750199--8/5/2009--ENERGY_PARTNERS

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{gas, price, oil}

{loss, insurance, financial}

{stock, price, share}

{investment, property, distribution}

{condition, economic, financial}

{capital, credit, financial}

{financial, litigation, operation}

{regulation, change, law}

{tax, income, asset}

{operation, natural, condition}

{provision, law, control}

{personnel, key, retain}

{cost, regulation, environmental}

{loan, real, estate}

{regulation, government, change}

{cost, contract, operation}

{acquisition, growth, future}

{debt, indebtedness, cash}

Risks Relating to Energy Partners, Ltd. We are currently in proceedings under Chapter 11 of the Bankruptcy Code. There is no guarantee that we will successfully emerge from bankruptcy. As part of our bankruptcy proceedings we are negotiating the Exit Facility but there is no guarantee that we will be able to successfully close the Exit Facility. If we are unable to successfully complete the Chapter 11 proceedings or close the Exit Facility, we may be forced to liquidate. We faced significant liquidity challenges in 2009 that led to our Chapter 11 filings and could have ongoing material and adverse effects on our business operations even after we emerge from bankruptcy. Even if we successfully enter into the Exit Facility and emerge from bankruptcy, we will continue to have substantial capital needs which may not be available in the future. No established trading market exists for the common stock we anticipate issuing upon our emergence from bankruptcy, and if one develops, it may not be liquid. We do not anticipate paying dividends on our common stock in the foreseeable future. Failure to maintain compliance with the listing standards of the NYSE has resulted in the delisting of our common stock. Our credit ratings have been reduced and withdrawn and failure to regain and improve our credit ratings could have a material adverse effect on our business. The MMS may shut in production on the outer shelf in connection with our failure to provide cash or other adequate security to secure our obligations to plug, abandon and decommission our wellbores and related pipelines and facilities. We have been requested to provide additional reserves with respect to our outstanding surety bonds. Our current financial condition has adversely affected our business operations and our business prospects. Our asset carrying values have been impaired based, in part, on oil and natural gas prices as of December 31, 2008 and they may be further impaired if oil and gas prices continue to decline from prices in effect as of that date. Our current operations are concentrated in the Gulf of Mexico, and a significant part of the value of our production and reserves is concentrated in two geographic areas. Because of this concentration, any production problems or inaccuracies in reserve estimates related to these areas could have a material adverse effect on our business. The relatively steep decline curves generally associated with oil and gas properties located in the Gulf of Mexico and the Gulf Coast region subjects us to higher reserve replacement needs. Our exploration, exploitation and production operations in the deepwater Gulf of Mexico area present unique operating risks. Properties we have acquired may not produce as projected, and we may not have fully identified liabilities associated with these properties or obtained adequate protection from sellers against liabilities. Periods of high cost or lack of availability of drilling rigs, equipment, supplies, personnel and oilfield services could adversely affect our ability to execute on a timely basis our exploration and development plans. Loss of key management and failure to attract qualified management could negatively impact our operations. Provisions in our organizational documents and under Delaware law could delay or prevent a change in control of our company, which could adversely affect the price of our common stock. Risks Relating to the Oil and Natural Gas Industry Exploring for and producing oil and natural gas are high-risk activities with many uncertainties that could adversely affect our business, financial condition or results of operations. The continuing crisis in the financial and credit markets, and volatility in oil and natural gas prices may affect our ability to obtain funding or to obtain funding on acceptable terms. These factors may hinder or prevent us from meeting our future capital needs and/or continuing to meet our obligations and conduct our business. A substantial or extended decline in oil and natural gas prices may have a material adverse effect on our business, financial condition, results of operations, cash flows and our ability to meet our debt obligations, operating cost requirements, capital expenditure requirements and other financial commitments. We may incur substantial losses and be subject to substantial liability claims as a result of our oil and natural gas operations. Our insurance coverage may not be sufficient or may not be available to cover some of these losses and claims. Reserve estimates depend on many assumptions that may prove to be inaccurate. Any material inaccuracies in these reserve estimates or underlying assumptions will materially affect the quantities and estimated values of our reserves. If we are unable to replace the reserves that we have produced, our reserves and revenues will decline. Our business requires substantial capital investment and maintenance expenditures, and our capital resources may not be adequate to provide for all of our cash requirements. Impediments to transporting our products may limit our access to oil and natural gas markets or delay our production. Our ability to collect payments from our partners depends on the partners creditworthiness. We are exposed to counterparty risk through our hedging activities using commodity derivative instruments and through other arrangements we enter into with financial and other institutions. We are subject to extensive governmental laws and regulations, including environmental regulations, which can adversely affect the cost, manner or feasibility of doing business and could result in restrictions on our operations or civil or criminal liability. If third party pipelines and other facilities interconnected to our natural gas pipelines and facilities become partially or fully unavailable to transport natural gas and NGLs, our revenues could be adversely affected. A change in the jurisdictional characterization of some of our assets by federal, state or local regulatory agencies or a change in policy by those agencies may result in increased regulation of our assets, which may cause our revenues to decline and operating expenses to increase. Should we fail to comply with all applicable FERC administered statutes, rules, regulations and orders, we could be subject to substantial penalties and fines. Competition in the oil and natural gas industry is intense, which may adversely affect us. Recent adverse publicity about us, including our Chapter 11 filings, may harm our ability to compete in a highly competitive environment.

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750199--8/5/2009--ENERGY_PARTNERS_LTD