##### Table of Contents



United States
Securities and Exchange Commission
 Washington, D.C. 20549
 Form 10-Q
 (Mark One)
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended September 30, 2010
 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: 1-32212
 Endeavour International Corporation
  Nevada
    
    88-0448389(State or other jurisdiction of incorporation or
    
    (I.R.S. Employer Identification No.)organization)
 1001 Fannin Street, Suite 1600, Houston, Texas 77002
 (713) 307-8700
  þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer   o(Do not check if a smaller reporting company)
    
    Smaller Reporting Company o
 o þ




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##### 



Index
 Part I: Financial InformationItem 1: Financial StatementsCondensed Consolidated Balance Sheets
    
    
    1Condensed Consolidated Statements of Operations
    
    
    3Condensed Consolidated Statements of Cash Flows
    
    
    4Notes to Condensed Consolidated Financial Statements
    
    
    5Item 2: Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    24Item 3: Quantitative and Qualitative Disclosures About Market Risk
    
    
    40Item 4: Controls and Procedures
    
    
    40Part II. Other InformationItem 1A: Risk Factors
    
    
    41Item 6: Exhibits
    
    
    41Signatures
    
    
    43EX-2.1EX-10.2EX-10.3EX-10.4.AEX-10.4.BEX-10.4.CEX-31.1EX-31.2EX-32.1EX-32.2
  Quantities of natural gas are expressed in this report in terms of thousand cubic feet (Mcf)
and million cubic feet (MMcf). Oil is quantified in terms of barrels (Bbls) and thousands of
barrels (Mbbls). Natural gas is compared to oil in terms of barrels of oil equivalent (BOE),
thousand barrels of oil equivalent (MBOE) or million barrels of oil equivalent (MMBOE). One barrel
of oil is the energy equivalent of six Mcf of natural gas. With respect to information relating to
our working interest in wells or acreage, net oil and natural gas wells or acreage is determined
by multiplying gross wells or acreage by our working interest therein. References to number of
potential well locations are gross, unless otherwise indicated.
 References to GAAP refer to U.S. generally accepted accounting principles.




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##### Table of Contents



Part I: Financial Information
 
 Item 1:
    
    Financial Statements
 Endeavour International Corporation
 
 Condensed Consolidated Balance Sheets
   September 30,
    
    December 31,2010
    
    2009AssetsCurrent Assets:Cash and cash equivalents
    
    $
    16,527
    
    
    $
    27,287Restricted cash
    
    
    32,524
    
    
    
    2,879Accounts receivable
    
    
    9,812
    
    
    
    14,800Prepaid expenses and other current assets
    
    
    9,558
    
    
    
    10,118Total Current Assets
    
    
    68,421
    
    
    
    55,084Property and Equipment, Net ($178,142 and $154,553 not subject
to amortization at 2010 and 2009, respectively)
    
    
    334,749
    
    
    
    266,587Assets Held for Sale
    
    
    21,145
    
    
    
    Goodwill
    
    
    211,886
    
    
    
    211,886Other Assets
    
    
    26,423
    
    
    
    5,322Total Assets
    
    $
    662,624
    
    
    $
    538,879
  1




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Endeavour International Corporation
Condensed Consolidated Balance Sheets
 September 30,
    
    December 31,2010
    
    2009Liabilities and Stockholders EquityCurrent Liabilities:Accounts payable
    
    $
    30,476
    
    
    $
    12,401Current maturities of debt
    
    
    16,500
    
    
    
    Accrued expenses and other
    
    
    16,850
    
    
    
    17,798Total Current Liabilities
    
    
    63,826
    
    
    
    30,199Long-Term Debt
    
    
    314,708
    
    
    
    223,385Deferred Taxes
    
    
    86,887
    
    
    
    80,692Other Liabilities
    
    
    72,722
    
    
    
    85,412Total Liabilities
    
    
    538,143
    
    
    
    419,688Commitments and ContingenciesSeries C Convertible Preferred Stock:Face value (liquidation preference)
    
    
    45,000
    
    
    
    50,000Net non-cash premiums under fair value accounting on redemption
    
    
    8,152
    
    
    
    9,058Total Series C Convertible Preferred Stock
    
    
    53,152
    
    
    
    59,058Stockholders Equity:Series B preferred stock  Liquidation preference: $3,233Common stock; shares issued and outstanding  173,238
and 131,618 shares at 2010 and 2009, respectively
    
    
    173
    
    
    
    132Additional paid-in capital
    
    
    286,819
    
    
    
    247,707Treasury stock, at cost - 498 and 498 shares at 2010
and 2009, respectively
    
    
    (587
    )
    
    
    (587
    )Accumulated deficit
    
    
    (215,076
    )
    
    
    (187,119
    )Total Stockholders Equity
    
    
    71,329
    
    
    
    60,133Total Liabilities and Stockholders Equity
    
    $
    662,624
    
    
    $
    538,879
  2




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Endeavour International Corporation
 
 Condensed Consolidated Statement of Operations
   Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009Revenues
    
    $
    19,849
    
    
    $
    7,759
    
    
    $
    55,102
    
    
    $
    42,179Cost of Operations:Operating expenses
    
    
    4,595
    
    
    
    3,876
    
    
    
    10,881
    
    
    
    14,455Depreciation, depletion and amortization
    
    
    7,697
    
    
    
    5,646
    
    
    
    21,290
    
    
    
    24,828Impairment of oil and gas properties
    
    
    
    
    
    
    
    
    
    
    7,692
    
    
    
    30,645General and administrative
    
    
    4,237
    
    
    
    4,091
    
    
    
    12,873
    
    
    
    12,041Total Expenses
    
    
    16,529
    
    
    
    13,613
    
    
    
    52,736
    
    
    
    81,969Income (Loss) From Operations
    
    
    3,320
    
    
    
    (5,854
    )
    
    
    2,366
    
    
    
    (39,790
    )Other Income (Expense):Derivatives:Realized gains (losses)
    
    
    (452
    )
    
    
    7,530
    
    
    
    (1,552
    )
    
    
    28,581Realized loss on early termination
    
    
    (10,201
    )
    
    
    
    
    
    
    (10,201
    )
    
    
    Unrealized gains (losses)
    
    
    6,441
    
    
    
    (4,360
    )
    
    
    11,477
    
    
    
    (38,455
    )Interest expense
    
    
    (10,474
    )
    
    
    (3,919
    )
    
    
    (21,733
    )
    
    
    (12,054
    )Interest income and other
    
    
    (2,327
    )
    
    
    1,402
    
    
    
    1,281
    
    
    
    (6,932
    )Total Other Income (Expense)
    
    
    (17,013
    )
    
    
    653
    
    
    
    (20,728
    )
    
    
    (28,860
    )Loss Before Income Taxes
    
    
    (13,693
    )
    
    
    (5,201
    )
    
    
    (18,362
    )
    
    
    (68,650
    )Income Tax Expense (Benefit)
    
    
    (2,001
    )
    
    
    (441
    )
    
    
    7,916
    
    
    
    (10,477
    )Loss from Continuing Operations
    
    
    (11,692
    )
    
    
    (4,760
    )
    
    
    (26,278
    )
    
    
    (58,173
    )Income from Discontinued Operations
    
    
    
    
    
    
    277
    
    
    
    
    
    
    
    46,646Net Loss
    
    
    (11,692
    )
    
    
    (4,483
    )
    
    
    (26,278
    )
    
    
    (11,527
    )Preferred Stock Dividends
    
    
    546
    
    
    
    2,696
    
    
    
    1,682
    
    
    
    8,061Net Loss to Common Stockholders
    
    $
    (12,238
    )
    
    $
    (7,179
    )
    
    $
    (27,960
    )
    
    $
    (19,588
    )Basic and Diluted Net Loss per Common Share:Continuing operations
    
    $
    (0.07
    )
    
    $
    (0.06
    )
    
    $
    (0.17
    )
    
    $
    (0.51
    )Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.36Total
    
    $
    (0.07
    )
    
    $
    (0.06
    )
    
    $
    (0.17
    )
    
    $
    (0.15
    )Weighted Average Number of Common Shares Outstanding:Basic and Diluted
    
    
    167,641
    
    
    
    130,109
    
    
    
    159,801
    
    
    
    129,719
  3




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Endeavour International Corporation
 
 Condensed Consolidated Statement of Cash Flows
   Nine Months Ended September 30,2010
    
    2009Cash Flows from Operating Activities:Net loss
    
    $
    (26,278
    )
    
    $
    (11,527
    )Adjustments to reconcile net loss to net cash
provided by operating activities:Depreciation, depletion and amortization
    
    
    21,290
    
    
    
    29,509Impairment of oil and gas properties
    
    
    7,692
    
    
    
    30,645Deferred tax expense (benefit)
    
    
    6,195
    
    
    
    (3,269
    )Unrealized (gains) losses on derivatives
    
    
    (11,477
    )
    
    
    38,455Gain on sale of Norwegian operations
    
    
    
    
    
    
    (47,420
    )Amortization of non-cash compensation
    
    
    2,786
    
    
    
    2,232Amortization of loan costs and discount
    
    
    6,980
    
    
    
    3,682Non-cash interest expense
    
    
    5,179
    
    
    
    3,949Other
    
    
    (1,178
    )
    
    
    3,714Changes in operating assets and liabilities:Decrease in receivables
    
    
    4,988
    
    
    
    6,593(Increase) decrease in other current assets
    
    
    (2,340
    )
    
    
    5,060Increase (decrease) in liabilities
    
    
    17,465
    
    
    
    (21,939
    )Net Cash Provided by Operating Activities
    
    
    31,302
    
    
    
    39,684Cash Flows From Investing Activities:Capital expenditures
    
    
    (75,677
    )
    
    
    (88,639
    )Acquisitions
    
    
    (39,279
    )
    
    
    (4,127
    )Proceeds from sales, net of cash
    
    
    
    
    
    
    144,765(Increase) decrease in restricted cash
    
    
    (29,645
    )
    
    
    20,366Net Cash Provided by (Used in) Investing Activities
    
    
    (144,601
    )
    
    
    72,365Cash Flows From Financing Activities:Repayments of borrowings
    
    
    (74,942
    )
    
    
    (64,458
    )Borrowings under debt agreements
    
    
    175,000
    
    
    
    Proceeds from issuance of common stock
    
    
    30,181
    
    
    
    Dividends paid
    
    
    (1,563
    )
    
    
    (7,969
    )Financing costs paid
    
    
    (26,219
    )
    
    
    Other financing
    
    
    82
    
    
    
    27Net Cash Provided by (Used in) Financing Activities
    
    
    102,539
    
    
    
    (72,400
    )Net Increase (Decrease) in Cash and Cash Equivalents
    
    
    (10,760
    )
    
    
    39,649Cash and Cash Equivalents, Beginning of Period
    
    
    27,287
    
    
    
    38,156Cash and Cash Equivalents, End of Period
    
    $
    16,527
    
    
    $
    77,805
  4




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Endeavour International Corporation
 
 Notes to Condensed Consolidated Financial Statements
 (Unaudited)
  Note 1  General
  Basis of Presentation and Use of Estimates
   
    
    proved oil and gas reserves,
 
    
    expected future cash flow from proved oil and gas properties,
 
    
    future dismantlement and restoration costs,
 
    
    fair values used in purchase accounting, and
 
    
    fair value of derivative instruments.
 New Accounting Developments
  
    
    Subsequent Events Amended standards of accounting for and disclosure of events that
occur after the balance sheet date but before the financial statements are issued.
 5




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 
    
    Fair Value New, expanded disclosures are required for recurring or nonrecurring
fair-value measurements and the reconciliation of specific fair value measurements.
 Note 2  Discontinued Operations
   Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009Sales
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    17,550Income before Taxes
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    4,656Income Tax Expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,430
    )Loss from Operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (774
    )Gain on sale
    
    
    
    
    
    
    277
    
    
    
    
    
    
    
    47,420Net Income from
Discontinued Operations
    
    $
    
    
    
    $
    277
    
    
    $
    
    
    
    $
    46,646
 6




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 3  Income Tax Expense (Benefit)
  UK
    
    U.S.
    
    Other
    
    TotalNine Months Ended September 30, 2010:Net income (loss) before taxes from continuing
operations
    
    $
    6,249
    
    
    $
    (22,214
    )
    
    $
    (2,397
    )
    
    $
    (18,362
    )Current tax expense (benefit)
    
    
    1,892
    
    
    
    
    
    
    
    (171
    )
    
    
    1,721Deferred tax expense (benefit)
    
    
    7,174
    
    
    
    
    
    
    
    (928
    )
    
    
    6,246Foreign currency gains on deferred tax liabilities
    
    
    
    
    
    
    
    
    
    
    (51
    )
    
    
    (51
    )Income tax expense (benefit)
    
    
    9,066
    
    
    
    
    
    
    
    (1,150
    )
    
    
    7,916Net loss from continuing operations
    
    $
    (2,817
    )
    
    $
    (22,214
    )
    
    $
    (1,247
    )
    
    $
    (26,278
    )Nine Months Ended September 30, 2009:Net loss before taxes from continuing
operations
    
    $
    (44,641
    )
    
    $
    (16,149
    )
    
    $
    (7,860
    )
    
    $
    (68,650
    )Current tax benefit
    
    
    (1,176
    )
    
    
    
    
    
    
    
    
    
    
    (1,176
    )Deferred tax benefit
    
    
    (16,203
    )
    
    
    
    
    
    
    
    
    
    
    (16,203
    )Foreign currency losses on deferred tax liabilities
    
    
    6,902
    
    
    
    
    
    
    
    
    
    
    
    6,902Income tax expense (benefit)
    
    
    (10,477
    )
    
    
    
    
    
    
    
    
    
    
    (10,477
    )Net loss from continuing operations
    
    $
    (34,164
    )
    
    $
    (16,149
    )
    
    $
    (7,860
    )
    
    $
    (58,173
    )
   7




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 4  Property and Equipment
  September 30,
    
    December 31,2010
    
    2009Oil and gas properties under the full cost method:Subject to amortization
    
    $
    336,876
    
    
    $
    275,278Not subject to amortization:Acquired in 2010
    
    
    61,981
    
    
    
    Acquired in 2009
    
    
    29,553
    
    
    
    51,797Acquired in 2008
    
    
    25,162
    
    
    
    32,970Acquired prior to 2008
    
    
    61,446
    
    
    
    69,786515,018
    
    
    
    429,831Computers, furniture and fixtures
    
    
    3,964
    
    
    
    3,560Total property and equipment
    
    
    518,982
    
    
    
    433,391Accumulated depreciation, depletion and amortization
    
    
    (184,233
    )
    
    
    (166,804
    )Net property and equipment
    
    $
    334,749
    
    
    $
    266,587
  Impairments
  8




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
  Acquisitions
    Pending Disposition
  9




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 5  Debt Obligations
  September 30,
    
    December 31,2010
    
    2009Senior notes, 6% fixed rate, due 2012
    
    $
    81,250
    
    
    $
    81,250Senior bank facility, variable rate, due 2011
    
    
    
    
    
    
    49,942Convertible bonds, 11.5%, due 2014
    
    
    54,261
    
    
    
    49,838Subordinated notes, 12.0%, due 2014
    
    
    50,878
    
    
    
    50,122Senior term loan, 15.0%, due 2013
    
    
    150,000
    
    
    
    336,389
    
    
    
    231,152Less: debt discount
    
    
    (5,181
    )
    
    
    (7,767
    )Less: current maturities
    
    
    (16,500
    )
    
    
    Long-term debt
    
    $
    314,708
    
    
    $
    223,385Standby letters of credit outstanding for abandonment liabilities
    
    $
    32,474
    
    
    $
    33,388
   Junior Facility
  Senior Bank Facility
  10




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Senior Term Loan
      
    
    Endeavours 6% Convertible Senior Notes due 2012 have been refinanced or extended and
 
    
    the holders conditional redemption right on Endeavours 11.5% Guaranteed Convertible
Senior Bonds due 2014 has been terminated or extended. Such conditional redemption right
exists if our average common stock price, as defined, is below $2.36 per share on January
18, 2012.
  11




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
    
    
    a specified maximum total leverage ratio (consolidated net indebtedness to consolidated
EBITDAX), ranging from 7.85:1.00 at September 30, 2010 to 3.00:1.00 at December 31, 2012
and thereafter;
 
    
    a specified minimum EBITDAX for each four-quarter period, ranging from $45,000,000 for
the four-quarter period ending September 30, 2010 to $200,000,000 for the four-quarter
period ending June 30, 2013;
 
    
    a minimum Reserve Coverage Ratio, as defined, of not less than 3.00:1.00; and
 
    
    a PDP Coverage Ratio, as defined, of not less than 0.25:1.00 on or prior to September
30, 2011 and not less than 0.50:1.00 after September 30, 2011.
   Note 6  Asset Retirement Obligations
  12




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Nine Months EndedSeptember 30,2010
    
    2009Carrying amount of asset retirement obligations as of beginning of
period
    
    $
    47,362
    
    
    $
    38,776Accretion expense (included in DD&A expense)
    
    
    3,444
    
    
    
    3,082Impact of foreign currency exchange rate changes
    
    
    (1,379
    )
    
    
    3,782Payment of asset retirement obligation
    
    
    (3,012
    )
    
    
    (6,620
    )Reduction in asset retirement obligation
    
    
    (1,812
    )
    
    
    Sale of assets
    
    
    
    
    
    
    (248
    )Carrying amount of asset retirement obligations as of end of period
    
    
    44,603
    
    
    
    38,772Less: Current portion
    
    
    (2,588
    )
    
    
    Long-term asset retirement obligation
    
    $
    42,015
    
    
    $
    38,772
 Note 7  Equity Transactions
 Series C Convertible Preferred Stock
   Common Stock Issuance
  13




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
  Note 8  Loss Per Share
    September 30,2010
    
    2009Warrants, options and stock-based compensation
    
    
    703
    
    
    
    699Convertible debt:Senior notes
    
    
    16,185
    
    
    
    16,185Convertible bonds
    
    
    22,992
    
    
    
    20,528Convertible preferred stock
    
    
    36,000
    
    
    
    50,00075,880
    
    
    
    87,412
 Note 9  Fair Value Measurements
  14




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
  Level 1:
    
    Fair value is based on actively-quoted market prices, if available.
 Level 2:
    
    In the absence of actively-quoted market prices, we seek price information from external sources, including broker
quotes and industry publications. Substantially all of these inputs are observable in the marketplace during the
entire term of the instrument, can be derived from observable data, or supported by observable levels at which
transactions are executed in the marketplace.
 Level 3:
    
    If valuations require inputs that are both significant to the fair value measurement and less observable from
objective sources, we must estimate prices based on available historical and near-term future price information and
certain statistical methods that reflect our market assumptions.
  Quoted Market Prices
    
    Significant Other
    
    Significantin Active Markets -
    
    Observable Inputs -
    
    Unobservable Inputs
    
    TotalLevel 1
    
    Level 2
    
    Level - 3
    
    Fair ValueSeptember 30, 2010:Oil and gas derivative contracts:Oil and gas swaps
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Embedded derivatives
    
    
    
    
    
    
    
    
    
    
    (30,181
    )
    
    
    (30,181
    )Total derivative liabilities
    
    $
    
    
    
    $
    
    
    
    $
    (30,181
    )
    
    $
    (30,181
    )December 31, 2009:Oil and gas derivative contracts:Oil and gas swaps
    
    $
    
    
    
    $
    (12,816
    )
    
    $
    
    
    
    $
    (12,816
    )Embedded derivatives
    
    
    
    
    
    
    
    
    
    
    (28,843
    )
    
    
    (28,843
    )Total derivative liabilities
    
    $
    
    
    
    $
    (12,816
    )
    
    $
    (28,843
    )
    
    $
    (41,659
    )
  15




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
   Nine Months EndedSeptember 30,2010
    
    2009Balance at beginning of period
    
    $
    (28,843
    )
    
    $
    (12,057
    )Total gains or losses (realized/unrealized)Included in earnings
    
    
    (1,338
    )
    
    
    (9,541
    )Balance at end of period
    
    $
    (30,181
    )
    
    $
    (21,598
    )Changes in unrealized gains (losses) relating to derivatives assets and liabilities
    
    $
    (1,338
    )
    
    $
    (6,663
    )
 Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
  Goodwill 
 Note 10  Derivative Instruments
  16




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
   September 30,
    
    December 31,2010
    
    2009Derivatives not designated as hedges:Oil and gas commodity derivatives:Assets:Prepaid expenses and other current assets
    
    $
    
    
    
    $
    2,890Other assets  long term
    
    
    
    
    
    
    318Liabilities:Accrued expenses and other
    
    
    
    
    
    
    (6,817
    )Other liabilities  long-term
    
    
    
    
    
    
    (9,207
    )$
    
    
    
    $
    (12,816
    )Embedded derivatives related to debt and equity instruments:Liabilities:Other liabilities  long-term
    
    
    (30,181
    )
    
    
    (28,843
    )
  17




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009Derivatives not designated as hedges:Oil and gas commodity derivativesRealized gains (losses)
    
    $
    (452
    )
    
    $
    7,530
    
    
    $
    (1,552
    )
    
    $
    28,581Realized loss on early termination
    
    
    (10,201
    )
    
    
    
    
    
    
    (10,201
    )
    
    
    Unrealized gains (losses)
    
    
    8,057
    
    
    
    (2,950
    )
    
    
    12,815
    
    
    
    (29,645
    )(2,596
    )
    
    
    4,580
    
    
    
    1,062
    
    
    
    (1,064
    )Embedded derivatives related to debt
and equity instrumentsUnrealized gains (losses)
    
    $
    (1,616
    )
    
    $
    (1,410
    )
    
    $
    (1,338
    )
    
    $
    8,810
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,Location ofReclassificationinto Income
    
    2010
    
    2009
    
    2010
    
    2009Interest rate swapGain recognized in other comprehensive
income, net of tax
    
    
    
    
    
    $
    
    
    
    $
    (21
    )
    
    $
    
    
    
    $
    (94
    )Gain reclassified from accumulated
other comprehensive income
    
    Interestinto income
    
    expense
    
    
    
    
    
    
    418
    
    
    
    
    
    
    
    1,176
   18




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 11  Supplemental Cash Flow Information
  Nine Months EndedSeptember 30,2010
    
    2009Interest paid
    
    $
    10,313
    
    
    $
    6,191Income taxes paid (refunded)
    
    $
    (172
    )
    
    $
    4,334
    Note 12  Comprehensive Income (Loss)
  19




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009Net loss
    
    $
    (11,692
    )
    
    $
    (4,483
    )
    
    $
    (26,278
    )
    
    $
    (11,527
    )Unrealized gain on interest rate swap
derivative instrument, net of tax
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    (94
    )Reclassification adjustment for gain
realized in net loss above
    
    
    
    
    
    
    418
    
    
    
    
    
    
    
    1,176Net impact on comprehensive income (loss)
    
    
    
    
    
    
    397
    
    
    
    
    
    
    
    1,082Comprehensive loss
    
    $
    (11,692
    )
    
    $
    (4,086
    )
    
    $
    (26,278
    )
    
    $
    (10,445
    )
 Note 13  Stock-Based Compensation Arrangements
  Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009G & A Expenses
    
    $
    656
    
    
    $
    506
    
    
    $
    2,474
    
    
    $
    1,436Capitalized G & A
    
    
    211
    
    
    
    159
    
    
    
    711
    
    
    
    556Total non-cash
stock-based
compensation
    
    $
    867
    
    
    $
    665
    
    
    $
    3,185
    
    
    $
    1,992
  20




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Stock Options
  Weighted
    
    WeightedNumber of
    
    Average
    
    AverageShares
    
    Exercise
    
    Contractual
    
    AggregateUnderlying
    
    Price per
    
    Life in
    
    IntrinsicOptions
    
    Share
    
    Years
    
    ValueBalance outstanding January 1, 2010
    
    
    4,212
    
    
    $
    1.87Exercised
    
    
    (147
    )
    
    
    0.56Forfeited
    
    
    (44
    )
    
    
    1.98Expired
    
    
    (643
    )
    
    
    4.14Balance outstanding   September
30, 2010
    
    
    3,378
    
    
    $
    1.49
    
    
    
    6.6
    
    
    $
    849Currently exercisable  September
30, 2010
    
    
    2,305
    
    
    $
    1.82
    
    
    
    6.0
    
    
    $
    311
 Restricted Stock
  WeightedAverage GrantDate FairNumber of
    
    Value perShares
    
    ShareBalance outstanding  January 1, 2010
    
    
    3,420
    
    
    $
    1.00Granted
    
    
    5,074
    
    
    
    1.12Vested
    
    
    (2,424
    )
    
    
    1.15Forfeited
    
    
    (59
    )
    
    
    0.87Balance outstanding  September 30, 2010
    
    
    6,011
    
    
    $
    1.04Total grant date fair value of shares vesting during the period
    
    $
    2,791
 21




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Note 14  Commitments and Contingencies
  Note 15  Subsequent Events
    22




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Endeavour International Corporation
Notes to Condensed Consolidated Financial Statements
(Unaudited)
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009As reported:Basic and Diluted Net Loss per Common Share:Continuing operations
    
    $
    (0.07
    )
    
    $
    (0.06
    )
    
    $
    (0.17
    )
    
    $
    (0.51
    )Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.36Total
    
    $
    (0.07
    )
    
    $
    (0.06
    )
    
    $
    (0.17
    )
    
    $
    (0.15
    )Weighted Average Number of Common Shares
Outstanding:Basic and Diluted
    
    
    167,641
    
    
    
    130,109
    
    
    
    159,801
    
    
    
    129,719Pro forma:Basic and Diluted Net per Common Share:Continuing operations
    
    $
    (0.51
    )
    
    $
    (0.39
    )
    
    $
    (1.22
    )
    
    $
    (3.58
    )Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2.52Total
    
    $
    (0.51
    )
    
    $
    (0.39
    )
    
    $
    (1.22
    )
    
    $
    (1.06
    )Weighted Average Number of Common Shares
Outstanding:Basic and Diluted
    
    
    23,949
    
    
    
    18,587
    
    
    
    22,829
    
    
    
    18,531
 23




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Endeavour International Corporation
 
 Item 2: Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
  
    
    In October 2010, we completed the previously-announced sale of our North Sea Cygnus
asset for $110 million in cash. With this sale, we have concluded the review of strategic
alternatives for our North Sea assets.
    
    On August 16, 2010 we entered into the Senior Term Loan with Cyan and various lenders
and under which we borrowed $150 million. We used a portion of the loan proceeds to repay
all of our outstanding borrowings under the Senior Bank Facility and the Junior Facility.
Subsequent to the third quarter of 2010, we borrowed an additional $10 million under the
Senior Term Loan. These borrowings will be used for general corporate purposes.
    
    Concurrent with the Senior Term Loan, we sold 9.0 million shares of our common stock to
Cyan for gross cash consideration of $10.1 million. See Note 7 for additional discussion.
    
    During the second quarter of 2010, we completed a farm-out with Nexen Petroleum U.K.
Limited to test the West Rochelle prospect that lies west of our Rochelle gas development
area. Under the terms of the farm-out agreement, we are carried for our share of the
drilling costs for the initial West Rochelle well, remain operator of the block and retain
a 50 percent interest in the block. This West Rochelle well began drilling in September
2010 and natural gas with an oil rim was encountered in early October 2010. The well has
been sidetracked to the north and has encountered hydrocarbons that extend the West
Rochelle area.
    
    In February 2010, we sold 23.5 million shares of common stock in a private placement for
aggregate net proceeds of $20.5 million. We also entered into a $25 million junior lending
facility, with a maturity date of February 5, 2011. The net proceeds from the private
placement and the Junior Facility have been used to partially fund our 2010 capital budget.
 24




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##### Table of Contents



Endeavour International Corporation
 
 
    
    In January 2010, we acquired 50 percent of Cohorts interests in certain acreage in
North Louisiana/East Texas and Western Pennsylvania, primarily in the Haynesville and
Marcellus gas shale plays, for $15 million in cash (the 2010 Cohort Acquisition). As
part of this acquisition, we also acquired additional acreage in the Marcellus gas shale
play area for approximately $7.5 million during the second quarter of 2010.
    
    In January 2010, we also acquired 50 percent of Hillwoods position in Hillwoods
exploratory gas shale play in Alabama with an initial net investment of approximately $8.0
million (the Hillwood Acquisition). During the third quarter of 2010, we drilled two
vertical pilot wells in this area which will be evaluated for future horizontal re-entries
and completion tests.
    
    In the fourth quarter of 2009, we entered into a participation agreement with Cohort
providing us with acreage positions and production in the Haynesville and Marcellus gas
shales for $15 million in cash.
    
    In the fourth quarter of 2009, we acquired 50 percent of the interests owned by a
private company in more than 300,000 gross (75,000 net) acres in central Montana in the
highly prospective, but previously untested Heath Shale oil play with an initial net cash
investment of $3.75 million.
    
    In the fourth quarter of 2009, we redeemed 60 percent of the outstanding shares of our
Series C Preferred Stock, for face value of $75 million, and amended the terms of the
remaining shares of Series C Preferred Stock. The redemption price consisted of a $25
million cash payment and the issuance of $50 million Subordinated Notes.
    
    In the second quarter of 2009, we sold our Norwegian operations for cash consideration
of $150 million, providing us with financial flexibility and strength to continue our U.K.
development program and accelerate our expanding U.S. initiative.
  Results of Operations
  25




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Endeavour International Corporation
       26




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Endeavour International Corporation
 Revenue and Sales Volume
    27




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##### Table of Contents



Endeavour International Corporation
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009Sales volume (1)Oil and condensate sales (Mbbls):United Kingdom
    
    
    127
    
    
    
    82
    
    
    
    429
    
    
    
    494United States
    
    
    2
    
    
    
    1
    
    
    
    5
    
    
    
    2Continuing operations
    
    
    129
    
    
    
    83
    
    
    
    434
    
    
    
    496Discontinued operations  Norway
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    310Total
    
    
    129
    
    
    
    83
    
    
    
    434
    
    
    
    806Gas sales (MMcf):United Kingdom
    
    
    869
    
    
    
    629
    
    
    
    2,614
    
    
    
    2,777United States
    
    
    978
    
    
    
    19
    
    
    
    1,699
    
    
    
    130Continuing operations
    
    
    1,847
    
    
    
    648
    
    
    
    4,313
    
    
    
    2,907Discontinued operations  Norway
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    686Total
    
    
    1,847
    
    
    
    648
    
    
    
    4,313
    
    
    
    3,593Oil equivalent sales (MBOE)United Kingdom
    
    
    272
    
    
    
    187
    
    
    
    864
    
    
    
    957United States
    
    
    165
    
    
    
    4
    
    
    
    288
    
    
    
    23Continuing operations
    
    
    437
    
    
    
    191
    
    
    
    1,152
    
    
    
    980Discontinued operations  Norway
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    425Total
    
    
    437
    
    
    
    191
    
    
    
    1,152
    
    
    
    1,405Total BOE per day
    
    
    4,755
    
    
    
    2,072
    
    
    
    4,222
    
    
    
    5,147Physical production volume (BOE per day) (2):United Kingdom
    
    
    2,993
    
    
    
    2,777
    
    
    
    3,130
    
    
    
    3,675United States
    
    
    1,995
    
    
    
    32
    
    
    
    1,117
    
    
    
    54Continuing operations
    
    
    4,988
    
    
    
    2,809
    
    
    
    4,247
    
    
    
    3,729Discontinued operations  Norway
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,545Total
    
    
    4,988
    
    
    
    2,809
    
    
    
    4,247
    
    
    
    5,274Realized Prices (3)Oil and condensate price ($  per Bbl):Before commodity derivatives
    
    $
    75.64
    
    
    $
    61.73
    
    
    $
    74.72
    
    
    $
    47.38Effect of commodity derivatives
    
    
    (3.11
    )
    
    
    46.05
    
    
    
    (7.12
    )
    
    
    24.47Realized prices including commodity derivatives
    
    $
    72.53
    
    
    $
    107.78
    
    
    $
    67.60
    
    
    $
    71.85Gas price ($  per Mcf):Before commodity derivatives
    
    $
    5.44
    
    
    $
    4.10
    
    
    $
    5.26
    
    
    $
    5.99Effect of commodity derivatives
    
    
    (0.03
    )
    
    
    5.75
    
    
    
    0.36
    
    
    
    2.46Realized prices including commodity derivatives
    
    $
    5.41
    
    
    $
    9.85
    
    
    $
    5.62
    
    
    $
    8.45Equivalent oil price ($  per BOE):Before commodity derivatives
    
    $
    45.37
    
    
    $
    40.70
    
    
    $
    47.81
    
    
    $
    42.51Effect of commodity derivatives
    
    
    (1.03
    )
    
    
    39.50
    
    
    
    (1.35
    )
    
    
    20.34Realized prices including commodity derivatives
    
    $
    44.34
    
    
    $
    80.20
    
    
    $
    46.46
    
    
    $
    62.85
 28




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Endeavour International Corporation
 
 (1)
    
    We record oil revenues using the sales method, i.e. when delivery has
occurred. We use the entitlements method to account for sales of gas production.(2)
    
    Physical production may differ from sales volumes based on the timing
of tanker liftings for our international oil sales.(3)
    
    The average sales prices reflect both our continuing and discontinued
operations and include gains and losses for derivative contracts we utilize to manage price
risk related to our future cash flows.      29




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Endeavour International Corporation
  Expenses
     30




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Endeavour International Corporation
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009Compensation
    
    $
    4,209
    
    
    $
    3,659
    
    
    $
    12,618
    
    
    $
    10,448Consulting, legal and accounting fees
    
    
    1,357
    
    
    
    1,537
    
    
    
    4,433
    
    
    
    3,529Occupancy costs
    
    
    315
    
    
    
    221
    
    
    
    837
    
    
    
    717Other expenses
    
    
    694
    
    
    
    85
    
    
    
    1,948
    
    
    
    1,062Total gross cash G&A expenses
    
    
    6,575
    
    
    
    5,502
    
    
    
    19,836
    
    
    
    15,756Non-cash stock-based compensation
    
    
    789
    
    
    
    567
    
    
    
    2,786
    
    
    
    1,680Gross G&A expenses
    
    
    7,364
    
    
    
    6,069
    
    
    
    22,622
    
    
    
    17,436Less: capitalized G & A expenses
    
    
    (3,127
    )
    
    
    (1,978
    )
    
    
    (9,749
    )
    
    
    (5,395
    )Net G&A expenses
    
    $
    4,237
    
    
    $
    4,091
    
    
    $
    12,873
    
    
    $
    12,041
  
    
    In the fourth quarter of 2009, we issued $50 million of Subordinated Notes in connection
with the redemption and modification of our Series C Preferred Stock.
    
    In the first quarter of 2010, we borrowed $25 million under the Junior Facility.
    
    In August 2010, we borrowed $150 million under the Senior Term Loan and repaid all
outstanding balances under the Senior Bank Facility and Junior Facility.
    
    In connection with the repayment of the Senior Bank and Junior Facilities, we expensed
the remaining deferred financing costs of $1.2 million related to these instruments.
 Income Taxes
  31




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##### Table of Contents



Endeavour International Corporation
 UK
    
    U.S.
    
    Other
    
    TotalNine Months Ended September 30, 2010:Net income (loss) before taxes from continuing
operations
    
    $
    6,249
    
    
    $
    (22,214
    )
    
    $
    (2,397
    )
    
    $
    (18,362
    )Current tax expense (benefit)
    
    
    1,892
    
    
    
    
    
    
    
    (171
    )
    
    
    1,721Deferred tax expense (benefit)
    
    
    7,174
    
    
    
    
    
    
    
    (928
    )
    
    
    6,246Foreign currency gains on deferred tax liabilities
    
    
    
    
    
    
    
    
    
    
    (51
    )
    
    
    (51
    )Income tax expense (benefit)
    
    
    9,066
    
    
    
    
    
    
    
    (1,150
    )
    
    
    7,916Net loss from continuing operations
    
    $
    (2,817
    )
    
    $
    (22,214
    )
    
    $
    (1,247
    )
    
    $
    (26,278
    )Nine Months Ended September 30, 2009:Net loss before taxes from continuing
operations
    
    $
    (44,641
    )
    
    $
    (16,149
    )
    
    $
    (7,860
    )
    
    $
    (68,650
    )Current tax benefit
    
    
    (1,176
    )
    
    
    
    
    
    
    
    
    
    
    (1,176
    )Deferred tax benefit
    
    
    (16,203
    )
    
    
    
    
    
    
    
    
    
    
    (16,203
    )Foreign currency losses on deferred tax liabilities
    
    
    6,902
    
    
    
    
    
    
    
    
    
    
    
    6,902Income tax expense (benefit)
    
    
    (10,477
    )
    
    
    
    
    
    
    
    
    
    
    (10,477
    )Net loss from continuing operations
    
    $
    (34,164
    )
    
    $
    (16,149
    )
    
    $
    (7,860
    )
    
    $
    (58,173
    )
   Reconciliation of Non-GAAP Measures
  32




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Endeavour International Corporation
   33




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##### Table of Contents



Endeavour International Corporation
 Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2010
    
    2009
    
    2010
    
    2009Net loss
    
    $
    (11,692
    )
    
    $
    (4,483
    )
    
    $
    (26,278
    )
    
    $
    (11,527
    )Depreciation, depletion and amortization
    
    
    7,697
    
    
    
    5,646
    
    
    
    21,290
    
    
    
    29,509Impairment of oil and gas properties
    
    
    
    
    
    
    
    
    
    
    7,692
    
    
    
    30,645Deferred tax expense (benefit)
    
    
    (2,249
    )
    
    
    327
    
    
    
    6,195
    
    
    
    (3,269
    )Gain on asset sales
    
    
    
    
    
    
    (277
    )
    
    
    
    
    
    
    (47,420
    )Unrealized (gain) loss on derivatives
    
    
    (6,441
    )
    
    
    4,360
    
    
    
    (11,477
    )
    
    
    38,455Realized loss on early termination of derivatives
    
    
    10,201
    
    
    
    
    
    
    
    10,201
    
    
    
    Other
    
    
    8,613
    
    
    
    2,042
    
    
    
    3,566
    
    
    
    13,577Discretionary Cash Flow (1)
    
    $
    6,129
    
    
    $
    7,615
    
    
    $
    11,189
    
    
    $
    49,970Net loss to common shareholders
    
    $
    (12,238
    )
    
    $
    (7,179
    )
    
    $
    (27,960
    )
    
    $
    (19,588
    )Impairment of oil and gas properties (net of
tax) (2)
    
    
    
    
    
    
    
    
    
    
    7,692
    
    
    
    15,988Unrealized (gain) loss on derivatives (net of
tax) (3)
    
    
    (2,413
    )
    
    
    2,885
    
    
    
    (5,070
    )
    
    
    23,632Currency impact on deferred taxes
    
    
    95
    
    
    
    (2,106
    )
    
    
    (51
    )
    
    
    8,143Net Income (Loss) as Adjusted
    
    $
    (14,556
    )
    
    $
    (6,400
    )
    
    $
    (25,389
    )
    
    $
    28,175Net loss
    
    $
    (11,692
    )
    
    $
    (4,483
    )
    
    $
    (26,278
    )
    
    $
    (11,527
    )Unrealized (gain) loss on derivatives
    
    
    (6,441
    )
    
    
    4,360
    
    
    
    (11,477
    )
    
    
    38,455Realized loss on early termination of derivatives
    
    
    10,201
    
    
    
    
    
    
    
    10,201
    
    
    
    Net interest expense
    
    
    10,467
    
    
    
    3,877
    
    
    
    21,704
    
    
    
    11,860Depreciation, depletion and amortization
    
    
    7,697
    
    
    
    5,646
    
    
    
    21,290
    
    
    
    29,509Impairment of oil and gas properties
    
    
    
    
    
    
    
    
    
    
    7,692
    
    
    
    30,645Income tax expense (benefit)
    
    
    (2,001
    )
    
    
    (441
    )
    
    
    7,916
    
    
    
    (5,047
    )Gain on asset sales
    
    
    
    
    
    
    (277
    )
    
    
    
    
    
    
    (47,420
    )Adjusted EBITDA
    
    $
    8,231
    
    
    $
    8,682
    
    
    $
    31,048
    
    
    $
    46,475
 
 (1)
    
    Discretionary cash flow is equal to cash flow from operating activities
before the changes in operating assets and liabilities, excluding the early termination of
commodity derivatives.(2)
    
    Net of tax benefits of $(14,657) for the nine months ended September 30, 2009.(3)
    
    Net of tax (benefits) expense of $(4,029), $1,475, $(6,408) and $14,823, respectively. 34




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##### Table of Contents



Endeavour International Corporation
 Liquidity and Capital Resources
  Nine Months Ended September 30,2010
    
    2009Net cash provided by operating activities
    
    $
    31,302
    
    
    $
    39,684Net cash provided by (used in) investing activities
    
    $
    (144,601
    )
    
    $
    72,365Net cash provided by (used in) financing activities
    
    $
    102,539
    
    
    $
    (72,400
    )
     35




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##### Table of Contents



Endeavour International Corporation
     Capital Program
  United Kingdom Activity
    36




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##### Table of Contents



Endeavour International Corporation
   th
  United States Drilling
   United States Acquisitions and Participation Agreements
  37




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##### Table of Contents



Endeavour International Corporation
     Outlook
    38




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##### Table of Contents



Endeavour International Corporation
 Disclosures About Contractual Obligations and Commercial Commitments
  Cautionary Statement for Forward-Looking Statements
  
    
    our future financial position;
    
    our business strategy;
    
    budgets;
    
    projected costs, savings and plans;
    
    objectives of management for future operations;
    
    legal strategies; and
    
    legal proceedings.
  
    
    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;
 39




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##### Table of Contents



Endeavour International Corporation
 
    
    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;
    
    business strategy and the availability of acquisition opportunities; and
    
    factors not known to us at this time.
 
 Item 3: Quantitative and Qualitative Disclosures about Market Risk
 Commodity Price Risk
   
 Item 4: Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   40




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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 6: Exhibits
  2.1 *
    
    Agreement for the Sale and Purchase of the Cygnus Asset dated August 27, 2010.3.1(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).3.1(c)
    
    Certificate of Amendment dated June 1, 2010 (Incorporated by reference to Exhibit 3.1 to our
Current Report on Form 8-K (Commission File No. 001-32212) filed on June 3, 2010).
 41




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##### Table of Contents



Endeavour International Corporation
 3.2(a)
    
    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).3.2(b)
    
    Amendment to Amended and Restated Bylaws dated December 12, 2007 (Incorporated by reference
to Exhibit 3.1 to our Current Report on Form 8-K (Commission File No. 001-32212) filed on
December 13, 2007).10.1
    
    Common Stock Purchase Agreement, dated August 16, 2010, by and between Endeavour
International Corporation and the purchasers named therein (Incorporated by reference to
Exhibit 10.1 to our Current Report on Form 8-K (Commission File No. 001-32212) filed on August
20, 2010).10.2 *
    
    Form of Restricted Stock Agreement under the 2010 Incentive Plan.10.3 *
    
    Form of Stock Option Agreement under the 2010 Incentive Plan.10.4(a) *
    
    Credit Agreement among Endeavour International Corporation, Endeavour Energy UK Limited,
various lenders and Cyan Partners, LP dated August 16, 2010.10.4(b)*
    
    Incremental Term Loan Commitment and Amendment Agreement among Endeavour International
Corporation, Endeavour Energy UK Limited, various lenders and Cyan Partners, LP dated October
21, 2010.10.4(c) *
    
    Incremental Fee Letter among Endeavour International Corporation, Endeavour Energy UK
Limited, various lenders and Cyan Partners, LP, as supplement to the Incremental Term Loan
Commitment and Amendment Agreement, dated October 21, 2010.31.1 *
    
    Certification of William L. Transier, Chief Executive Officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2 *
    
    Certification of J. Michael Kirksey, Chief Financial 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 J. Michael Kirksey, Chief Financial Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 42




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##### Table of Contents



Endeavour International Corporation
 
 Signatures
  Endeavour International Corporation
 Date: November 5, 2010
    
    /s/ J. Michael Kirksey
    
    /s/ Robert L. ThompsonJ. Michael Kirksey
    
    Robert L. ThompsonExecutive Vice President and
    
    Senior Vice President andChief Financial Officer
    
    Chief Accounting Officer(Principal Financial Officer)
    
    (Principal Accounting Officer)
 
 43




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##### Table of Contents



EXHIBIT INDEX
  2.1 *
    
    Agreement for the Sale and Purchase of the Cygnus Asset dated August 27, 2010.3.1(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).3.1(c)
    
    Certificate of Amendment dated June 1, 2010 (Incorporated by reference to Exhibit 3.1 to our
Current Report on Form 8-K (Commission File No. 001-32212) filed on June 3, 2010).3.2(a)
    
    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).3.2(b)
    
    Amendment to Amended and Restated Bylaws dated December 12, 2007 (Incorporated by reference
to Exhibit 3.1 to our Current Report on Form 8-K (Commission File No. 001-32212) filed on
December 13, 2007).10.1
    
    Common Stock Purchase Agreement, dated August 16, 2010, by and between Endeavour
International Corporation and the purchasers named therein (Incorporated by reference to
Exhibit 10.1 to our Current Report on Form 8-K (Commission File No. 001-32212) filed on August
20, 2010).10.2 *
    
    Form of Restricted Stock Agreement under the 2010 Incentive Plan.10.3 *
    
    Form of Stock Option Agreement under the 2010 Incentive Plan.10.4(a) *
    
    Credit Agreement among Endeavour International Corporation, Endeavour Energy UK Limited,
various lenders and Cyan Partners, LP dated August 16, 2010.10.4(b)*
    
    Incremental Term Loan Commitment and Amendment Agreement among Endeavour International
Corporation, Endeavour Energy UK Limited, various lenders and Cyan Partners, LP dated October
21, 2010.10.4(c) *
    
    Incremental Fee Letter among Endeavour International Corporation, Endeavour Energy UK
Limited, various lenders and Cyan Partners, LP, as supplement to the Incremental Term Loan
Commitment and Amendment Agreement, dated October 21, 2010.31.1 *
    
    Certification of William L. Transier, Chief Executive Officer, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.31.2 *
    
    Certification of J. Michael Kirksey, Chief Financial 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 J. Michael Kirksey, Chief Financial Officer, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.