Bankruptcy

As previously disclosed, on May 1, 2009, Energy Partners, Ltd. (the "Company", "we", "our", "us") and certain of its subsidiaries (collectively, the "Debtors") filed voluntary petitions (In re: Energy Partners, Ltd., et. al., Case No. 09-32957) for reorganization (the "Chapter 11 Cases") under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq., as amended (the "Bankruptcy Code") in the United States Bankruptcy Court for the Southern District of Texas, Houston Division (the "Bankruptcy Court"). On September 16, 2009, the Debtors filed their second amended joint plan of reorganization, as modified as of September 16, 2009 (the "Plan"), with the Bankruptcy Court. On September 17, 2009, the Bankruptcy Court entered an order (the "Confirmation Order") confirming the Plan. On September 21, 2009 (the "Effective Date"), the Debtors consummated the transactions contemplated by the Plan. A copy of the press release announcing the Debtors' emergence from Chapter 11 is filed as Exhibit 99.1 hereto.

Exit Facility

On September 21, 2009, the Company entered into a Credit Agreement (the "Credit Agreement") with General Electric Capital Corporation, as administrative agent (the "Agent"), and the financial institutions party thereto as lenders (the "Lenders").

The Credit Agreement provides a senior secured credit facility consisting of
(a) a one-year, $25 million term loan and (b) a three-year revolving credit facility that may be used for revolving credit loans and letters of credit from time to time up to a maximum principal amount of $125 million, subject to the limitations described below in this paragraph. The maximum amount of letters of credit that may be outstanding at any one time is $20 million and the amount available under the revolving credit facility is limited by the borrowing base. The initial borrowing base at closing is $70 million, inclusive of the $25 million term loan. The borrowing base will be redetermined semi-annually based on the proved reserves of the oil and natural gas properties that serve as collateral for this credit facility. Upon any repayment of the term loan, the borrowing base will be reduced by the principal amount of such repayment.

The Credit Agreement permits both base rate based borrowings and LIBOR borrowings, in each case plus a floating spread. The spread will float up or down based on the Company's utilization under the credit facilities (the "Utilization Level"). The spread can range from 3.00% to 3.50% for base rate borrowings and 4.00% to 4.50% for LIBOR borrowings. The Credit Agreement includes a LIBOR floor of 2.00%. The Company will incur a commitment fee on the unused portion of the borrowing base at a rate ranging from 0.75% to 1.00% based upon the Utilization Level.

The term loan must be repaid in principal installments of $2,083,333.33 each month with any remaining principal balance due on September 21, 2010. The . . .

Pursuant to the Plan, on the Effective Date, the following material agreements were terminated:

Stock Option Plans

All outstanding stock option or other equity awards either became fully vested and were deemed exercised or were cancelled and no distribution will be made on account thereof. All existing stock and incentive compensation plans of the Company were deemed cancelled under the Plan.

Senior Notes

The Company's (i) 8.75% unsecured notes due in 2010, (ii) 9.75% senior unsecured notes due 2014 and (iii) senior floating notes due 2013 (collectively, the "Senior Notes"), and the related two indentures were deemed cancelled as of the Effective Date. Each holder of Senior Notes received, in exchange for its total claim (including principal and interest), its pro rata portion of 95% of the reorganized EPL common stock to be issued pursuant to the Plan, subject to dilution by the issuance of shares of common stock upon the exercise of options, or otherwise, pursuant to the Company's 2009 LTIP.

Subsidiary Guarantees

All subsidiary guarantees for the Senior Notes provided by certain of the Company's subsidiaries were terminated and discharged as of the Effective Date.

Change of Control Severance Agreements

Change of Control Severance Agreements between the Company and each of Stephen P. Longon and John H. Peper were terminated and the Company's obligations thereunder were discharged.

The information in Item 1.01 of this Current Report on Form 8-K under the heading "Bankruptcy" is incorporated by reference herein.

Issuance of New Common Stock

On the Effective Date, each holder of the Company's Senior Notes received, in exchange for its total claim (including principal and interest), its pro rata portion of 95% of the Company's common stock to be issued pursuant to the Plan, subject to dilution by the issuance of shares of common stock upon the exercise of options, or otherwise, pursuant to the Company's 2009 LTIP.

On the Effective Date, each holder of the Company's common stock prior to the Effective Date received, in full satisfaction of and in exchange for its common stock interests its pro rata portion of 5% of the common stock that was issued pursuant to the Plan, subject to dilution by the issuance of shares of common stock upon the exercise of options, or otherwise, pursuant to the Company's 2009 LTIP.

As of the Effective Date, the Company's equity capitalization consists solely of
(i) 38 million shares of common stock issued to the holders of Senior Notes and
(ii) 2 million shares of common stock issued to the holders of equity interests in the Company immediately prior to the Effective Date. The Company has reserved up to 1,237,000 shares, constituting 3% of its common stock on a fully diluted basis, for issuance of (i) restricted shares and (ii) shares for the exercise of options, in each case issued pursuant to the 2009 LTIP.

The information in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

Pursuant to the Plan and the Second Amended and Restated Certificate of Incorporation (the "Restated Certificate"), on the Effective Date, the reorganized Company issued (i) 38 million shares of new common stock to the holders of Senior Notes and (ii) 2 million shares of new common stock to the holders of existing common stock interests. The common stock issued pursuant to the Plan was issued pursuant to Section 1145 of the Bankruptcy Code, which exempts the issuance of securities from the registration requirements of the Securities Act of 1933, as amended.

The information included in Item 1.01 of this Current Report on Form 8-K is incorporated by reference herein.

The information included in Item 1.03 of this Current Report on Form 8-K is incorporated by reference herein.

Press Release

On September 21, 2009, the Company filed a press release announcing its emergence from bankruptcy, a copy of which is attached hereto as Exhibit 99.1.

Exhibit No.    Description
10.1*          Credit Agreement by and among Energy Partners, Ltd., as Borrower,
               General Electric Capital Corporation, as Administrative Agent, and
               certain financial institutions, as Lenders dated September 21, 2009

10.2*          Indenture by and among Energy Partners, Ltd., as Issuer, the Guarantors
               named therein and The Bank of New York Mellon Trust Company, N.A. as
               Trustee dated September 21, 2009

10.3*          Note Purchase Agreement by and among Energy Partners, Ltd., the
               Guarantors named therein and the purchasers named therein dated
               September 21, 2009

10.4*          Exchange Agreement between Energy Partners, Ltd. and Mellon Investor
               Services LLC (operating with the service name BNY Mellon Shareowner
               Services), as Agent dated September 15, 2009

10.5*          Form of 2009 Long Term Incentive Plan Option Award Agreement

10.6*          Form of 2009 Long Term Incentive Plan Restricted Stock Agreement

99.1*          Press Release dated September 21, 2009

* Furnished herewith