142 Southwestern Energy 138 St. Mary Land & Exploration 132 Berry Petroleum 131 Swift Energy 127 Stone Energy Corp. 108 Mariner Energy 107 Houston Exploration 103 ATP Oil & Gas 88 Comstock Resources 84 Unit Corp. 69 Rosetta Resources 60 Energy Partners, Ltd. 59 Bill Barrett Corporation 59 Bois d'Arc 54 Bois d'Arc 4 ATP Oil & Gas 3 |
 26 Strengthens and diversifies presence in GOM at attractive price Creates operational and administrative synergies that will provide
significant cost savings Enhances ability to compete domestically and internationally Augments EPL’s experienced operating, technical, financial and administrative staff Provides low cost entry into Rocky Mountains and Williston Basin with experienced team already in place A Winning Combination Combined company will have the scale and scope to drive continued growth and value creation |
 27 Appendix Recent Corporate Sales Transactions: 24.57 Gryphon Exploration Co. Woodside Petroleum Ltd 9/01/05 21.90 Forest Oil (GOM spin-off) Mariner Energy 9/12/05 41.69 Spinnaker Exploration Norsk Hydro ASA 9/19/05 30.04 Remington Oil & Gas Co Helix Energy Solutions 1/23/06 16.72 Marlin Energy LLC Energy XXI Gulf Coast Inc. 2/22/06 $/Boe Target Acquiror Date Recent Asset Sales Transactions: 22.19 Kerr-McGee Corp. W&T Offshore Inc. 1/24/06 48.00 Pioneer Natural Resources Marubeni Corp. 2/23/06 22.56 Houston Exploration Merit, Nippon Oil, Norsk 2/28/06 19.03 Houston Exploration Merit Energy Company 4/07/06 22.48 BP plc Apache Corp. 4/19/06 20.96 Pogo Producing Mitsui & Company 4/20/06 $23.15 Noble Energy Coldren Resources LP 5/16/06 $/Boe Seller Buyer Date |
 201 St. Charles Avenue,
Suite 3400 New Orleans, Louisiana 70170 (504) 569-1875 www.eplweb.com |