Energy XXI is an independent oil & natural gas exploration and production company whose growth strategy emphasizes acquisitions, enhanced by its value-added organic drilling program.

Remuneration Committee Charter

The Board of Directors (the "Board") of Energy XXI (Bermuda) Limited (the "Company") has established the Remuneration Committee of the Board (the "Remuneration Committee") with the authority, responsibility and duties described in this Remuneration Committee Charter.

Purposes

The purposes of the Remuneration Committee are to:

Review, evaluate, and approve the agreements, plans, policies and programs of the Company to compensate the officers and directors of the Company.
Review and discuss with the Company's management the Compensation Discussion and Analysis ("CD&A") to be included in the Company's proxy statement for its annual meeting of shareholders ("Proxy Statement") and to determine whether to recommend to the Board that the CD&A be included in the Proxy Statement, in accordance with the applicable rules and regulations.
Produce a report on executive compensation (the "Remuneration Committee Report") each year for publication in the Proxy Statement, in accordance with the applicable rules and regulations.
Otherwise discharge the Board's responsibilities relating to compensation of the Company's officers and directors.
Perform such other functions as the Board may assign to the Remuneration Committee from time to time.

Committee Membership

The Remuneration Committee shall consist of at least three members. Each member of the Remuneration Committee shall be a member of the Board. One of the members shall serve as the chairperson of the Remuneration Committee (the "Chairperson"). Each member of the Remuneration Committee shall satisfy the independence requirements of the rules of The NASDAQ Stock Market, LLC and the applicable rules and regulations of the Securities and Exchange Commission.

All Remuneration Committee members shall also be "non-employee directors" as defined by Rule 16b 3 under the Securities Exchange Act of 1934, as amended, and "outside directors" as defined by Section 162(m) of the Internal Revenue Code, as amended. Notwithstanding the foregoing membership requirements, no action of the Remuneration Committee shall be invalid by reason of any such requirement not being met at the time such action is taken.

The Board shall appoint the members of the Remuneration Committee. The Chairperson shall be designated by the Board or, if no such designation is made, shall be selected by the affirmative vote of the majority of the Remuneration Committee. The Board may remove or replace the Chairperson and any other member of the Remuneration Committee at any time.

Committee Authority and Responsibilities

The Remuneration Committee is delegated all authority of the Board as may be required or advisable to fulfill the purposes of the Remuneration Committee. The Remuneration Committee may form and delegate some or all of its authority to subcommittees when it deems appropriate. Without limiting the generality of the preceding statements, the Remuneration Committee shall have authority, and is entrusted with the responsibility, to take the following actions.

Each year the Remuneration Committee shall:
- review and approve corporate goals and objectives relevant to the compensation of the Company's Chief Executive Officer;
- evaluate the performance of the Chief Executive Officer in light of those goals and objectives; and
- set the compensation of the Chief Executive Officer based on this evaluation.
Each year the Remuneration Committee shall review and make a recommendation to the Board regarding the compensation of all directors.
Each year the Remuneration Committee shall review and set the compensation of the officers of the Company with the Chief Executive Officer present for such review and determination.
Each year the Remuneration Committee shall review and make recommendations to the Board with respect to incentive-compensation plans and equity-based plans. Shareholders shall be given the opportunity to vote on equity-compensation plans, as required by law, applicable listing standards, the Company's articles of incorporation and bylaws, or the Company's corporate governance guidelines.
Each year the Remuneration Committee shall review and approve, for the Chief Executive Officer and the officers of the Company, all annual and other compensation arrangements and components, which may include the following:
- the annual base salary level;
- long term incentive compensation policies and amounts;
- incentives and awards under the bonus program; and
- any special or supplemental benefits, including any perquisites or personal benefits.

In determining the long-term incentive component of compensation, the Remuneration Committee should consider the Company's performance and relative shareholder return, the value of similar incentive awards to Chief Executive Officers and senior executives at comparable companies, and the awards given to the Chief Executive Officer and the senior executives in past years.

The Remuneration Committee shall review and approve, for the Chief Executive Officer and the senior executives of the Company, all perquisites and other personal benefits, any employment agreements, severance arrangements, and change-in-control agreements and provisions.
The Remuneration Committee shall review and approve, or review and recommend to the Board for its approval of, any transaction in equity securities of the Company, or derivatives of those equity securities, between the Company and any officer or director of the Company who is subject to the reporting and short-swing liability provisions of Section 16 of the Securities Exchange Act of 1934, as amended.
The Remuneration Committee shall review and discuss with the Company's management the CD&A to be included in the Proxy Statement and, based on that review, determine whether to recommend to the Board that the CD&A be included in the Proxy Statement, in accordance with the applicable rules and regulations.
Each year, the Remuneration Committee shall prepare a Remuneration Committee Report and publish the report in the Proxy Statement, in accordance with the applicable rules and regulations.
The Remuneration Committee shall have the sole authority to retain, amend the engagement with, and terminate any compensation consultant to be used to assist it in the evaluation of director, Chief Executive Officer or officer compensation. The Remuneration Committee shall have sole authority to approve the consultant's fees and other retention terms and shall have authority to cause the Company to pay the fees and expenses of such consultants. The Remuneration Committee shall also have authority to obtain advice and assistance from internal or external legal, accounting or other advisors, to approve the fees and expenses of such outside advisors, and to cause the Company to pay the fees and expenses of such outside advisors.

Procedures

Meetings. The Remuneration Committee shall meet at the call of the Chairperson, two or more members of the Remuneration Committee, or the Chairman of the Board. Meetings may, at the discretion of the Remuneration Committee, include members of the Company's management, independent consultants, and such other persons as the Remuneration Committee or the Chairperson may determine. The Remuneration Committee may meet in person, by telephone conference call, or in any other manner in which the Board is permitted to meet under law or the Company's limited liability company agreement.
Quorum and Approval. A majority of the members of the Remuneration Committee shall constitute a quorum. The Remuneration Committee shall act on the affirmative vote of a majority of members present at a meeting at which a quorum is present. The Remuneration Committee may also act by unanimous written consent in lieu of a meeting.
Rules. The Remuneration Committee may determine additional rules and procedures, including designation of a chairperson pro tempore in the absence of the Chairperson, at any meeting thereof.
Reports. The Remuneration Committee shall maintain minutes of its meetings and make regular reports to the Board, directly or through the Chairperson.
Review of Charter. Each year the Remuneration Committee shall review the need for changes in this Charter and recommend any proposed changes to the Board for approval.
Performance Review. Each year the Remuneration Committee shall review and evaluate its own performance and shall submit itself to the review and evaluation of the Board.
Fees. Each member of the Remuneration Committee shall be paid the fee set by the Board for his or her services as a member of, or Chairperson of, the Remuneration Committee.
Website Posting. This Charter shall be posted on the Company's website as required by applicable rules and regulations. In addition, the Company shall disclose in its Proxy Statement that a copy of this Charter is available on the Company's website.