##### Table of Contents



United States
Securities and Exchange Commission
 Washington, D.C. 20549
 Form 10-Q
  þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended June 30, 2007
 or
 o
    
    Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission file number: 1-13463
 Endeavour International Corporation
  Nevada
    
    88-0448389(State or other jurisdiction of incorporation 
or organization)
    
    (I.R.S. Employer Identification No.)
 1000 Main Street, Suite 3300, Houston, Texas 77002
 (713) 307-8700
 None
  þ o
 o þ o
 o þ




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##### 



Endeavour International Corporation
 Index
 Part I: Financial InformationItem 1: Financial StatementsCondensed Consolidated Balance Sheets
    
    
    1Condensed Consolidated Statements of Operations
    
    
    2Condensed Consolidated Statements of Cash Flows
    
    
    3Notes to Condensed Consolidated Financial Statements
    
    
    4Item 2: Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    15Item 3: Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4: Controls and Procedures
    
    
    23Part II. Other InformationItem 1A: Risk Factors
    
    
    24Item 4: Submission of Matters to a Vote of Security Holders
    
    
    24Item 6: Exhibits
    
    
    25Signatures
    
    
    26Form of 2007 Incentive Plan Incentive Award AgreementCertification of CEO Pursuant to Section 302Certification of CAO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CAO Pursuant to Section 906




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##### Table of Contents



Part I: Financial Information
 
 Item 1: Financial Statements
 
 Endeavour International Corporation
Condensed Consolidated Balance Sheets
 June 30, 2007
    
    December 31, 2006AssetsCurrent Assets:Cash and cash equivalents
    
    $
    25,847
    
    
    $
    39,814Restricted cash
    
    
    22,000
    
    
    
    1,867Accounts receivable
    
    
    23,599
    
    
    
    61,104Prepaid expenses and other current assets
    
    
    52,025
    
    
    
    25,783Total Current Assets
    
    
    123,471
    
    
    
    128,568Property and Equipment, Net
    
    
    328,346
    
    
    
    319,315Goodwill
    
    
    291,752
    
    
    
    291,752Other Assets
    
    
    24,582
    
    
    
    34,835Total Assets
    
    $
    768,151
    
    
    $
    774,470Liabilities and Stockholders EquityCurrent Liabilities:Accounts payable
    
    $
    49,223
    
    
    $
    36,928Current maturities of debt
    
    
    17,000
    
    
    
    2,410Accrued expenses and other
    
    
    34,771
    
    
    
    41,799Total Current Liabilities
    
    
    100,994
    
    
    
    81,137Long-Term Debt
    
    
    256,250
    
    
    
    303,840Deferred Taxes
    
    
    137,278
    
    
    
    115,155Other Liabilities
    
    
    43,686
    
    
    
    32,510Total Liabilities
    
    
    538,208
    
    
    
    532,642Commitments and ContingenciesSeries C Convertible Preferred Stock
(Liquidation preference: $127,788)
    
    
    124,603
    
    
    
    125,000Stockholders Equity:Series B Preferred stock (Liquidation
preference: $2,721)
    
    
    
    
    
    
    Common stock; shares issued and
outstanding  121,720,662 at 2007 and
118,577,369 shares at 2006
    
    
    122
    
    
    
    119Additional paid-in capital
    
    
    234,413
    
    
    
    226,988Accumulated other comprehensive loss
    
    
    120
    
    
    
    Accumulated deficit
    
    
    (129,315
    )
    
    
    (110,279
    )Total Stockholders Equity
    
    
    105,340
    
    
    
    116,828Total Liabilities and Stockholders Equity
    
    $
    768,151
    
    
    $
    774,470
 
 1




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Endeavour International Corporation
Condensed Consolidated Statement of Operations
(Unaudited)
 Three Months
    
    Six MonthsEnded June 30,
    
    Ended June 30,2007
    
    2006
    
    2007
    
    2006Revenues
    
    $
    31,621
    
    
    $
    7,645
    
    
    $
    74,411
    
    
    $
    16,121Cost of Operations:Operating expenses
    
    
    9,728
    
    
    
    3,011
    
    
    
    20,438
    
    
    
    5,156Depreciation, depletion and amortization
    
    
    15,247
    
    
    
    2,231
    
    
    
    34,461
    
    
    
    4,527Impairment of oil and gas properties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    849General and administrative
    
    
    5,160
    
    
    
    5,298
    
    
    
    10,527
    
    
    
    10,749Total Expenses
    
    
    30,135
    
    
    
    10,540
    
    
    
    65,426
    
    
    
    21,281Income (Loss) From Operations
    
    
    1,486
    
    
    
    (2,895
    )
    
    
    8,985
    
    
    
    (5,160
    )Other Income (Expense):Commodity derivatives:Realized gains
    
    
    3,943
    
    
    
    
    
    
    
    15,015
    
    
    
    Unrealized losses
    
    
    (12,612
    )
    
    
    (3,302
    )
    
    
    (28,308
    )
    
    
    (3,302
    )Interest income
    
    
    582
    
    
    
    548
    
    
    
    1,186
    
    
    
    1,169Interest expense
    
    
    (4,155
    )
    
    
    (1,179
    )
    
    
    (8,928
    )
    
    
    (2,343
    )Other
    
    
    (1,321
    )
    
    
    (531
    )
    
    
    (1,880
    )
    
    
    (780
    )Total Other Expense
    
    
    (13,563
    )
    
    
    (4,464
    )
    
    
    (22,915
    )
    
    
    (5,256
    )Loss Before Income Taxes
    
    
    (12,077
    )
    
    
    (7,359
    )
    
    
    (13,930
    )
    
    
    (10,416
    )Income Tax Expense (Benefit)
    
    
    (1,873
    )
    
    
    2,991
    
    
    
    (582
    )
    
    
    6,832Net Loss
    
    
    (10,204
    )
    
    
    (10,350
    )
    
    
    (13,348
    )
    
    
    (17,248
    )Preferred Stock Dividends
    
    
    2,844
    
    
    
    39
    
    
    
    5,688
    
    
    
    79Net Loss to Common Stockholders
    
    $
    (13,048
    )
    
    $
    (10,389
    )
    
    $
    (19,036
    )
    
    $
    (17,327
    )Basic and Diluted Loss per Common Share
    
    $
    (0.11
    )
    
    $
    (0.13
    )
    
    $
    (0.16
    )
    
    $
    (0.22
    )Weighted Average Number of Common Shares Outstanding:Basic and Diluted:
    
    
    123,661
    
    
    
    79,036
    
    
    
    121,133
    
    
    
    78,687
  2




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Endeavour International Corporation
Condensed Consolidated Statement of Cash Flows
(Unaudited)
 Six Months Ended June 30,2007
    
    2006Cash Flows from Operating Activities:Net loss
    
    $
    (13,348
    )
    
    $
    (17,248
    )Adjustments to reconcile net loss to net cash used
in operating activities:Depreciation, depletion and amortization
    
    
    34,461
    
    
    
    4,527Impairment of oil and gas properties
    
    
    
    
    
    
    849Deferred tax expense (benefit)
    
    
    (940
    )
    
    
    1,549Unrealized loss on commodity derivatives
    
    
    28,308
    
    
    
    3,302Amortization of non-cash compensation
    
    
    2,735
    
    
    
    6,038Other
    
    
    933
    
    
    
    276Changes in assets and liabilities:(Increase) decrease in receivables
    
    
    37,498
    
    
    
    (1,390
    )Decrease in other current assets
    
    
    (16,602
    )
    
    
    (8,698
    )Increase (decrease) in accounts payable
and accrued expenses
    
    
    5,368
    
    
    
    (3,123
    )Net Cash Provided by (Used in) Operating Activities
    
    
    78,413
    
    
    
    (13,918
    )Cash Flows From Investing Activities:Capital expenditures
    
    
    (41,707
    )
    
    
    (21,627
    )Acquisitions, net of cash acquired
    
    
    
    
    
    
    (11,634
    )(Increase) decrease in restricted cash
    
    
    (20,133
    )
    
    
    3,650Net Cash Used in Investing Activities
    
    
    (61,840
    )
    
    
    (29,611
    )Cash Flows From Financing Activities:Repayments of borrowings
    
    
    (40,000
    )
    
    
    Borrowings under debt agreements
    
    
    7,000
    
    
    
    Proceeds from warrant and stock option exercises
    
    
    
    
    
    
    3,210Other financing
    
    
    (157
    )
    
    
    Net Cash Provided by (Used in) Financing Activities
    
    
    (33,157
    )
    
    
    3,210Net Decrease in Cash and Cash Equivalents
    
    
    (16,584
    )
    
    
    (40,319
    )Effect of Foreign Currency Changes on Cash
    
    
    2,617
    
    
    
    2,773Cash and Cash Equivalents, Beginning of Period
    
    
    39,814
    
    
    
    76,127Cash and Cash Equivalents, End of Period
    
    $
    25,847
    
    
    $
    38,581
 
 3




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 1  General
   Basis of Presentation and Use of Estimates
   Loss Per Share
  4




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
   (Amounts in thousands)
    
    June 30,2007
    
    2006Warrants, options and stock-based compensation
    
    
    36
    
    
    
    2,058Convertible debt
    
    
    16,185
    
    
    
    16,185Convertible preferred stock
    
    
    50,000
    
    
    
    Common shares potentially issuable
    
    
    66,221
    
    
    
    18,243
 New Accounting Developments
  Note 2  Stock-Based Compensation Arrangements
  5




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
  Stock Options
   Six months ended June 30,2007
    
    2006Risk-free rate
    
    
    4.7
    %
    
    
    4.3
    %Expected years until exercise
    
    
    4
    
    
    
    4Expected stock volatility
    
    
    42.4
    %
    
    
    38
    %Dividend yield
    
    
    
    
    
    
    
  Weighted
    
    WeightedNumber of
    
    Average
    
    AverageShares
    
    Exercise
    
    Contractual
    
    AggregateUnderlying
    
    Price per
    
    Life in
    
    Intrinsic(Amounts in thousands, except per share data)
    
    Options
    
    Share
    
    Years
    
    ValueBalance outstanding  January 1, 2007
    
    
    5,404
    
    
    $
    3.19Granted
    
    
    145
    
    
    $
    2.07Forfeited
    
    
    (412
    )
    
    $
    4.54Expired
    
    
    (7
    )
    
    $
    4.00Balance outstanding  June 30, 2007
    
    
    5,130
    
    
    $
    3.05
    
    
    
    2.3
    
    
    
    Currently exercisable  June 30, 2007
    
    
    3,516
    
    
    $
    2.79
    
    
    
    1.8
    
    
    
    
 6




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
  Restricted Stock
   Weighted AverageNumber of
    
    Grant Date Fair(Amounts in thousands, except per share data)
    
    Shares
    
    Value per ShareBalance outstanding  January 1, 2007
    
    
    4,414
    
    
    $
    3.76Granted
    
    
    1,594
    
    
    $
    2.19Vested
    
    
    (1,599
    )
    
    $
    3.59Forfeited
    
    
    (545
    )
    
    $
    4.01Balance outstanding  June 30, 2007
    
    
    3,864
    
    
    $
    3.14Total grant date fair value of shares vesting
during the period
    
    $
    5,059
 Note 3  Acquisitions and Dispositions
 Acquisition of Talisman Expro Limited
  7




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
  (Amounts in thousands)Purchase price
    
    $
    359,594Legal, accounting and other direct expenses
    
    
    6,051Total purchase price
    
    $
    365,645Allocation of purchase price:Current assets
    
    $
    26,086Property and equipment
    
    
    209,534Goodwill
    
    
    263,957Current liabilities
    
    
    (23,940
    )Deferred tax liability
    
    
    (85,103
    )Other long-term liabilities
    
    
    (24,889
    )$
    365,645
   Three months
    
    Six months(Amounts in thousands, except per share data)
    
    ending
    
    endingJune 30, 2006Revenues
    
    $
    60,710
    
    
    $
    117,432Net income to common stockholders
    
    
    (10,375
    )
    
    
    (4,670
    )Net income per share  basic and diluted
    
    
    (0.09
    )
    
    
    (0.04
    )
 8




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 4  Debt Obligations
  June 30,
    
    December 31,(Amounts in thousands)
    
    2007
    
    2006Senior notes, 6% fixed rate, due 2012
    
    $
    81,250
    
    
    $
    81,250Senior bank facility, variable rate, due 2011
    
    
    117,000
    
    
    
    150,000Second lien term loan, variable rate, due 2011
    
    
    75,000
    
    
    
    75,000273,250
    
    
    
    306,250Less: current maturities
    
    
    (17,000
    )
    
    
    (2,410
    )Long-term debt
    
    $
    256,250
    
    
    $
    303,840Standby letters of credit outstanding for
abandonment liabilities
    
    $
    41,330
    
    
    $
    40,376
 Additional information concerning variable interest rates paid
  Range ofInterest Rates(Amounts in thousands, except per share data)
    
    PaidSenior bank facility
    
    6.62%  to 6.66%Second lien term loan
    
    12.36%  to 12.37%
   9




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 5  Property and Equipment
  (Amounts in thousands)
    
    June 30, 2007
    
    December 31, 2006Oil and gas properties under the full cost method:Subject to amortization
    
    $
    260,461
    
    
    $
    219,114Not subject to amortization:Acquired in 2007
    
    
    3,981
    
    
    
    Acquired in 2006
    
    
    115,089
    
    
    
    117,281Acquired in 2005
    
    
    15,108
    
    
    
    15,108Acquired in 2004
    
    
    15,001
    
    
    
    16,797409,640
    
    
    
    368,300Other oil and gas assets
    
    
    4,875
    
    
    
    4,875Computers, furniture and fixtures
    
    
    2,308
    
    
    
    1,940Total property and equipment
    
    
    416,823
    
    
    
    375,115Accumulated depreciation, depletion and amortization
    
    
    (88,477
    )
    
    
    (55,800
    )Net property and equipment
    
    $
    328,346
    
    
    $
    319,315
  Note 6  Derivative Instruments
  10




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
     11




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)


Remainder
    
    
    
    
    
    
    
    
    
    
    
    
    
    Estimated Fair Valueof
    
    
    
    
    
    
    
    
    
    
    
    
    
    Asset (Liability)2007
    
    2008
    
    2009
    
    Average 2010 - 2011
    
    (in thousands)Oil:Fixed Price Swap
(Mbbl)  Platts
Dated Brent
    
    
    555
    
    
    
    907
    
    
    
    697
    
    
    
    530
    
    
    $
    (10,852
    )Weighted Average
Price ($/Barrel)
    
    $
    69.07
    
    
    $
    68.87
    
    
    $
    69.08
    
    
    $
    67.30Gas:Fixed Price Swap
(MMcf)  Heren
National
Balancing Point
(1)
    
    
    1,287
    
    
    
    2,676
    
    
    
    1,387
    
    
    
    829
    
    
    $
    24,800Weighted Average
Price (£/Mcf)
    
    £
    5.53
    
    
    £
    5.81
    
    
    £
    5.58
    
    
    £
    5.28





|    |  |                                                                                                                                                                        
|--- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) |  | Gas derivative contracts are designated in therms and have been converted to Mcf at
a rate of 10 therm to 1 Mcf. The exchange rate at June 30, 2007 was $2.01 to £1.00.







12



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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 7  Supplemental Cash Flow Information
  (Amounts in thousands)
    
    Six months ended June 30,2007
    
    2006Interest paid
    
    $
    11,064
    
    
    $
    2,438Income taxes paid
    
    $
    2,050
    
    
    $
    3,119
 Note 8  Comprehensive Loss
  (Amounts in thousands)
    
    Three Months Ended June 30,
    
    Six Months Ended June 30,2007
    
    2006
    
    2007
    
    2006Net (loss)
    
    $
    (10,204
    )
    
    $
    (10,350
    )
    
    $
    (13,348
    )
    
    $
    (17,248
    )Unrealized loss on commodity derivative
instruments, net of tax
    
    
    
    
    
    
    (1,842
    )
    
    
    
    
    
    
    (2,810
    )Unrealized gain on interest rate swap
derivative instrument, net of tax of none
and none million, respectively
    
    
    381
    
    
    
    
    
    
    
    211
    
    
    
    Unrealized (loss) on marketable securities
    
    
    (29
    )
    
    
    (387
    )
    
    
    (65
    )
    
    
    (27
    )Reclassification adjustment for income
(loss) realized in net loss above
    
    
    (26
    )
    
    
    1,358
    
    
    
    (26
    )
    
    
    2,308Net impact on comprehensive income (loss)
    
    
    326
    
    
    
    (871
    )
    
    
    120
    
    
    
    (529
    )Comprehensive income (loss)
    
    $
    (9,878
    )
    
    $
    (11,221
    )
    
    $
    (13,228
    )
    
    $
    (17,777
    )
 13




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 9  Commitments and Contingencies
 Rig Commitments
   Note 10  Subsequent Events
  14




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Endeavour International Corporation
 Cautionary Statement for Forward-Looking Statements
  
 Item 2:
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
  General
  The Acquisition
  
    
    37.8 million shares of common stock in the fourth quarter of 2006 for $89 million in
gross proceeds;
 15




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Endeavour International Corporation
 
    
    125,000 shares of Series C Convertible Preferred Stock for $125 million in gross
proceeds;
    
    $150 million in a borrowing base debt facility, before financing costs paid of $3.2
million; and
    
    $75 million in a second lien term loan, before financing costs paid of $2.6 million.
 Results of Operations
  16
    Table of Contents   Endeavour International Corporation
 Three Months Ended
    
    Six Months EndedJune 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Production:Oil and condensate sales (Mbbl):United Kingdom
    
    
    224
    
    
    
    
    
    
    
    621
    
    
    
    Norway
    
    
    124
    
    
    
    129
    
    
    
    255
    
    
    
    273Total
    
    
    348
    
    
    
    129
    
    
    
    876
    
    
    
    273Gas sales (MMcf):United Kingdom
    
    
    2,091
    
    
    
    
    
    
    
    4,351
    
    
    
    Norway
    
    
    55
    
    
    
    38
    
    
    
    109
    
    
    
    92Total
    
    
    2,146
    
    
    
    38
    
    
    
    4,460
    
    
    
    92Total sales (MBOE):United Kingdom
    
    
    573
    
    
    
    
    
    
    
    1,346
    
    
    
    Norway
    
    
    133
    
    
    
    135
    
    
    
    273
    
    
    
    288Total
    
    
    706
    
    
    
    135
    
    
    
    1,619
    
    
    
    288Realized Prices:Oil and condensate price ($  per Bbl):Before commodity derivatives
    
    $
    65.34
    
    
    $
    69.32
    
    
    $
    58.23
    
    
    $
    65.42Effect of commodity derivatives
    
    $
    0.25
    
    
    $
    (12.26
    )
    
    $
    3.69
    
    
    $
    (9.84
    )Realized prices including commodity
derivatives
    
    $
    65.59
    
    
    $
    57.06
    
    
    $
    61.92
    
    
    $
    55.58Gas price ($  per Mcf):Before commodity derivatives
    
    $
    4.13
    
    
    $
    7.73
    
    
    $
    5.25
    
    
    $
    10.33Effect of commodity derivatives
    
    $
    1.80
    
    
    $
    
    
    
    $
    2.64
    
    
    $
    Realized prices including commodity
derivatives
    
    $
    5.93
    
    
    $
    7.73
    
    
    $
    7.89
    
    
    $
    10.33Equivalent oil price ($  per BOE):Before commodity derivatives
    
    $
    44.79
    
    
    $
    68.24
    
    
    $
    45.95
    
    
    $
    65.24Effect of commodity derivatives
    
    $
    5.59
    
    
    $
    (11.68
    )
    
    $
    9.27
    
    
    $
    (9.31
    )Realized prices including commodity
derivatives
    
    $
    50.38
    
    
    $
    56.56
    
    
    $
    55.22
    
    
    $
    55.93
  17




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Endeavour International Corporation
     Three Months Ended
    
    Six Months Ended(Amounts in thousands)
    
    June 30,
    
    June 30,2007
    
    2006
    
    2007
    
    2006Compensation
    
    $
    3,751
    
    
    $
    3,275
    
    
    $
    7,939
    
    
    $
    6,484Consulting, legal and accounting fees
    
    
    1,730
    
    
    
    818
    
    
    
    3,130
    
    
    
    1,929Occupancy costs
    
    
    445
    
    
    
    180
    
    
    
    725
    
    
    
    403Other expenses
    
    
    378
    
    
    
    508
    
    
    
    247
    
    
    
    1,029Total gross cash G&A expenses
    
    
    6,304
    
    
    
    4,781
    
    
    
    12,041
    
    
    
    9,845Non-cash stock-based compensation
    
    
    851
    
    
    
    2,899
    
    
    
    2,728
    
    
    
    6,038Gross G&A expenses
    
    
    7,155
    
    
    
    7,680
    
    
    
    14,769
    
    
    
    15,883Less: capitalized G&A expenses
    
    
    (1,995
    )
    
    
    (2,382
    )
    
    
    (4,242
    )
    
    
    (5,134
    )Net G&A expenses
    
    $
    5,160
    
    
    $
    5,298
    
    
    $
    10,527
    
    
    $
    10,749
 18




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##### Table of Contents



Endeavour International Corporation
  Income Taxes
  The(Amounts in thousands)
    
    UK
    
    
    Norway
    
    
    Netherlands
    
    
    U.S.
    
    
    TotalSix Months Ended June 30, 2007Net income (loss) before taxes
    
    $
    (18,083
    )
    
    $
    2,612
    
    
    $
    6,040
    
    
    $
    (4,499
    )
    
    $
    (13,930
    )Current tax expense (benefit)
    
    
    2,046
    
    
    
    (1,763
    )
    
    
    78
    
    
    
    (3
    )
    
    
    358Deferred tax expense (benefit)
    
    
    (9,969
    )
    
    
    3,856
    
    
    
    711
    
    
    
    
    
    
    
    (5,402
    )Foreign
currency (gains) losses on deferred tax liabilities
    
    
    3,065
    
    
    
    1,397
    
    
    
    
    
    
    
    
    
    
    
    4,462Total tax expense (benefit)
    
    
    (4,858
    )
    
    
    3,490
    
    
    
    789
    
    
    
    (3
    )
    
    
    (582
    )Net income (loss) after taxes
    
    $
    (13,225
    )
    
    $
    (878
    )
    
    $
    5,251
    
    
    $
    (4,496
    )
    
    $
    (13,348
    )Six Months Ended June 30, 2006Net income (loss) before taxes
    
    $
    (2,458
    )
    
    $
    3,685
    
    
    $
    (26
    )
    
    $
    (11,617
    )
    
    $
    (10,416
    )Current tax expense (benefit)
    
    
    
    
    
    
    3,432
    
    
    
    
    
    
    
    
    
    
    
    3,432Deferred tax expense (benefit)
    
    
    
    
    
    
    1,566
    
    
    
    
    
    
    
    (18
    )
    
    
    1,548Foreign currency (gains)
losses on deferred tax
liabilities
    
    
    
    
    
    
    1,852
    
    
    
    
    
    
    
    
    
    
    
    1,852Total tax expense (benefit)
    
    
    
    
    
    
    6,850
    
    
    
    
    
    
    
    (18
    )
    
    
    6,832Net income (loss) after taxes
    
    $
    (2,458
    )
    
    $
    (3,165
    )
    
    $
    (26
    )
    
    $
    (11,599
    )
    
    $
    (17,248
    )
   19




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##### Table of Contents



Endeavour International Corporation
   Liquidity and Capital Resources
     2007 Outlook
 20
    Table of Contents   Endeavour International Corporation
    Drilling Program
   21




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##### Table of Contents



Endeavour International Corporation
 
    
    completion of the development project at the Enoch field where initial production began
at the end of May;
    
    exploration drilling at the Acer prospect (5% working interest);
    
    exploration drilling at the Balgownie prospect (45% working interest);
    
    exploration drilling at the Emu prospect (well operator with a 25% working interest);
and
    
    ongoing work on the gas blowdown project at the Njord field to increase gas production
and the life of the field (2.5% working interest).
   
    
    the first appraisal well at last years Columbus discovery (25% working interest);
    
    exploration drilling on the NW Flank prospect (2.5% working interest);
    
    completion of the gas blowdown project at the Njord field; and
    
    development drilling at the Brage field (4.4% working interest).
 Rig Commitments
    Disclosures About Contractual Obligations and Commercial Commitments
  22




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##### Table of Contents



Endeavour International Corporation
 
 Item 3: Quantitative and Qualitative Disclosures about Market Risk
 Foreign Exchange Risk
  Commodity Price Risk
  Interest Rate Risk
   
 Item 4: Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   23




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##### Table of Contents



Endeavour International Corporation
   Changes in Internal Control over Financial Reporting
  
 Part II. Other Information
 
 Item 1A: Risk Factors
 Risk Factors
 
 Item 4: Submission of Matters to a Vote of Security Holders
    For
    
    
    WithheldElection as a Director of the Company of:Barry J. Galt
    
    
    145,615,544
    
    
    
    2,198,124Thomas D. Clark, Jr.
    
    
    145,619,169
    
    
    
    2,194,499
 
 *
    
    Charles Hue Williams was appointed a director in April 2007. Those directors
whose term of office continued were as follows: William L. Transier, John N. Seitz, Nancy
K. Quinn, and John B. Connally III.  24




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##### Table of Contents



Endeavour International Corporation
 For
    
    Against
    
    Abstained
    
    Broker Non-Votes102,348,935
    
    13,679,146
    
    172,518
    
    31,631,070
  For
    
    Against
    
    Abstained147,366,744
    
    433,635
    
    13,290
 
 Item 6: Exhibits
   3.1(a)
    
    Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.2 of
our Quarterly Report on Form 10-Q (Commission File No. 001-32212) for the quarter ended June
30, 2004.)3.1(b)
    
    Certificate of Amendment dated June 1, 2006 (Incorporated by reference to Exhibit 4.2 of our
Registration Statement on Form S-3 (Commission File No. 333-139304) filed on December 13,
2006.)3.2
    
    Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.4 to our Current Report
on Form 8-K (Commission File No. 001-32212) filed on November 6, 2006.)10.1 *
    
    Form of 2007 Incentive Plan Incentive Award Agreement.31.1 *
    
    Certification of William L. Transier, Chief Executive Officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2 *
    
    Certification of Robert L. Thompson, Chief Accounting Officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1 *
    
    Certification of William L. Transier, Chief Executive Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2 *
    
    Certification of Robert L. Thompson, Chief Accounting Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 25




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##### Table of Contents



Endeavour International Corporation
 
 Signatures
  Endeavour International CorporationDate: August 9, 2007
    /s/  Robert L. ThompsonRobert L. ThompsonVice President and Chief
Accounting Officer
(Principal Accounting Officer) 26




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##### Table of Contents



3.1(a)
    
    Amended and Restated Articles of Incorporation (Incorporated by reference to Exhibit 3.2 of
our Quarterly Report on Form 10-Q (Commission File No. 001-32212) for the quarter ended June
30, 2004.)3.1(b)
    
    Certificate of Amendment dated June 1, 2006 (Incorporated by reference to Exhibit 4.2 of our
Registration Statement on Form S-3 (Commission File No. 333-139304) filed on December 13,
2006.)3.2
    
    Amended and Restated Bylaws (Incorporated by reference to Exhibit 3.4 to our Current Report
on Form 8-K (Commission File No. 001-32212) filed on November 6, 2006.)10.1 *
    
    Form of 2007 Incentive Plan Incentive Award Agreement.31.1 *
    
    Certification of William L. Transier, Chief Executive Officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2 *
    
    Certification of Robert L. Thompson, Chief Accounting Officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.32.1 *
    
    Certification of William L. Transier, Chief Executive Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2 *
    
    Certification of Robert L. Thompson, Chief Accounting Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.