Endeavour to Acquire Operated Interests Expanding Its Position in Pennsylvania Marcellus Shale

HOUSTON, July 18, 2011 -

- Transaction strengthens
company’s position in one of the most active and lowest cost
U.S. onshore shale plays

- Endeavour also provides operational and financial
update

Endeavour International Corporation (NYSE: END) (LSE: ENDV)
announced today that it has entered into purchase and sale
agreements with SM Energy Company (NYSE:SM) and certain other
minority owners to acquire the leasehold and producing interests
held by SM Energy and its partners in the Marcellus shale in north
central Pennsylvania, as well as a pipeline and related facilities
for aggregate consideration of $110 million. The transaction
provides Endeavour with significant production and reserve
potential on acreage that is adjacent to the Company’s existing
Marcellus acreage and is readily available for development in one
of the most economically attractive shale gas plays in the United
States.  

The assets include the following:

• Approximately 50,000 net acres of leasehold with 100 percent
  operated working interests in McKean and Potter counties;
• Current production from three existing wells of approximately
  three to four million cubic feet of natural gas per day, including
  the Potato Creek #3H well that initially flowed 11 million cubic
  feet of gas per day and is expected to recover in excess of 4
  billion cubic feet of gas;
• 100 percent ownership of Potato Creek LLC, which owns a
  midstream gathering system and related facilities in southern
  McKean County, including a 10-mile 16″ trunkline connected and
  flowing to Tennessee Gas Pipeline’s 24″ mainline; and
• Proprietary and fully processed 3-D seismic survey covering the
  entire Potato Creek lease block.

Following the completion of the transaction, Endeavour’s
leasehold interests in the Marcellus Shale will total approximately
93,000 gross (68,000 net) acres. A new 7-year lease will be issued
at closing on the key 21,000 net acre Potato Creek block that
requires only five wells to be drilled in the first three years.
 Minimal capital is required over the next three years to hold
all acreage in McKean County, including the key Potato Creek
leasehold. The transaction is expected to close within 60 days and
is expected to be financed with proceeds from the issuance of
convertible debt securities.

“This acquisition represents a significant step forward in the
growth of our domestic onshore business in a play that offers some
of the highest returns in the United States today,” said William L.
Transier, chairman, chief executive officer and president.
 ”The acreage is located on trend with several major industry
developments and complements our existing acreage position in
Cameron County immediately to the south. Our development model
indicates recoverable natural gas potential from 1.0 to 1.3
trillion cubic feet with more than 300 identified drilling
locations on our McKean and Cameron County leasehold.  As
operator of these assets, including the gathering infrastructure,
we have the opportunity to accelerate our development plans in an
effort to realize the value of our investment while expanding our
position in this three county area.”

Operational and Financial Update

Bacchus Update

The Rowan Gorilla VII rig has arrived at the Bacchus field and
has commenced drilling operations for the three planned development
wells.  The Bacchus development is located in the Central UK
North Sea and Endeavour has a 30% working interest in the field.
 

Senior Term Loan

In support of the Company’s growth plans, Cyan Partners and
certain lenders under the Senior Term Loan have amended the terms
of the Company’s Senior Term Loan and agreed to expand the facility
by $75 million. Endeavour intends to use this additional capital to
accelerate its development activities throughout the Company,
particularly its Greater Rochelle development and its expanded
position in Pennsylvania following the Marcellus acquisition.

Endeavour International Corporation is an oil and gas
exploration and production company focused on the acquisition,
exploration and development of energy reserves in the North Sea and
the United States. For more information, visit href="www.endeavourcorp.com/">www.endeavourcorp.com
.

Additional information for
investors:

This press release contains
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements include statements
that express a belief, expectation, or intention, as well as those
that are not statements of historical fact, and may include
projections and estimates concerning the timing and success of
specific projects and our future production, revenues, income and
capital spending. Our forward-looking statements are generally
accompanied by words such as “estimate,” “project,” “predict,”
“believe,” “expect,” “anticipate,” “potential,” “plan,” “goal” or
other words that convey the uncertainty of future events or
outcomes. We caution you not to rely on them unduly. We have based
these forward-looking statements on our current expectations and
assumptions about future events. While our management considers
these expectations and assumptions to be reasonable, they are
inherently subject to significant business, economic, competitive,
regulatory and other risks, contingencies and uncertainties, most
of which are difficult to predict and many of which are beyond our
control. These risks, contingencies and uncertainties, which may
not be exhaustive, relate to, among other matters, the following:
discovery, estimation, development and replacement of oil and gas
reserves; decreases in proved reserves due to technical or economic
factors; drilling of wells and other planned exploitation
activities; timing and amount of future production of oil and gas;
the volatility of oil and gas prices; availability and terms of
capital; operating costs such as lease operating expenses,
administrative costs and other expenses; our future operating or
financial results; amount, nature and timing of capital
expenditures, including future development costs; cash flow and
anticipated liquidity; availability of drilling and production
equipment; uncertainties related to drilling and production
operations in a new region; cost and access to natural gas
gathering, treatment and pipeline facilities; business strategy and
the availability of acquisition opportunities; and factors not
known to us at this time. Any of these factors, or any combination
of these factors, could materially affect our future financial
condition or results of operations and the ultimate accuracy of a
forward-looking statement. The forward-looking statements are not
guarantees of our future performance, and our actual results and
future developments may differ materially from those projected in
the forward-looking statements. In addition, any or all of our
forward-looking statements included in this release may turn out to
be incorrect. They can be affected by inaccurate assumptions we
might make or by known or unknown risks and uncertainties,
including those included in our Annual Report on Form 10-K for the
year ended December 31, 2010.

Reserve engineering is a process of estimating underground
accumulations of oil and natural gas that cannot be measured in an
exact way. The accuracy of any reserve estimate depends on the
quality of available data, the interpretation of such data and
price and cost assumptions made by our reserve engineers. In
addition, the results of drilling, testing and production
activities may justify revisions of estimates that were made
previously. If significant, such revisions would change the
schedule of any further production and development drilling.
Accordingly, reserve estimates may differ from the quantities of
oil and natural gas that are ultimately recovered.  We use may
use certain terms in our news releases, such as “resource
potential,” that the SEC’s guidelines strictly prohibit us from
including in filings with the SEC. Investors are urged to also
consider closely the disclosure in our filings with the SEC,
available from our website at www.endeavourcorp.com.
Endeavour is also subject to the requirements of the
London Stock Exchange and considers the disclosures in
this release to be appropriate and/or required under the guidelines
of that exchange.

Endeavour Investor Relations, Mike Kirksey, +1-713-307-8788, or Darcey Matthews, +1-713-307-8711; or UK Media, Pelham Public Relations, Philip Dennis, +44-(0)207-861-3919, or Henry Lerwill, +44-(0)207-861-3169