UPDATE: Jefferies Reiterates Hold on Energy XXI; Lowers Production Outlook

Jefferies maintained Energy XXI

with a Hold rating and a $35.00 price target. Jefferies analyst Biju Z Perincheril wrote, "EXXI expects fiscal 3q volumes to be below prior guidance. We are also lowering our fiscal 4q'13/2014 forecasts. As a result, the free cash flow story has weakened, in our view. APA JV augments exploration portfolio. … Due to our reduced production outlook, we now project just a small cash flow surplus in FY14 (less than $50mm) against a capex forecast of $800mm on a $3.75 / $92.50 price deck. We previously projected a surplus of more than $100mm." Energy XXI closed at $30.04 on Tuesday.