2008 FAIR MARKET VALUE STOCK PURCHASE PLAN

This Prospectus, as amended and restated, relates to shares of common stock, par value $.001 per share (the “ Common Stock ”), of Energy XXI (Bermuda) Limited, a Bermuda corporation (the “ Company ”), that may be purchased by employees, directors and other service providers of Energy XXI Services, LLC, a Delaware limited liability company and an indirect wholly-owned subsidiary of the Company (the “ Employer ”), or any of its affiliates, pursuant to the Energy XXI Services, LLC 2008 Fair Market Value Stock Purchase Plan (the “ Plan ”).  For all purposes of the Plan, this Prospectus constitutes the Plan document.

No person has been authorized to give any information or to make any representations other than those contained in this Prospectus, and, if given or made, such information or representations must not be relied upon as having been authorized.  This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy in any jurisdiction in which or to any person to whom it is unlawful to make such offer or solicitation.  Neither the delivery of this Prospectus nor any sale made hereunder will under any circumstances imply that information contained in this Prospectus is correct at any time subsequent to the date of this Prospectus.

The Company is an independent oil and natural gas exploration and production company whose growth strategy emphasizes acquisitions, enhanced by a value-added organic drilling program. The Company operates geographically focused producing reserves located in the U.S. Gulf of Mexico waters and the Gulf Coast onshore, and it targets the acquisition of oil and gas properties with which it can add value by increasing production and ultimate recovery of reserves, whether through exploitation or exploration, often using reprocessed seismic data to identify previously overlooked opportunities.  The Company believes the mature legacy fields on which its assets are located lend themselves well to its aggressive exploitation strategy and expects to identify incremental exploration opportunities on the properties. The Company intends to grow its reserve base and increase production through strategic acquisitions of oil and natural gas properties, its drilling program and the further optimization of production.  The Company actively manages price risk and hedges a high percentage of its proved developed producing reserves to enhance revenue certainty and predictability. The Company’s disciplined risk management strategy provides substantial price protection so that its cash flow is largely driven by production results rather than commodity prices. This greater price certainty allows the Company to efficiently allocate its capital resources and minimize its operating cost. The Company’s executive offices and operating headquarters are located at Canon’s Court, 22 Victoria Street, PO Box HM 1179, Hamilton HM EX, Bermuda, and its telephone number at those offices is (441) 298-3262.

General

The Plan is named the “Energy XXI Services, LLC 2008 Fair Market Value Stock Purchase Plan” and was originally adopted by the board of directors of the Employer and the Company effective as of July 1, 2008 (the “ Effective Date ”).

The purpose of the Plan is to promote the interests of the Employer and the Company, as well as employees, directors and other service providers by providing such individuals with the opportunity to conveniently purchase Common Stock.  The Plan allows eligible employees, directors, and other service providers to purchase from the Company shares of Common Stock that have been purchased by the Company on the open market or that have been newly issued by the Company. In particular, individuals who have been granted restricted stock units pursuant to the Company’s 2006 Long-Term Incentive Plan (the “ LTIP ”) that may be settled in cash may use their cash settlement to purchase shares of Common Stock which will be issued under the Plan.  See “— Securities To Be Offered.”

The Plan is not intended to qualify under the provisions of Section 423 of the Internal Revenue Code of 1986, as amended (the “ Code ”).  The Plan is also not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”).

Administration of the Plan

The board of directors of the Company (the “ Board ”) has appointed a Committee comprised of Board members   (the “ Committee ”) to administer the Plan pursuant to the Plan’s terms and all applicable state, federal, and other rules or laws, except in the event the Board chooses to administer the Plan.  Unless otherwise limited by the Plan or Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), the Committee has broad discretion to administer the Plan, interpret its provisions, and adopt policies for implementing the Plan.  This discretion includes the power to determine the class of “ Eligible Persons ” for the Plan, determine the terms under which Eligible Persons may purchase Common Stock under the Plan, prescribe and interpret the terms and provisions of any individual agreement between the Company and Eligible Persons which shall govern the purchase of Common Stock (the terms of which may vary), and to execute all other responsibilities permitted or required under the Plan.

Persons Who May Participate in the Plan

An Eligible Person shall be either: (a) a holder of a restricted stock unit granted pursuant to the LTIP and settleable in cash, or (b) any employee, director or consultant of the Employer or the Company or an affiliate thereof designated by the Committee as an Eligible Person.

An Eligible Person will be eligible to purchase Common Stock solely pursuant to the Plan terms, and will be subject to any limitations imposed by an appropriate action of the Committee.

Securities to be Offered

Shares Subject to the Plan .  The maximum aggregate number of shares of Common Stock that may be purchased pursuant to the Plan will not exceed 1,200,000 shares.  The Common Stock sold pursuant to the Plan may be newly issued shares, shares held by the Company in treasury, shares which have been acquired by the Company in the open market, or any combination of the foregoing.  There are no fees, commissions or other charges applicable to a purchase of Common Stock under the Plan.

Purchase of Common Stock

With Respect to Restricted Stock Units.   An Eligible Person who desires to purchase Common Stock with cash received upon the settlement of restricted stock units granted pursuant to the LTIP may do so by notifying the Company on or prior to the date of vesting of the restricted stock units pursuant to reasonable procedures established by the Company.

The Company shall use all or a portion of the cash payable to the Eligible Person upon settlement of the restricted stock units (the “ Purchase