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Plea Agreement Ends Investigation of Energy Partners East Bay Field

New Orleans-based Energy Partners Ltd. (EPL) has reached a resolution in the federal investigation into possible environmental violations at its East Bay field in the Gulf of Mexico (GOM), it said on Friday.

Under a plea agreement with the U.S. Department of Justice, EPL entered a plea to one strict liability, misdemeanor violation of the River and Harbors Act -- depositing refuse in a navigable river without a permit -- in the U.S. District Court for the Eastern Division of Louisiana. EPL agreed to pay a $75,000 fine and a $25,000 community service payment to the Louisiana State Police Right to Know Fund. EPL also is subject to inactive probation for one year.

The plea agreement concludes the investigation into possible environmental violations at the company's East Bay field arising out of on-site federal inspections conducted in late 2005 and early 2006, when EPL was in the process of restoring field operations following extensive damage caused by the hurricanes of 2005. EPL said ongoing field operations were unaffected by the proceedings.

The federal investigation came to light last year when EPL said it had retained a law firm to conduct an independent investigation into possible environmental violations at the East Bay Field (see Daily GPI, June 11, 2007). Representatives of the U.S. Attorney for the Eastern District of Louisiana in New Orleans, the Environmental Protection Agency and the U.S. Coast Guard had informed the company that they were conducting an investigation into possible criminal violations arising out of the on-site inspections.

An estimated 65-75% of EPL's 4Q2007 production volume (21,000-23,000 boe/d) was natural gas. The company's operations in the East Bay field, located at the mouth of the Mississippi River, are primarily oil and include some gas, a company spokesman said. The East Bay field, EPL's largest single holding, is the sixth largest field in the GOM shelf.

The independent's operations are focused along the U.S. Gulf Coast, both onshore in South Louisiana and offshore in the shallow-to-moderate depths of the GOM shelf.

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