e424b2

The information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement and the accompanying prospectus are part of an effective registration statement filed with the Securities and Exchange Commission. This preliminary prospectus supplement and the accompanying prospectus are not an offer to sell nor do they seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Filed Pursuant to Rule 424(b)(2)

Registration No. 333-163781

SUBJECT TO COMPLETION, DATED MARCH 15, 2011

PRELIMINARY PROSPECTUS SUPPLEMENT

(To prospectus dated February 9, 2010)

8,000,000 Shares

Common Stock

$ per share

We are offering 8,000,000 shares of our common stock. The underwriters may also purchase up to an additional 1,200,000 shares from us, at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus supplement to cover over-allotments, if any.

Our common stock is quoted on the New York Stock Exchange under the symbol “END” and on the London Stock Exchange under the symbol “ENDV.” On March 14, 2011, the last sales price of the shares as reported on the NYSE Amex, where our common stock was quoted prior to March 15, 2011, was $12.60 per share.

Investing in our common stock involves risks. See “Risk Factors” beginning on page S-18 of this prospectus supplement.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.


	Per Share	Total

Public Offering Price	$	$
Underwriting Discount	$	$
Proceeds, Before Expenses, to Us	$	$

The underwriters expect to deliver the shares to purchasers on or about March , 2011.

Book-Running Manager

Citi

Co-Managers

Canaccord Genuity

C. K. Cooper & Company

Global Hunter Securities

Rodman & Renshaw, LLC

March , 2011

ABOUT THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS

This document is organized in two parts. The first part is the prospectus supplement, which describes our business and the specific terms of this offering of our common stock. The second part is the accompanying prospectus, which gives more general information, some of which may not apply to our common stock or this offering. If the information relating to the offering varies between the prospectus supplement and the accompanying prospectus, you should rely on the information in this prospectus supplement.

You should rely only on the information contained in or incorporated by reference into this prospectus supplement, the accompanying prospectus and any related free writing prospectus. Neither we nor the underwriters have authorized any dealer, salesman or other person to provide you with additional or different information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus supplement and the accompanying prospectus are not an offer to sell or the solicitation of an offer to buy any securities other than the securities to which they relate and are not an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make an offer or solicitation in that jurisdiction. You should not assume that the information contained in this prospectus supplement is accurate as of any date other than the date on the front cover of this prospectus supplement, or that the information contained in any document incorporated by reference is accurate as of any date other than the date of the document incorporated by reference, regardless of the time of delivery of this prospectus supplement or any sale of a security.

Unless otherwise indicated or the context otherwise requires, all references in this prospectus supplement to “we,” “our,” “us,” “the Company” or “Endeavour” are to Endeavour International Corporation and its subsidiaries.

WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports and other information with the Securities and Exchange Commission (the “SEC”) (File No. 001-32212) pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”). You may read and copy any documents that are filed at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of these documents at prescribed rates from the public reference section of the SEC at its Washington address. Please call the SEC at 1-800-SEC-0330 for further information.

Our filings are also available to the public through the SEC’s website at http://www.sec.gov.

The SEC allows us to “incorporate by reference” information that we file with them, which means that we can disclose important information to you by referring you to documents previously filed with the SEC. The information incorporated by reference is an important part of this prospectus supplement, and the information that we later file with the SEC will automatically update and supersede this information. The following documents we filed with the SEC pursuant to the Exchange Act are incorporated herein by reference:


	•	our Annual Report on Form 10-K for the year ended December 31, 2010;

	•	our Current Reports on Form 8-K filed on February 9, 2011 and March 14, 2011 (excluding any information furnished pursuant to Item 2.02 or Item 7.01 of any such Current Report on Form 8-K); and

	•	the description of our common stock contained in our registration statement on Form 8-A filed on March 14, 2011, including any other amendments or reports filed for the purpose of updating such description.

These reports contain important information about us, our financial condition and our results of operations.

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All future documents filed pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (excluding any information furnished pursuant to Item 2.02 or Item 7.01 on any Current Report on Form 8-K) before the termination of the offering of securities under this prospectus supplement shall be deemed to be incorporated in this prospectus supplement by reference and to be a part hereof from the date of filing of such documents. Any statement contained herein, or in a document incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this prospectus supplement to the extent that a statement contained herein or in any subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus supplement.

You may request a copy of these filings at no cost by writing or telephoning us at the following address and telephone number:

Endeavour International Corporation
1001 Fannin Street, Suite 1600
Houston, Texas 77002
(713) 307-8700
Attention: Corporate Secretary

We also maintain a website at http://www.endeavourcorp.com. However, the information on, or accessible through, our website is not part of this prospectus supplement.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain matters discussed or incorporated by reference in this prospectus supplement are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 (the “Securities Act”) and Section 21E of the Exchange Act. These forward-looking statements include statements that express a belief, expectation, or intention, as well as those that are not statements of historical fact, and may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. Our forward-looking statements are generally accompanied by words such as “estimate,” “project,” “predict,” “believe,” “expect,” “anticipate,” “potential,” “plan,” “goal” or other words that convey the uncertainty of future events or outcomes. We caution you not to rely on them unduly. In particular, this prospectus supplement contains or incorporates by reference forward-looking statements pertaining to the following:


	•	our future financial position;

	•	our business strategy;

	•	budgets;

	•	projected costs, savings and plans;

	•	objectives of management for future operations;

	•	legal strategies; and

	•	legal proceedings.

We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties, which may not be exhaustive, relate to, among other matters, the following:


	•	discovery, estimation, development and replacement of oil and gas reserves;

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	•	decreases in proved reserves due to technical or economic factors;

	•	drilling of wells and other planned exploitation activities;

	•	timing and amount of future production of oil and gas;

	•	the volatility of oil and gas prices;

	•	availability and terms of capital;

	•	operating costs such as lease operating expenses, administrative costs and other expenses;

	•	our future operating or financial results;

	•	amount, nature and timing of capital expenditures, including future development costs;

	•	cash flow and anticipated liquidity;

	•	availability of drilling and production equipment;

	•	uncertainties related to drilling and production operations in a new region;

	•	cost and access to natural gas gathering, treatment and pipeline facilities;

	•	business strategy and the availability of acquisition opportunities; and

	•	factors not known to us at this time.

Any of these factors, or any combination of these factors, could materially affect our future financial condition or results of operations and the ultimate accuracy of a forward-looking statement. The forward-looking statements are not guarantees of our future performance, and our actual results and future developments may differ materially from those projected in the forward-looking statements. In addition, any or all of our forward-looking statements included or incorporated by reference in this prospectus supplement may turn out to be incorrect. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties, including those mentioned in “Risk Factors” beginning on page S-18 of this prospectus supplement and in our Annual Report on Form 10-K for the year ended December 31, 2010. These forward-looking statements speak only as of the date of this prospectus supplement, or, if earlier, as of the date they were made. Except as required by law, we undertake no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus supplement. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

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SUMMARY

This summary highlights selected information contained elsewhere in this prospectus supplement, the accompanying prospectus and the documents we incorporate by reference. It does not contain all of the information you should consider before making an investment decision. You should read the entire prospectus supplement, the accompanying prospectus, the documents incorporated by reference and the other documents to which we refer for a more complete understanding of our business and this offering. Please read the section entitled “Risk Factors” commencing on page S-18 of this prospectus supplement and additional information contained in our Annual Report on Form 10-K for the year ended December 31, 2010 incorporated by reference in this prospectus supplement for more information about important factors you should consider before investing in our common stock in this offering.

Our reserve estimates as of December 31, 2010 and 2009 are based on evaluations prepared by our internal reserve engineers, which have been audited by Netherland, Sewell & Associates, Inc. Our reserve estimates as of December 31, 2008 were prepared by Netherland, Sewell & Associates, Inc.

We have provided definitions for some of the oil and gas industry terms used in this prospectus supplement in the Glossary beginning on page G-1.

Our Company

We are an independent oil and gas company engaged in the production, exploration, development and acquisition of crude oil and natural gas in the U.S. and the North Sea. Our strategy is to expand and exploit our balanced portfolio of exploration and development assets using conventional and unconventional technologies in basins that have historically generated and produced substantial quantities of oil and gas and that we believe will yield commercial quantities of reserves through improved drilling and completion technologies. Finding, developing and producing oil and gas reserves in the North Sea require both significant capital and time. Recognizing this, we have sought to balance our North Sea assets, which have large potential reserves but long production-cycles, with a portfolio of assets in the U.S. that have lower costs and shorter production-cycles. We also seek to achieve a balance of oil and gas reserves in our portfolio of assets, believing that both commodities present attractive opportunities for capital returns in the future.

Our North Sea activities and assets remain a key source of value that we are actively developing to increase our overall reserves and production. Our major development projects in the U.K. sector of the North Sea — Bacchus, Greater Rochelle, and Columbus — have the potential to significantly expand our total proved reserves and production levels. These projects are in various stages of development, with Bacchus currently expected to commence oil production in the second half of 2011. Additionally, we expect that production from our two-phase development of the Greater Rochelle area will commence with first production from East Rochelle in the second half of 2012 and from West Rochelle shortly thereafter. Finally, Columbus could commence production as early as 2012. We intend to continue to actively manage our North Sea assets in a manner that maximizes value and enables us to allocate resources to effectively pursue our growth strategy.

Currently, our primary focus in the U.S. is unconventional gas shale developments targeting reserve and production growth in the Haynesville area, including the East Texas Cotton Valley gas sands, and the Marcellus area. In the Haynesville area, we have approximately 7,500 net acres with acreage located in Red River, DeSoto, Bienville and Caddo Parishes in Louisiana and in Harrison and Gregg Counties in Texas. Our Marcellus acreage is comprised of approximately 18,600 net acres in Pennsylvania located between two of the most active parts of the Marcellus play. We also have exploratory plans in emerging gas and oil plays in Alabama and Montana where early well results will determine the pace and scope of our subsequent exploration and development initiatives.

In 2011, we intend to expand upon our foundation of producing assets and undeveloped acreage in both established and emerging U.S. onshore resource plays, including the development of our leasehold positions in the Haynesville and Marcellus areas, while continuing to develop our existing assets in the North Sea. Specifically, during 2011 we intend to focus on achieving initial production from the Bacchus oil field in the North Sea.

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As of December 31, 2010, our estimated proved reserves were 18.4 MMBOE, up 1.1% from 18.2 MMBOE as of December 31, 2009, of which approximately 70% were located in the U.K. and approximately 30% were located in the U.S., and 19.4% of which were proved developed reserves. Our 1.7 MMBOE of net reserve additions before production in 2010 replaced 111% of our production during the year. We also achieved average sales volume of 4,115 BOE/d for the year ended December 31, 2010, a 9.5% increase from 2009, implying a reserve life index of approximately 12.2 years based on our reserves as of December 31, 2010.

Operations

Our operations are organized into two main geographic regions as follow: the North Sea and the U.S. The following tables set forth information related to our principal operating areas as of the dates and for the periods indicated.

North Sea


									Year Ended
	As of December 31, 2010								December 31, 2010
	Estimated Proved Reserves					Average			Average Daily
	Total					Working			Production		Anticipated First
Operating Area	(MMBOE)		% Oil			Interest(1)			(BOE/d)		Production

Bacchus		0.2		95	%		10	%(1)		—		2nd half 2011
Greater Rochelle		9.4		17	%		53	%		—		2nd half 2012	(2)
Columbus		1.8		20	%		25	%		—		2012
Other fields		1.6		96	%		26	%		2,895		N/A

Total		13.0		28	%		28	%		2,895


(1)		In February 2011, we increased our working interest to 30%. Please read “— Recent Developments — Bacchus Acquisition.”

(2)		We expect that first production from the East Rochelle field will occur in the second half of 2012, and first production from the West Rochelle field is expected shortly thereafter.

U.S.


	As of December 31, 2010												Year Ended December 31, 2010
	Estimated Proved Reserves												Average Daily
	Total					% Proved			Acreage				Production
Operating Area	(MMBOE)		% Oil			Developed			Gross		Net		(BOE/d)

Haynesville		5.0		1	%		41	%		18,000		7,500		1,142
Marcellus		0.3		—			48	%		39,400		18,600		50
Other		0.1		16	%		100	%		529,800		144,500		28

Total		5.4		1	%		42	%		587,300		170,600		1,220

In the Haynesville and Marcellus areas, we had an average working interest in our properties of 41% and 47%, respectively, as of December 31, 2010. In addition to these two primary operating areas, we hold additional interests in emerging plays in Alabama and Montana. Please read “— Our Areas of Operation — U.S. — Alabama” and “— Central Montana.”

Our Business Strategy

We pursue a strategy of exploiting a balanced portfolio of exploration and development assets that has evolved over the last several years. When we commenced operations in 2004, our focus was exclusively in the North Sea. By 2009, we had built a portfolio of production and development assets in the U.K. and Norway sectors of the North Sea. In May 2009, we sold our assets and operations in the Norwegian sector of the

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North Sea for $150 million, and we used the proceeds from that sale to complete acquisitions of U.S. onshore interests, providing us with acreage positions and production in the Haynesville and Marcellus areas and our two emerging plays in Alabama and Montana. We believe the resource-rich plays in the U.S., with lower costs and shorter production-cycles, help provide a stable platform upon which to execute our strategy. We intend to continue developing our existing assets in the North Sea, while simultaneously pursuing the development of our domestic positions in the Haynesville and Marcellus areas and our positions in the emerging Alabama and Montana plays.

We believe this strategy will best enable us to provide an attractive return on capital for our stockholders. Several of the key elements of our business strategy include:


	•	Efficiently Develop and Commence Production from our North Sea Development Assets. We currently have three large development projects in the North Sea — the Bacchus, Greater Rochelle and Columbus fields — which have the potential to significantly increase our current production levels over the next several years. We intend to efficiently manage our interests in each of these prospects in order to commence production in a timely and cost-effective manner. We expect to achieve first production from the Bacchus field in the second half of 2011. We expect that production from our two-phase development of the Greater Rochelle area will commence with first production from East Rochelle in the second half of 2012 and from West Rochelle shortly thereafter. Finally, Columbus is expected to commence production as early as 2012.

	•	Develop and Exploit Existing Acreage in Resource-Rich Plays. We have established a mix of U.S. producing assets and undeveloped acreage in both established and emerging resource plays, including the Haynesville and Marcellus areas and our emerging plays in Alabama and Montana. We have the ability to adjust our domestic drilling activities in accordance with current and future commodity prices and our operating results.

	•	Maintain a Balanced Portfolio of Production, Development and Exploration Assets. We intend to actively manage our assets in a manner that maximizes value and enables us to allocate resources to effectively pursue our balanced growth strategy. Recognizing this, we have established a portfolio that balances assets that are characterized by shorter production-cycles with assets that have larger potential reserves with longer production-cycles.

	•	Exploit Potential Growth Opportunities in our Emerging Domestic Plays. We have approximately 73,000 and 61,000 net acres, respectively, in exploratory plays in central Montana and western Alabama, which give us exposure to emerging oil and natural gas shale plays, respectively. We believe that the relatively modest capital investment required to drill pilot wells in each of these two areas helps to mitigate the inherent risk in attempting to develop assets in emerging plays. We may seek to explore these emerging plays following a review of the projected return on capital from these plays based on early well results.

	•	Reduce Leverage and Simplify our Capital Structure. To fund our growth over the last several years, we relied primarily on financing structures available to small and developing companies, some of which were considered relatively complicated. These financial instruments include several series of convertible notes and our senior term loan. We are currently exploring our options to replace these instruments with more traditional financing arrangements. In addition, we expect that our application of the net proceeds of this offering will reduce our debt as a percentage of total capitalization from 63% as of December 31, 2010 to % on a pro forma basis as of December 31, 2010. We plan to continue strengthening our balance sheet and lowering our overall cost of capital, which we believe will give us access to a wider variety of more favorable financing options on a long-term basis.

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Our Competitive Strengths

We believe the following competitive strengths will help us achieve our business strategy:


	•	Significant North Sea Development Assets and Attractive Positions in Resource-Rich Shale Plays. We believe that successful development of our three primary development assets in the North Sea could have the potential to significantly increase our production levels over the next several years. Moreover, our assets in the U.S. cover a broad spectrum of resource plays, from established areas, such as Haynesville and Marcellus, to emerging plays, in Alabama and Montana. This combination should allow us to balance the capital intensive, long lead-time nature of our North Sea assets with the shorter development times and lower capital requirements of our U.S. properties.

	•	Balanced Producing and Development and Exploration Assets. We have taken important steps to balance our asset portfolio in several dimensions: U.S. versus U.K. properties; oil versus natural gas; and short-term versus long-term realizations. We have constructed our asset portfolio in this manner in an attempt to mitigate the risks of over-emphasizing any one of these variables. Specifically, we believe that the resource-rich plays in the U.S., with less capital-intensive and shorter production-cycles relative to our North Sea development projects, will provide a stable platform for the successful execution of our strategy by helping to provide cash flows from operations as we develop our longer-term, more capital-intensive North Sea development projects.

	•	Improving Exposure to Liquids. With the expected first production from our Bacchus asset in the second half of 2011, we expect that our liquids production will increase significantly. In addition, our current portfolio of assets includes other liquids-rich opportunities in the North Sea as well as upside development acreage in the Heath oil shale play in Montana. These assets and prospects should provide us with both near- and long-term liquids exposure.

	•	Experienced and Skilled Management Team with Proven Track Records. We were co-founded in 2004 by William L. Transier, our President and Chief Executive Officer, and John N. Seitz, one of our directors. Our management team has extensive technical expertise and industry experience across the full cycle of development of oil and gas assets and operations. The members of our management team, including our senior geoscience and engineering professionals, average more than 27 years of experience in the oil and gas industry. Under this management team, we have executed several significant transactions, including the sale of our Norwegian subsidiary, the sale of our Cygnus reserves in the North Sea, our recent Bacchus acquisition and several acquisitions of U.S. onshore properties. Substantially all of the members of the team have previously worked for a major oil company or a large independent producer.


	•	Our President and Chief Executive Officer, William L. Transier, was the former Chief Financial Officer of Ocean Energy, which merged with Devon Energy in 2003, and has over 35 years of experience in the oil and gas industry.

	•	Our Chief Financial Officer, J. Michael Kirksey, has an extensive background in both operational and financial management in the energy industry, having served in various executive roles for Metals USA, Input Output, Inc. and Keystone International, Inc.

	•	Carl D. Grenz, our Executive Vice President — International, has 36 years of experience in the oil and gas industry, having spent a majority of his career working for BHP Billiton and Hamilton Oil, focused in the North Sea.

	•	Our Executive Vice President — North America, James J. Emme, has 30 years of experience in the oil and gas industry, with an extensive background in unconventional hydrocarbon exploration and development while working for Anadarko Petroleum Corporation and Source Exploration, LLC.

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Our Areas of Operation

North Sea

The North Sea is a proven resource area where we have several significant development projects, producing properties and additional exploration licenses. Although production costs are higher than conventional developments in the U.S., the quality of the oil, the political stability of the region, and the proximity of important markets with strong demand in Western Europe has made the North Sea an important oil and natural gas producing region. We believe our assets in the U.K. sector of the North Sea possess significant value that can continue to be realized in a manner that will provide us with an attractive return on invested capital.

Our development assets in the Bacchus, Greater Rochelle, and Columbus fields comprise the primary components of our U.K. North Sea portfolio, and we currently have development plans under way in each of these fields. When these projects are fully producing, they have the potential to significantly increase our current production levels over the next several years. We also have producing properties — the Alba, Bittern, Enoch and Goldeneye fields — and certain other fields where we have suspended production. We anticipate re-developing production from our suspended fields, if commercially attractive and practicable, once additional production commences from the nearby East Rochelle field.

We believe that constraints on available capital and consolidation have reduced the number of companies operating in the North Sea, which in turn has reduced competition and given us an increased ability to pursue opportunities consistent with our balanced strategy.

Primary Development Fields

Bacchus. At December 31, 2010, we held a 10% working interest in our Bacchus field asset, which is operated by Apache Corporation, who owns a 50% working interest. On February 23, 2011, we closed on our previously-announced acquisition of an additional 20% working interest in the Bacchus field, bringing our total interest to 30%. Please read “— Recent Developments — Bacchus Acquisition.” As of December 31, 2010, our 0.2 MMBOE of estimated proved reserves in the Bacchus area were 95% oil.

The development of the Bacchus field was sanctioned in the second quarter of 2010 by the Department of Energy and Climate Change (“DECC”). The discovery well was drilled in 2005, followed by a down-dip sidetrack appraisal well that tested the upper part of the reservoir. The field development plan (“FDP”) for the Bacchus field calls for a subsea development with three wells to be drilled and linked to production facilities at the nearby Forties field. The 6.5 kilometer subsea bundled pipeline launched from Wick on the east coast of Scotland in early March 2011, and first production is expected to commence in the second half of 2011. We believe that the Bacchus field may produce up to 4,000 to 5,000 BOE/d when fully on production.

Greater Rochelle. The Greater Rochelle area is comprised of three blocks in the North Sea, including our interests in blocks 15/27 and 15/26c. We refer to these blocks as our East Rochelle field and our West Rochelle field, respectively. In the East Rochelle field in block 15/27, we hold a 55.6% working interest and are the operator, while our partner Nexen Petroleum U.K. Limited (“Nexen”) holds the remaining working interest. In the West Rochelle field in block 15/26c, we hold a 50% working interest and are the operator. Nexen and Premier Oil plc (“Premier”) have each farmed into block 15/26c for a 25% working interest. In the third block of the Greater Rochelle area, block 15/26b, Nexen and Premier are partners, each with a 50% working interest.

East Rochelle. Our reserves at the East Rochelle field are a gas/condensate mix and account for 7.5 MMBOE of our proved reserves at December 31, 2010. In February 2011, we received approval of the FDP for the East Rochelle field by the DECC. The approval of East Rochelle represents phase one of the development of the Greater Rochelle area. The current East Rochelle FDP calls for the subsea development to be linked, by a 30 kilometer pipeline, to production facilities on the Scott Platform. First production is planned for the second half of 2012.

West Rochelle. Nexen operated the first well in block 15/26b, which was drilled in September 2010 and encountered natural gas with an oil rim in a reservoir similar to that discovered at East Rochelle. The

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well was sidetracked to the north and encountered hydrocarbons that extend the Greater Rochelle area. This well confirmed the reserves on our interest in block 15/26c.

Columbus. We hold a 25% working interest in the Columbus field, which is operated by Serica Energy plc. Columbus is a gas/condensate field in the Central Graben region of the North Sea. During 2010, we, along with our partners in Columbus, agreed to study an option of producing the field using a new bridge-linked platform connected to the Lomand Platform. We expect to file an updated FDP later in 2011 with project sanction by the DECC anticipated later in the year. We believe that first production from this field could occur as early as 2012.

Producing Fields

Our four producing fields in the U.K. — Alba, Bittern, Enoch and Goldeneye — held a combined 1.6 MMBOE of proved reserves as of December 31, 2010. Sales from these fields totaled 1,057 MBOE for the year ended December 31, 2010. In addition, we hold interests in the Ivanhoe, Rob Roy, Hamish (collectively, “IVRRH”), Renee and Rubie fields, each of which is currently shut in.

In 2010, the Goldeneye field represented nearly all of our gas production in the U.K. The field was shut-in in early December 2010 due to flow assurance issues resulting from increased water production. The Goldeneye field is a mature gas field, nearing the end of its production life. When we acquired the Goldeneye field in October 2006, it contained estimated proved reserves of approximately 2,237 MBOE. From our acquisition through December 31, 2010, the Goldeneye field has produced approximately 4,571 MBOE.

In February 2011, production from the Goldeneye field was re-started to commence flow trials to study pipeline hydraulic performance. These trials are continuing and we are monitoring progress along with the field operator. The trials, when concluded, should help us determine how much more production may be expected from the Goldeneye field. In addition, the operator is evaluating options to use the Goldeneye reservoir as a carbon-capture facility, which may reduce our abandonment obligations for the field.

Production from each of our IVRRH, Renee and Rubie fields is currently suspended. Previously, each of these fields produced to a single floating production facility that experienced significant increases in operating costs. As a result, production was suspended in the first quarter of 2009 and will remain suspended until the development activities at East Rochelle are operational, which we currently anticipate to be during 2012. After the start of East Rochelle production, we expect to re-develop these fields if commercially attractive and practicable.

U.S.

During 2009, we began acquiring acreage in U.S. onshore resource plays. Our U.S. assets held 5.4 MMBOE of proved reserves as of December 31, 2010. We believe that our U.S. acreage provides us with development projects with shorter timeframes to first production at lower costs than our North Sea assets. In addition, our U.S. acreage covers a broad spectrum of resource plays, from established areas such as Haynesville and Marcellus areas, to emerging plays in Alabama and Montana.

Our strategy for our U.S. operations has been to employ a measured approach that seeks to balance U.S. natural gas prices with drilling costs. We plan to continue this disciplined approach, which includes:


	•	a one to two rig drilling program in Louisiana and East Texas for our interests in the Haynesville area and Cotton Valley trend;

	•	a measured drilling program to delineate our position in the Marcellus area while pipeline infrastructure issues are resolved; and

	•	a thorough analysis of test well results in Alabama and Montana before finalizing any development plans in these exploratory areas.

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We believe this approach in the U.S. should provide flexibility to adjust our drilling activity in accordance with current and future commodity prices and our operating results, while still allowing our U.S. operations to grow and provide near-term return on capital to balance our longer production-cycle U.K. projects.

Haynesville Area

The Haynesville area has become one of the most active natural gas plays in the U.S. This area is defined by a Jurassic shale formation located approximately 1,000 to 1,500 feet below the base of the Cotton Valley formation at depths ranging from approximately 10,500 feet to 13,000 feet. The formation is 125 to 250 feet thick and is composed of organic-rich, black shale. It is located across numerous parishes in Northwest Louisiana, primarily in Caddo, Bossier, Red River, DeSoto, Webster and Bienville parishes, and also in East Texas. Numerous shallower secondary objectives exist in the Haynesville area, including the overlying Jurassic Cotton Valley Sandstone and Bossier Shale intervals.

Through several transactions, we have acquired non-operated interests in both producing wells and prospective acreage in the Haynesville area. In October 2009, we purchased interests in 24 wells and certain proved undeveloped locations in North Louisiana and East Texas for $15 million in cash. These 24 wells produce primarily from the Cotton Valley trend. In 2010, we acquired additional acreage in the Haynesville and Marcellus areas for a combined $22.5 million.

In the Haynesville area, we have had drilling activity in the Woodardville, Jamestown, Bull Bayou, Metcalf and Grand Cane fields in Louisiana, and the Willow Springs field in East Texas. During 2010, we drilled 12 Haynesville Shale wells, all of which were successful.

Marcellus Area

The Marcellus area is a Middle Devonian-aged shale that underlies much of Pennsylvania, New York, Ohio, West Virginia and adjacent states. Within the past few years, advances in two technologies, fracture stimulation and horizontal drilling, have produced promising results in the Marcellus area. These developments have resulted in significantly increased leasing and drilling activity in the area. We have acquired interests in the Marcellus area in several project areas, including portions of Cameron, Elk, Potter, McKean, Jefferson, Clarion and Clearfield counties, Pennsylvania.

During 2010, we successfully completed one well, which is now on production, and commenced drilling the first of two planned horizontal tests to further evaluate the Daniel Field in Cameron County. The first horizontal test well was successfully drilled and is waiting on completion. We are currently drilling the second test well and may drill additional wells to delineate the area. In parallel, we are working on expanding pipeline infrastructure, including options to connect with one of three major pipelines in Cameron County.

Alabama

We hold non-operating interests in approximately 61,000 net acres with exposure to emerging gas shale plays in western Alabama. We believe that our position allows us to target multiple gas shale intervals, with a primary focus on the Devonian shale. We drilled two vertical pilot wells during 2010 and are evaluating the results of these wells for future horizontal re-entries and/or completion tests before formulating an appropriate completion and development plan.

Central Montana

We own non-operating interests in approximately 73,000 net acres in central Montana, with exposure to the Mississippian Heath oil-prone source shale. This region has historically produced a significant amount of oil from the Cretaceous through the Mississippian reservoirs. We currently plan to participate in the drilling of three vertical pilot wells during 2011. We intend to monitor the results of these wells before determining further appraisal or development plans.

S-7

2011 Capital Budget

We anticipate spending approximately $150 million during 2011 to fund our oil and gas activities in the U.S. and U.K., with approximately 60% of those expenditures anticipated to be focused on our U.K. assets. In the U.K., our activity during 2011 will be primarily concentrated on the Bacchus and Greater Rochelle development projects. At the Bacchus project, we plan to drill three production wells and install the infrastructure to allow first production in the second half of 2011. At the Greater Rochelle project, our focus will be completing engineering and procuring long lead-time equipment to prepare Greater Rochelle for a 2012 first production date from the East Rochelle area. We also intend to begin actual construction of the subsea infrastructure and modifications to the Scott platform to prepare it for production from the Greater Rochelle area. Additionally, we expect to continue to further our development program at our Columbus project, including ongoing engineering assessments for future production and commercial off-take solutions.

Our primary focus during 2011 in the U.S. will be in the Haynesville and Marcellus areas as we believe this acreage contains near-term production potential. The ongoing U.S. program and expenditures will be tailored based on early drilling results and U.S. gas prices in 2011. During 2011, we expect to further evaluate our two existing frontier plays in Alabama and Montana through the drilling of additional test wells.

We intend to fund our capital expenditures through cash on hand and cash flow generated from operations. The majority of our cash on hand was acquired through our capital raising activities in 2010, including our 15.0% senior term loan due 2013 (the “Senior Term Loan”) and the sale of our Cygnus reserves. The timing, completion and progress of our 2011 capital program is subject to a number of factors, including availability of capital, drilling results, drilling and production costs, availability of drilling services and equipment, partner approvals and technical work. Based on these and other factors, we may increase or decrease our planned capital program or prioritize certain projects over others.

Recent Developments

Rochelle Field Development Plan Approval

On February 28, 2011, the DECC approved the Rochelle FDP for Block 15/27 in East Rochelle. This approval represents phase one of the development of the Greater Rochelle area.

Bacchus Acquisition

On February 23, 2011, we closed our acquisition of an additional 20% working interest in the Bacchus development for approximately $9.2 million in cash payable at closing and approximately $6.2 million in cash payable at the earlier of three months after first production or the last business day of 2011. In addition, we paid capital costs previously incurred by the seller of $9.4 million. Following the acquisition, we hold an aggregate working interest of 30%. First production is expected from the Bacchus field in the second half of 2011. Please read “— Our Company.”

Amendment of 11.5% Convertible Bonds due 2014

On March 11, 2011, we entered into an amendment (the “Amendment”) to the Trust Deed dated as of January 24, 2008 with Smedvig QIF PLC and the other parties thereto related to our 11.5% convertible bonds due 2014 (the “2014 Convertible Bonds”). The Amendment provides for:


	•	the amendment of the maturity date of the 2014 Convertible Bonds from January 24, 2014 to January 24, 2016;

	•	the amendment of the date upon which the holders of the 2014 Convertible Bonds may first exercise a put right, and the occurrence of the conversion price reset if such put right is not exercised, from January 24, 2012 to January 24, 2016; and

	•	on and after March 31, 2014, a reduction in the interest rate payable on the 2014 Convertible Bonds from 11.5% to 7.5%.

S-8

Following the Amendment and the application of the net proceeds from this offering to repurchase or redeem all $81.25 million of our 6.00% convertible senior notes due 2012 (the “2012 Convertible Notes”), our Senior Term Loan will mature on August 16, 2013. Previously, our Senior Term Loan could have become due and payable in full on October 14, 2011.

New York Stock Exchange Listing

On March 15, 2011, we consummated the transfer of the primary listing for our common stock from the NYSE Amex to the New York Stock Exchange under the symbol “END.”

Corporate Information

We are a Nevada corporation formed in 2000. Our principal executive offices are located at 1001 Fannin Street, Suite 1600, Houston, Texas 77002. Our common stock is listed on the New York Stock Exchange under the symbol “END.” We maintain a web site at http://www.endeavourcorp.com. However, the information on, or accessible through, our website is not part of this prospectus supplement, and you should rely only on the information contained in this prospectus supplement and in the documents incorporated herein by reference when making a decision as to whether to buy our common stock in this offering.

S-9

THE OFFERING


Issuer		Endeavour International Corporation.

Shares of common stock offered		8,000,000 shares.

Option to purchase additional shares		The underwriters may also purchase up to an additional 1,200,000 shares from us, at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus supplement to cover over-allotments, if any.

Shares of common stock outstanding following this offering¹		33,126,858 shares (34,326,858 shares if the underwriters exercise their over-allotment option in full).

Use of proceeds		We intend to use the estimated net proceeds from this offering of approximately $ million (or $ million if the underwriters exercise their over-allotment option in full) to repurchase or redeem all $81.25 million of our 2012 Convertible Notes. The remaining net proceeds will be used for general corporate purposes. For more information about our use of proceeds from this offering, please read “Use of Proceeds.”

NYSE symbol		END.

Risk Factors		Investing in our common stock involves substantial risks. You should carefully consider the risk factors set forth in the section entitled “Risk Factors” and the other information contained in this prospectus supplement and the accompanying prospectus and the documents incorporated by reference herein, prior to making an investment in our common stock. Please read “Risk Factors” beginning on page S-18.


(1)		Based on 25,126,858 shares outstanding as of March 11, 2011.

Unless we indicate otherwise or the context otherwise requires, all of the information in this prospectus supplement:


	•	assumes no exercise of the underwriters’ over-allotment option; and

	•	does not reflect as of December 31, 2010: (i) 464,096 shares of our common stock that may be issued pursuant to the exercise of outstanding stock options held by our directors, officers and employees, (ii) 1,476,894 shares available for issuance under our long-term incentive plans or (iii) 12,858 shares that may be issued upon the exercise of outstanding warrants.

S-10

Summary Consolidated Historical Financial Data

Set forth below is our summary consolidated historical financial data for the periods indicated. The historical financial data for the fiscal years ended December 31, 2008, 2009 and 2010 and the balance sheet data at December 31, 2009 and 2010 have been derived from our audited financial statements that are incorporated by reference in this prospectus supplement. The share and per share information presented below has been restated to reflect our November 2010 reverse stock split. Please read “Price Range of Common Stock.” In addition, we completed the divestiture of our Norwegian subsidiary on May 14, 2009, and the historical financial information below has been restated to reflect the classification of the results of operations and financial position of that subsidiary as discontinued operations for all periods presented. You should read the following summary financial data in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2010, which is incorporated by reference herein.


	Year Ended December 31,
	2008			2009			2010
	(Dollars in thousands, except per share data)

Revenues	$	170,781		$	62,293		$	71,675
Cost of Operations:
Operating expenses		32,317			17,776			15,347
Depreciation, depletion and amortization		67,326			34,020			28,894
Impairment of oil and gas properties		36,970			43,929			7,692
General and administrative		15,932			16,966			18,415

Total Expenses		152,545			112,691			70,348

Income (Loss) from Operations		18,236			(50,398	)		1,327

Other Income (Expense):
Derivatives:
Realized gains (losses)		(28,578	)		35,422			(11,753	)
Unrealized gains (losses)		76,666			(55,598	)		12,291
Interest expense		(22,975	)		(16,630	)		(34,592	)
Gain on sale of reserves in place		—			—			87,171
Interest income and other		6,626			(7,483	)		1,299

Total Other Income (Expense)		31,739			(44,289	)		54,416

Income (Loss) Before Income Taxes		49,975			(94,687	)		55,743
Income Tax Expense (Benefit)		24,116			(7,158	)		(788	)

Income (Loss) from Continuing Operations		25,859			(87,529	)		56,531

Discontinued Operations, net of tax:
Income (loss) from operations		30,631			(774	)		—
Gain on sale		—			47,308			—

Income (Loss) from Discontinued Operations		30,631			46,534			—

Net Income (Loss)		56,490			(40,995	)		56,531
Preferred Stock Dividends:
Dividends declared		10,809			9,757			2,227
Non-cash charge under fair value accounting upon redemption		—			11,454			—

Total Preferred Stock Dividends		10,809			21,211			2,227

Net Income (Loss) to Common Stockholders	$	45,681		$	(62,206	)	$	54,304

S-11


	Year Ended December 31,
	2008		2009			2010
	(Dollars in thousands, except per share data)

Basic Net Income (Loss) per Common Share:
Continuing operations	$	0.82	$	(5.84	)	$	2.34
Discontinued operations		1.67		2.50			—

Total	$	2.49	$	(3.34	)	$	2.34

Diluted Net Income (Loss) per Common Share:
Continuing operations	$	0.59	$	(4.70	)	$	1.95
Discontinued operations		1.20		2.50			—

Total	$	1.79	$	(2.20	)	$	1.95

Weighted Average Number of Common Shares Outstanding:
Basic		18,330		18,613			22,252
Diluted		25,473		18,613			28,886


	As of December 31,
	2009		2010
	(Dollars in thousands)

Balance Sheet Data:
Cash, cash equivalents and restricted cash(1)	$	30,166	$	131,043
Property and equipment, net		266,587		364,677
Total assets		538,879		750,287
Long-term debt, including current maturities		223,385		345,306
Convertible preferred stock		59,058		53,152
Stockholders’ equity		60,133		154,618


(1)		Includes $2.9 million and $31.8 million of restricted cash as of December 31, 2009 and 2010, respectively.

The following table includes the non-GAAP financial measures Discretionary Cash Flow, Net Income as Adjusted and Adjusted EBITDA. For a definition of these measures and reconciliations to their most directly comparable financial measures calculated and presented in accordance with generally accepted accounting principles (“GAAP”), please read “— Non-GAAP Financial Measures and Reconciliations.”


	Year Ended December 31,
	2008			2009			2010
	(Dollars in thousands)

Cash flow data:
Net cash provided by operating activities	$	133,180		$	55,711		$	17,019
Net cash provided by (used in) investing activities		(64,851	)		31,120			(56,314	)
Net cash provided by (used in) financing activities		(46,613	)		(97,700	)		111,275
Key statistics:
Discretionary Cash Flow	$	121,066		$	71,359		$	21,121
Net Income as Adjusted(1)		16,523			41,093			57,352
Adjusted EBITDA(1)		176,558			64,616			124,756


(1)		Includes $87.2 million of gain from the sale of our Cygnus asset in 2010.

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Summary Reserve and Operating Data

Reserve Data

The following table presents summary data with respect to our estimated net proved oil and natural gas reserves as of December 31, 2008, 2009 and 2010. The reserve estimates as of December 31, 2009 and 2010 are based on evaluations prepared by our internal reserve engineers, which have been audited by Netherland, Sewell & Associates, Inc. The reserve estimates as of December 31, 2008 were prepared by Netherland, Sewell & Associates, Inc.

These reserve estimates were prepared in accordance with the SEC’s rules regarding oil and natural gas reserve reporting. You should refer to “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Business” in our Annual Report on Form 10-K for the year ended December 31, 2010, which is incorporated by reference herein, in evaluating the material presented below.


	As of December 31,
	2008			2009			2010

Net proved reserves:
United Kingdom:
Oil (MBbls)		2,131			3,348			3,664
Gas (MMcf)		27,130			78,316			56,177
Oil equivalents (MBOE)(1)		6,653			16,401			13,027
United States:
Oil (MBbls)		18			18			59
Gas (MMcf)		690			10,784			31,777
Oil equivalents (MBOE)(1)		133			1,815			5,355
Discontinued operations — Norway:
Oil (MBbls)		1,406			—			—
Gas (MMcf)		4,977			—			—
Oil equivalents (MBOE)(1)		2,236			—			—
Total:
Oil (MBbls)		3,555			3,366			3,723
Gas (MMcf)		32,797			89,100			87,954
Oil equivalents (MBOE)(1)		9,022			18,216			18,382
Percentage natural gas		61	%		82	%		80	%
Percentage proved developed		52.8	%		15.9	%		19.4	%
Present value of future net revenues before income taxes (in thousands)(2,3)	$	64,579		$	56,726		$	224,627
Standardized measure of discounted future net cash flows (in thousands)(3,4)	$	49,662		$	55,698		$	111,297


(1)		One Bbl of oil is equal to six Mcfe based on an approximate energy equivalency. This is a physical correlation and does not reflect a value or price relationship between the commodities.

(2)		We set forth our definition of the present value of future net revenues before income taxes (“PV-10”) (a non-GAAP financial measure) and a reconciliation of PV-10 to the standardized measure of discounted net cash flows under “— Non-GAAP Financial Measures and Reconciliations.”

(3)		Year-end prices per Mmbtu of natural gas used in making the present value determinations as of December 31, 2008, 2009 and 2010, respectively, were: (i) for the U.K., $8.70, $4.96 and $6.58, and (ii) for the U.S., $5.60, $3.86 and $4.40. Year-end prices per Bbl of oil used in making the present value determination as of December 31, 2008, 2009 and 2010, respectively, were: (i) for the U.K., $36.55, $60.40 and $79.37, and (ii) for the U.S., $41.00, $61.08 and $79.81. Year end prices per Mmbtu of natural gas and

S-13


		per Bbl of oil used in making the present value determination for Norway as of December 31, 2008 were $8.70 and $36.55, respectively. The present value determinations do not include estimated future cash inflows from our hedging programs.

(4)		The standardized measure of discounted future net cash flows represents the present value of future net revenues after income tax discounted at 10% per annum and has been calculated in accordance with SFAS No. 69, “Disclosures About Oil and Gas Producing Activities.”

Production and Operating Data

The following table presents summary information concerning our production results and operating costs and expenses for the years ended December 31, 2008, 2009 and 2010.


	Year Ended December 31,
	2008			2009		2010

Sales volume(1):
Oil and condensate sales (Mbbls):
United Kingdom		1,032			690		545
United States		—			4		6

Continuing operations		1,032			694		551
Discontinued operations — Norway		726			310		—

Total		1,758			1,004		551

Gas sales (MMcf):
United Kingdom		6,532			3,743		3,071
United States		—			320		2,636

Continuing operations		6,532			4,063		5,707
Discontinued operations — Norway		2,322			686		—

Total		8,854			4,749		5,707

Oil equivalent sales (MBOE):
United Kingdom		2,121			1,314		1,057
United States		—			58		445

Continuing operations		2,121			1,372		1,502
Discontinued operations — Norway		1,113			425		—

Total		3,234			1,797		1,502

Total BOE per day		8,835			4,923		4,115

Physical production volume (BOE per day)(2):
United Kingdom		5,804			3,669		2,904
United States		—			162		1,221

Continuing operations		5,804			3,831		4,125
Discontinued operations — Norway		3,033			1,156		—

Total		8,837			4,987		4,125

Realized prices(3):
Oil and condensate price ($ per Bbl):
Before commodity derivatives	$	90.53		$	52.15	$	76.39
Effect of commodity derivatives		(14.50	)		22.51		(5.61	)

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	Year Ended December 31,
	2008			2009		2010

Realized prices including commodity derivatives	$	76.03		$	74.66	$	70.78

Gas price ($ per Mcf):
Before commodity derivatives	$	11.44		$	5.77	$	5.18
Effect of commodity derivatives		(0.35	)		2.69		0.27

Realized prices including commodity derivatives	$	11.09		$	8.46	$	5.45

Equivalent oil price ($ per BOE):
Before commodity derivatives	$	80.54		$	44.44	$	47.72
Effect of commodity derivatives		(8.84	)		19.71		(1.03	)

Realized prices including commodity derivatives	$	71.70		$	64.15	$	46.69

Operating costs ($ per BOE)(4)	$	14.40		$	12.97	$	10.22


(1)		We record oil revenues on 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 sales.

(3)		The average sales prices reflect both our continuing and discontinued operations and include realized gains and losses for derivative contracts we utilize to manage price risk related to our future cash flows.

(4)		Operating costs reflect both our continuing and discontinued operations and are costs incurred to operate and maintain our wells and related equipment and include cost of labor, well service and repair, location maintenance, power and fuel, transportation, cost of product and production related general and administrative costs.

Non-GAAP Financial Measures and Reconciliations

PV-10

PV-10 is derived from the standardized measure of discounted future net cash flows, which is the most directly comparable GAAP financial measure. PV-10 is a computation of the standardized measure of discounted future net cash flows on a pre-tax basis. PV-10 is equal to the standardized measure of discounted future net cash flows at the applicable date, before deducting future income taxes, discounted at 10%. We believe that the presentation of PV-10 is relevant and useful to investors because it presents the discounted future net cash flows attributable to our estimated net proved reserves prior to taking into account future corporate income taxes, and it is a useful measure for evaluating the relative monetary significance of our oil and natural gas properties. Further, investors may utilize the measure as a basis for comparison of the relative size and value of our reserves to other companies. PV-10, however, is not a substitute for the standardized measure of discounted future net cash flows. Our PV-10 measure and the standardized measure of discounted future net cash flows do not purport to present the fair value of our oil and natural gas reserves.

Our calculations of PV-10 and standardized measure as of December 31, 2009 and 2010 are based on evaluations prepared by our internal reserve engineers, which have been audited by Netherland, Sewell & Associates, Inc. Our calculations of PV-10 and standardized measure as of December 31, 2008 are based on

S-15

evaluations prepared by Netherland, Sewell & Associates, Inc. The following table provides a reconciliation of the standardized measure of future net cash flows to PV-10 as of December 31, 2008, 2009 and 2010.


	As of December 31,
	2008			2009			2010
	(in thousands)

PV-10	$	64,579		$	56,726		$	224,627
Present value of future income tax discounted at 10%	$	(14,887	)	$	(1,028	)	$	(113,330	)
Standardized measure of discounted future net cash flows	$	49,662		$	55,698		$	111,297

Discretionary Cash Flow, Net Income as Adjusted and Adjusted EBITDA

Net income can be significantly affected by various non-cash items, such as unrealized gains and losses on our commodity derivatives, currency impact of long-term liabilities and deferred taxes. Given the significant impact that non-cash items may have on our net income, we use various measures in addition to net income and net cash provided by operating activities, including non-financial performance indicators and non-GAAP measures as key metrics to manage our business. These metrics demonstrate our ability to maintain or grow production levels and reserves, internally fund capital expenditures and service debt as well as provide comparisons to other oil and gas exploration and production companies. Net Income (Loss) as Adjusted, adjusted earnings before interest, taxes, depreciation, depletion and amortization, adjusted for the early termination of commodity derivatives and income (loss) from discontinued operations (“Adjusted EBITDA”) and cash flow from operating activities before the changes in operating assets and liabilities (“Discretionary Cash Flow”) are internal, supplemental measures of our performance that are not required by, or presented in accordance with GAAP. The calculations of these non-GAAP measures and the reconciliation of net income (loss) to these non-GAAP measures are provided below.

We view these non-GAAP measures, and we believe that others in the oil and gas industry, securities analysts, investors, and other interested parties view these, or similar, non-GAAP measures, as commonly used analytic indicators to compare performance among companies in our industry and in the evaluation of issuers.

Because Net Income (Loss) as Adjusted, Adjusted EBITDA and Discretionary Cash Flow are not measures determined in accordance with GAAP and thus are susceptible to varying calculations, our non-GAAP measures as presented may not be comparable to similarly titled measures of other companies. Net Income (Loss) as Adjusted, Adjusted EBITDA and Discretionary Cash Flow have limitations as analytical tools, and you should not consider these measures in isolation, or as a substitute for analysis of our financial statement data presented in the consolidated financial statements as reported under GAAP.

S-16

The table below provides a reconciliation of each of Net Income (Loss) as Adjusted, Adjusted EBITDA and Discretionary Cash Flow to net income (loss).


	Year Ended December 31,
	2008			2009			2010
	(Dollars in thousands)

Net income (loss)	$	56,490		$	(40,995	)	$	56,531
Depreciation, depletion and amortization		81,734			38,701			28,894
Impairment of oil and gas properties		36,970			43,929			7,692
Deferred tax expense (benefit)		17,682			4,599			(3,367	)
Gain on sales		(258	)		(47,308	)		(87,171	)
Unrealized (gain) loss on derivatives		(76,666	)		55,598			(12,291	)
Early termination of commodity derivatives		—			—			10,201
Other		5,114			16,835			20,632

Discretionary Cash Flow	$	121,066		$	71,359		$	21,121

Net income (loss)	$	56,490		$	(40,995	)	$	56,531
Impairment of oil and gas properties (net of tax)(1)		18,485			28,263			7,692
Unrealized (gain) loss on derivatives (net of tax)(2)		(37,743	)		33,702			(6,820	)
Currency impact on deferred taxes		(20,709	)		20,123			(51	)

Net Income as Adjusted	$	16,523		$	41,093		$	57,352

Net income (loss)	$	56,490		$	(40,995	)	$	56,531
Unrealized (gain) loss on derivatives		(76,666	)		55,598			(12,291	)
Net interest expense		21,301			16,420			34,517
Depreciation, depletion and amortization		81,734			38,701			28,894
Impairment of oil and gas properties		36,970			43,929			7,692
Income tax expense (benefit)		56,729			(1,729	)		(788	)
Early termination of commodity derivatives		—			—			10,201
Gain on sale of discontinued operations		—			(47,308	)		—

Adjusted EBITDA	$	176,558		$	64,616		$	124,756


(1)		Net of tax benefits of $(18,485), $(15,666) and none for 2008, 2009 and 2010, respectively.

(2)		Net of tax expense (benefit) of $38,923, $(21,896) and $5,471 for 2008, 2009 and 2010, respectively.

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RISK FACTORS

An investment in our common stock involves risks. In addition to the risks described below, you should also carefully read all of the other information included in this prospectus supplement, the accompanying prospectus and the documents we have incorporated by reference into this prospectus supplement in evaluating an investment in our common stock. If any of the described risks actually were to occur, our business, financial condition or results of operations could be affected materially and adversely. In that case, the trading price of our common stock could decline and you could lose all or part of your investment. The risks described below are not the only ones facing our company. Additional risks not presently known to us or that we currently deem immaterial individually or in the aggregate may also impair our business operations.

Risks Related to Our Business

We operate internationally and are subject to political, economic and other uncertainties.

We currently have operations in the U.S. and U.K. and may expand our operations to other countries or regions. International operations are subject to political, economic and other uncertainties, including:


	•	the risk of war, acts of terrorism, revolution, border disputes, expropriation, renegotiation or modification of existing contracts, and import, export and transportation regulations and tariffs;

	•	taxation policies, including royalty and tax increases and retroactive tax claims;

	•	exchange controls, currency fluctuations and other uncertainties arising out of foreign government sovereignty over our international operations;

	•	laws and policies of the U.S. affecting foreign trade, taxation and investment; and

	•	the possibility of being subject to the exclusive jurisdiction of foreign courts in connection with legal disputes and the possible inability to subject foreign persons to the jurisdiction of courts in the U.S.

The exploration, production and sale of oil and gas are extensively regulated by governmental bodies, which subjects us to increased costs in order to comply with applicable laws and regulations as well as significant uncertainties due to the potential for such laws and regulations to change and evolve. Applicable legislation and regulations are under constant review for amendment or expansion. These efforts frequently result in an increase in the regulatory burden on companies in our industry and consequently an increase in the cost of doing business and decrease in profitability. Numerous governmental departments and agencies are authorized to, and have, issued rules and regulations imposing additional burdens on the oil and gas industry that often are costly to comply with and carry substantial penalties for failure to comply. Production operations are affected by changing tax and other laws relating to the petroleum industry, by constantly changing administrative regulations and possible interruptions or termination by government authorities.

Oil and gas mineral rights may be held by individuals, corporations or governments having jurisdiction over the area in which such mineral rights are located. As a general rule, parties holding such mineral rights grant licenses or leases to third parties to facilitate the exploration and development of these mineral rights. The terms of the leases and licenses are generally established to require timely development. Notwithstanding the ownership of mineral rights, the government of the jurisdiction in which mineral rights are located generally retains authority over the manner of development of those rights. As such, we may become subject to certain requirements, obligations and timelines as established or demanded by the holder of the oil and gas mineral rights and such requirements or obligations may adversely impact our operations, cash flow and capital plans.

Economic conditions in the U.S. and key international markets may materially adversely impact our operating results, which could hinder or prevent us from meeting our future capital needs.

The U.S., U.K. and other world economies are slowly recovering from a recession which began in 2008 and extended into 2009. Growth has resumed, but remains modest. There are likely to be significant long-term effects resulting from the recession and credit market crisis, including a future global economic growth rate

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that is slower than what was experienced in recent years. In addition, more volatility may occur before a sustainable, yet lower, growth rate is achieved. Because global economic growth drives demand for energy from all sources, including fossil fuels, a lower future economic growth rate will result in decreased demand growth for our crude oil and natural gas production as well as lower commodity prices, which will reduce our cash flows from operations and our profitability and may adversely affect our ability to obtain funding for our projects.

Due to these and other factors, we cannot be certain that funding will be available if needed, and to the extent required, on acceptable terms or at all. If funding is not available as needed, or is available only on unfavorable terms, we may be unable to (i) meet our obligations as they come due, (ii) refinance or extend the maturity of our outstanding 6% Senior Convertible Notes which would result in the Senior Term Loan maturing and becoming due and payable in full on October 14, 2011, or (iii) implement our capital program, enhance our existing business, complete acquisitions or otherwise take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our production, revenues, results of operations and prospects.

Oil and gas prices are volatile, and a decline in oil and gas prices would reduce our revenues, profitability and cash flow and impede our growth.

Our revenues, profitability and cash flow depend substantially upon the prices and demand for oil and gas. The markets for these commodities are volatile, and even relatively modest drops in prices can significantly affect our financial results and impede our growth. Oil and gas prices increased to, and then declined significantly from, historical highs in 2008 and may fluctuate and decline significantly in the near future. Prices for oil and gas fluctuate in response to relatively minor changes in the supply and demand for oil and gas, market uncertainty and a variety of additional factors beyond our control, such as:


	•	global supply of oil and gas;

	•	level of consumer product demand;

	•	technological advances affecting oil and gas consumption;

	•	global economic conditions;

	•	price and availability of alternative fuels;

	•	actions of the Organization of Petroleum Exporting Countries and other state-controlled oil companies relating to oil price and production controls;

	•	governmental regulations and taxation;

	•	political conditions in or affecting other oil-producing and gas-producing countries;

	•	weather conditions;

	•	the proximity, capacity, cost and availability of pipeline and other transportation facilities; and

	•	the impact of energy conservation efforts.

Lower oil and gas prices may not only decrease our revenues on a per unit basis, but significant or extended price declines may also reduce the amount of oil and gas that we can produce economically. A reduction in production could result in a shortfall in expected cash flows and require us to reduce capital spending or borrow funds to cover any such shortfall. Any of these factors could negatively impact our future rate of growth and ability to replace our production.

In addition, we may, from time to time, enter into long-term contracts based upon our reasoned expectations for commodity price levels. If commodity prices subsequently decrease significantly for a sustained period, we may be unable to perform our obligations or otherwise breach the contract and be liable for damages.

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Competition for oil and gas properties and prospects is intense and some of our competitors have larger financial, technical and personnel resources that give them an advantage in evaluating, obtaining and developing properties and prospects.

We operate in a highly competitive environment for reviewing prospects, acquiring properties, marketing oil and gas and securing trained personnel. Many of our competitors are major or independent oil and gas companies that have longer operating histories in our areas of operation and employ superior financial resources which allow them to obtain substantially greater technical and personnel resources and which better enable them to acquire and develop the prospects that they have identified. We also actively compete with other companies when acquiring new licenses or oil and gas properties. Specifically, competitors with greater resources than our own have certain advantages that are particularly important in reviewing prospects and purchasing properties. Competitors may be able to evaluate, bid for and purchase a greater number of properties and prospects than our financial or personnel resources permit. Competitors may also be able to pay more for producing oil and gas properties and exploratory prospects than we are able or willing to pay. If we are unable to compete successfully in these areas in the future, our future revenues and growth may be diminished or restricted.

These competitors may also be better able to withstand sustained periods of unsuccessful drilling or downturns in the economy, including decreases in the price of commodities as experienced in 2008 and 2009. Larger competitors may also be able to absorb the burden of any changes in laws and regulations more easily than we can, which would also adversely affect our competitive position. In addition, most of our competitors have been operating for a much longer time and have demonstrated the ability to operate through industry cycles.

Our use of derivative transactions may limit future revenues from price increases and involves the risk that our counterparties may be unable to satisfy their obligations to us.

To manage our exposure to price or interest rate risk with our production, we routinely enter into commodity derivative contracts. The goal of these derivative contracts is to limit volatility and increase the predictability of cash flow. Although the use of derivative contracts limits the downside risk of price declines, their use also may limit future revenues from price increases. In addition, derivative contracts may expose us to the risk of financial loss in certain circumstances, including instances in which our production is less than expected or a sudden, unexpected event materially impacts oil or gas prices.

Derivative contracts also involve the risk that counterparties, which generally are financial institutions, may be unable to satisfy their obligations to us. If any one of our counterparties were to default on its obligations to us under the derivative contracts or seek bankruptcy protection it could have a material adverse effect on our expected cash flows and our ability to fund our planned activities and could result in a larger percentage of our future production being subject to commodity price changes. In addition, in the current economic environment and tight financial markets, the risk of a counterparty default is heightened and it is possible that fewer counterparties will participate in future derivative transactions, which could result in greater concentration of our exposure to any one counterparty or a larger percentage of our future production being subject to commodity price changes.

We are dependent on our executive officers and need to attract and retain additional qualified personnel.

Our future success depends in large part on the service of our executive officers. The loss of these executives could have a material adverse effect on our business. Although we have employment agreements with certain of our executive officers, there can be no assurance that we will have the ability to retain their services. Further, we do not maintain key-person life insurance on any executive officers.

Our future success also depends upon our ability to attract, assimilate and retain highly qualified technical and other management personnel who are essential for the identification and development of our prospects. There can be no assurance that we will be able to attract, integrate and retain key personnel, and our failure to do so would have a material adverse effect on our business.

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Our operations are sensitive to currency rate fluctuations.

Our operations are sensitive to fluctuations in foreign currency exchange rates, particularly between the U.S. dollar and the British pound. Our financial statements, presented in U.S. dollars, are affected by foreign currency fluctuations through both translation risk and transaction risk. Volatility in exchange rates may adversely affect our results of operation, particularly through the weakening of the U.S. dollar relative to other currencies.

Risks Related to Executing Our Strategy and Operations

To maintain and grow our production and cash flow, we must continue to develop and produce existing reserves and discover or acquire new oil and gas reserves to develop and produce.

Our future oil and gas production is highly dependent upon our level of success in finding or acquiring additional reserves. Producing oil and gas reserves are generally characterized by declining production rates that vary depending on reservoir characteristics and other factors. Our reserves will decline unless we acquire properties with proved reserves or conduct successful development and exploration drilling activities. We accomplish this through successful drilling programs and the acquisition of properties. However, we may be unable to find, develop or acquire additional reserves or production at an acceptable cost or at all. Acquisition opportunities in the oil and gas industry are very competitive, which can increase the cost of, or cause us to refrain from, completing acquisitions.

If we are unable to find, develop or acquire additional reserves to replace our current and future production, our production rates will decline even if we drill the undeveloped locations that were included in our estimated proved reserves. Our future oil and gas reserves and production, and therefore our cash flow and income, are dependent on our success in economically finding or acquiring new reserves and efficiently developing our existing reserves.

We may be unable to make attractive acquisitions, and any acquisition we complete is subject to substantial risks that could impact our business.

As part of our growth strategy, we intend to continue to pursue strategic acquisitions of new properties or businesses that expand our current asset base and potentially offer unexploited reserve potential. Our growth strategy could be impeded if we are unable to acquire additional interests in oil and gas prospects on a profitable basis. Acquisition opportunities in the oil and gas industry are very competitive, which can increase the cost of, or cause us to refrain from, completing acquisitions. The success of any acquisition will depend on a number of factors and involves potential risks, including among other things:


	•	the inability to estimate accurately the costs to develop the interests in oil and gas prospects, the recoverable volumes of reserves, rates of future production and future net cash flows attainable from the reserves;

	•	the assumption of unknown liabilities, losses or costs for which we are not indemnified or for which the indemnity we receive is inadequate;

	•	the validity of assumptions about costs, including synergies;

	•	the impact on our liquidity or financial leverage of using available cash or debt to finance acquisitions;

	•	the diversion of management’s attention from other business concerns; and

	•	an inability to hire, train or retain qualified personnel to manage and operate our growing business and assets.

All of these factors affect whether an acquisition will ultimately generate cash flows sufficient to provide a suitable return on investment. Consistent with industry practices, we typically are only able to perform limited reviews of the properties we seek to acquire. As a result, among other risks, our initial estimates of reserves, and the costs associated with developing those estimated reserves, may be subject to revision following an acquisition, which may materially and adversely impact the desired benefits of the acquisition.

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Our expectations for future drilling and development activities will be realized over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing of such activities.

We have identified drilling locations, prospects for future drilling opportunities and development plans for our commercial discoveries, including development, exploratory and other drilling and enhanced recovery activities. These drilling and development locations and prospects represent a significant part of our future drilling and development plans. Our ability to drill and develop these locations depends on a number of factors, including the availability of capital, seasonal conditions, third-party operators, regulatory approvals, negotiation of agreements with third parties, commodity prices, costs and drilling results. In particular, delays in obtaining regulatory approvals relating to our field development programs for our North Sea discoveries can materially impact our ability to commence production at these discoveries which would materially impact our reserves, cash flow and results of operations. Furthermore, because of these uncertainties, we cannot give any assurance as to the timing of these activities or that they will ultimately result in the realization of proved reserves or meet our expectations for success. As such, our actual drilling and enhanced recovery activities may materially differ from our current expectations, which could have a significant adverse effect on our financial condition and results of operations.

Our drilling projects are based in part on seismic and other technical data, which cannot ensure the commercial success of a prospect.

Our decisions to purchase, explore, develop and exploit prospects or properties depend in part on data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often uncertain. Seismic data and visualization techniques only assist geoscientists and geologists in identifying subsurface structures and hydrocarbon indicators and do not enable an interpreter to conclusively determine whether hydrocarbons are present or producible economically. In addition, the use of seismic and other advanced technologies may require greater predrilling expenditures than other drilling strategies. Because of these factors and the inherent uncertainties surrounding the evaluation of exploration prospects, we could incur losses as a result of exploratory drilling expenditures. Poor results from drilling activities would have a material adverse effect on our future cash flows, ability to replace reserves and results of operations.

Reserve estimates depend on many assumptions that may turn out to be inaccurate and any material inaccuracies in the reserve estimates or underlying assumptions of our assets will materially affect the quantities and present value of those reserves.

Estimating oil and gas reserves is complex and inherently imprecise. It requires interpretation of the available technical data and making many assumptions about future conditions, including price and other economic factors. In preparing such estimates, projection of production rates, timing of development expenditures and available geological, geophysical, production and engineering data are analyzed. The extent, quality and reliability of these data can vary. This process also requires economic assumptions about matters such as oil and gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. If our interpretations or assumptions used in arriving at our reserve estimates prove to be inaccurate, the amount of oil and gas that will ultimately be recovered may differ materially and adversely from the estimated quantities and net present value of reserves owned by us.

A significant portion of our total estimated net proved reserves at December 31, 2010 were undeveloped, and those reserves may not ultimately be developed.

At December 31, 2010, approximately 81% of our total estimated net proved reserves were undeveloped. Recovery of undeveloped reserves requires significant capital expenditures and successful drilling. Our reserve data assumes that we can and will make these expenditures and conduct these operations successfully. These assumptions, however, may not prove correct. If we choose not to spend the capital to develop these reserves or if we are not otherwise able to successfully develop these reserves we may be required to write-off these reserves. Any such write-offs of our reserves could materially reduce our ability to borrow money and the value of our securities.

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Our offshore operations involve special risks that could increase our cost of operations and adversely affect our ability to produce oil and gas.

Offshore operations are subject to a variety of operating risks specific to the marine environment, such as capsizing, collisions and damage or loss from hurricanes or other adverse weather conditions. These conditions can cause substantial damage to facilities and interrupt production. As a result, we could incur substantial liabilities that could reduce or eliminate the funds available for exploration, development or leasehold acquisitions, or result in loss of equipment and properties. Offshore drilling in the North Sea generally requires more time and more advanced drilling technologies, involving a higher risk of technological failure and usually higher drilling costs. Moreover, offshore projects often lack proximity to the physical and oilfield service infrastructure, necessitating significant capital investment in subsea flow line infrastructure. Subsea tieback production systems require substantial time and the use of advanced and very sophisticated installation equipment supported by remotely operated vehicles. These operations may encounter mechanical difficulties and equipment failures that could result in significant cost overruns. As a result, a significant amount of time and capital must be invested before we can market the associated oil or gas, increasing both the financial and operational risk involved with these operations. Because of the lack and high cost of infrastructure, some offshore reserve discoveries may never be produced economically.

We have commenced exploration, production and development operations in the United States, and as a result, our ability to successfully achieve our goals is subject to greater risk and uncertainty.

In 2008, we began to pursue exploration, production and development activities in the U.S. Moreover, we did not have a significant U.S. presence in our assets and operations until late 2009. Because we have limited production history in the U.S. and do not have extensive experience in unconventional resource plays, we are less able to use past operational results to help predict future results. Our lack of operational experience in the U.S. may result in our not being able to fully execute our expected drilling programs in this region, and the return on investment from our United States operations may not be as attractive as expected. We cannot assure you that our efforts in the U.S. will be successful, or if successful will achieve the resource potential levels that we currently anticipate or achieve the anticipated economic returns based on our current financial models.

We are not the operator of our producing fields and will not be the operator of all of the interests we own or acquire, and therefore we may not be in a position to control the timing of development efforts, the associated costs, or the rate of production of the reserves in respect of such interests.

A significant number of our interests, including all of our producing fields, are currently operated by third parties. As a result, we may have limited ability to exercise influence over the operations of these interests or their associated costs. Dependence on the operator and other working interest owners for these projects, and limited ability to influence operations and associated costs could prevent the realization of expected returns on capital in drilling or acquisition activities. The success and timing of development and exploitation activities on properties operated by others depend upon a number of factors that will be largely outside our control, including:


	•	the operator’s expertise and financial resources;

	•	the timing and amount of their capital expenditures;

	•	the rate of production of the reserves;

	•	approval of other participants to drill wells and implement other work programs;

	•	the availability of suitable drilling rigs, drilling equipment, support vessels, production and transportation infrastructure and qualified operating personnel; and

	•	selection of technology.

Our inability to control the development efforts, costs and timing on the interests where we are not the operator could have a material adverse effect on our financial conditions, results of operations and business prospects.

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Actual production could differ significantly from forecasts.

From time to time we provide forecasts of expected quantities of future oil and gas production. These forecasts are based on a number of estimates, including expectations of production decline rates from existing wells, outcomes from future drilling activity and assumptions relating to ongoing operations and maintenance of producing wells. Should these estimates prove inaccurate, actual production could be adversely impacted. Furthermore, downturns in commodity prices could make certain drilling activities or production uneconomical, which would also adversely impact production. We may also adjust estimates of proved reserves to reflect production history, results of exploration and development, prevailing oil and gas prices and other factors, many of which are beyond our control.

Our insurance may not protect us against business and operating risks, including an operator of a prospect in which we participate failing to maintain or obtain adequate insurance.

Oil and gas operations are subject to particular hazards incident to the drilling and production of oil and gas, such as blowouts, cratering, explosions, uncontrollable flows of oil, gas or well fluids, fires and pollution and other environmental risks. These hazards can cause personal injury and loss of life, severe damage to and destruction of property and equipment, pollution or environmental damage and suspension of operations. We maintain insurance for some, but not all, of the potential risks and liabilities associated with our business. If a significant accident or other event resulting in damage to our operations, including severe weather, terrorist acts, war, civil disturbances, pollution or environmental damage, occurs and is not fully covered by insurance, it could adversely affect our financial condition and results of operations. We do not currently operate all of our oil and gas properties. In the projects in which we own non-operating interests, the operator may maintain insurance of various types to cover our operations with policy limits and retention liability customary in the industry. The occurrence of a significant adverse event that is not fully covered by insurance could result in the loss of our total investment in a particular prospect and additional liability for us, which could have a material adverse effect on our financial condition and results of operations and prospects.

The cost of decommissioning is uncertain.

We expect to incur obligations to abandon and decommission certain structures associated with our producing properties. To date, the industry has little experience of removing oil and gas structures from the North Sea, because few of the structures in the North Sea have been removed. Because experience in limited, we cannot precisely predict the costs of any future decommissions for which we might become obligated. Furthermore, we are required to post collateral as security over certain of our decommissioning liabilities in the North Sea. If actual decommission or abandonment costs exceed our estimates or reserves to satisfy such obligations, or we are required to provide a significant amount of collateral in cash or other security for these future costs, our financial condition, results of operations and prospects could be materially adversely affected.

Risks Related to Access to Capital and Financing

Our development and exploration operations require substantial capital, and we may be unable to obtain needed capital or financing on satisfactory terms, which could lead to a loss of properties and a decline in our oil and gas reserves.

The oil and gas industry is capital intensive. We make and expect to continue to make substantial capital expenditures in our business and operations for the exploration, development, production and acquisition of oil and gas reserves, including expenditures relating to the development of our discoveries in the North Sea and our acreage position in the Haynesville Shale and other U.S. plays. We intend to finance our future capital expenditures primarily with cash flow from operations and borrowings under our Senior Term Loan. Our cash flow from operations and access to capital is subject to a number of variables, including:


	•	our oil and gas reserves;

	•	the level of natural gas and crude oil we are able to produce from existing wells;

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	•	the prices at which natural gas and crude oil are sold; and

	•	our ability to acquire, locate and produce new reserves.

If our revenues decrease as a result of lower oil and gas prices, operating difficulties, declines in reserves or for any other reason, we may have limited ability to obtain the capital necessary to sustain our operations at current levels or to further develop and exploit our current properties, or for exploratory activity. In order to fund our capital expenditures, we may need to seek additional financing. Our credit agreements contain covenants restricting our ability to incur additional indebtedness without the consent of the lenders. Our lenders may withhold this consent in their sole discretion.

Furthermore, we may not be able to obtain debt or equity financing on terms favorable to us, or at all. In particular, the cost of raising money in the debt and equity capital markets has increased substantially while the availability of funds from those markets generally has diminished significantly. Also, as a result of concerns about the stability of financial markets generally and the solvency of counterparties specifically, the cost of obtaining money from the credit markets generally has increased as many lenders and institutional investors have increased interest rates, enacted tighter lending standards, refused to refinance existing debt at maturity on terms that are similar to existing debt, and reduced, or in some cases ceased, to provide funding to borrowers. The failure to obtain additional financing could result in a curtailment of our operations relating to exploration and development of our prospects, which in turn could lead to a possible loss of properties and a decline in our natural gas, crude oil and natural gas liquids reserves.

Our debt levels could negatively impact our financial condition, results of operations and business prospects.

As of December 31, 2010, we had $349.6 million in outstanding indebtedness. Our level of indebtedness could have important consequences on our operations, including:


	•	placing restrictions on certain operating activities;

	•	making it more difficult for us to satisfy our obligations under our indentures or the terms of our other debt instruments and increasing the risk that we may default on our debt obligations;

	•	requiring us to dedicate a substantial portion of our cash flow from operating activities to required payments on debt, thereby reducing the availability of cash flow for working capital, capital expenditures and other general business activities;

	•	limiting our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and other general business activities;

	•	decreasing our ability to withstand a downturn in our business or the economy generally; and

	•	placing us at a competitive disadvantage against other less leveraged competitors.

We may not have sufficient funds to repay our outstanding debt. If we are unable to repay our debt out of cash on hand, we could attempt to refinance such debt, sell assets or repay such debt with the proceeds from an equity offering. In addition, we cannot assure you that we will be able to generate sufficient cash flow from operating activities to pay the interest on our debt or that future borrowings, equity financings or proceeds from the sale of assets will be available to repay or refinance such debt. Furthermore, some of our existing debt instruments contain certain restrictions on our ability to repay other debt. For example, our Senior Term Loan prohibits cash on hand from being used to repay any debt other than that extended pursuant to the related Credit Agreement.

Factors that will affect our ability to raise cash through an offering of our capital stock, a refinancing of our debt or a sale of assets include financial market conditions, our market value, our reserve levels and our operating performance at the time of such offering or other financing. We cannot assure you that any such offering, refinancing or sale of assets can be successfully completed. The inability to repay or refinance our debt could have a material adverse effect on our operations and negatively impact our capital program.

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A change of control may adversely affect our liquidity and require refinancing of certain debt instruments.

Upon certain specified change of control events, each lender under our debt agreements may cancel the facility and declare as due and payable any outstanding loans plus accrued and unpaid interest, outstanding letters of credit and other outstanding fees. We cannot assure you we would have sufficient financial resources to purchase the notes for cash or repay the lenders under our debt agreements upon the occurrence of a change of control. If a change of control occurs, we may be required to refinance our indebtedness. There can be no assurance that we would be able to refinance our indebtedness or, if a refinancing were to occur, that the refinancing would be on terms favorable to us.

If we are unable to fulfill commitments under any of our oil and gas interests, we will lose our interest, and our entire investment, in such interest.

Our ability to retain oil and gas interests will depend on our ability to fulfill the commitments made with respect to each interest. We cannot assure you that we or the other participants in the projects will have the financial ability to fund these potential commitments. If we are unable to fulfill commitments under any of our interests, we will lose our interest, and our entire investment, in such interest.

Risks Related to Environmental and Other Regulations

We are subject to environmental regulations that can have a significant impact on our operations.

Our operations are subject to a variety of national, state, local and international laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Failure to comply with these laws and regulations can result in the imposition of substantial fines and penalties as well as potential orders suspending or terminating our rights to operate. Some environmental laws to which we are subject to provide for strict liability for pollution damages and cleanup costs, rendering a person liable without regard to negligence or fault on the part of such person. In addition, we may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous substances such as oil and gas related products. Aquatic environments in which we operate are often particularly sensitive to environmental impacts, which may expose us to greater potential liability than that associated with exploration, development and production at many onshore locations.

Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly requirements for oil and gas exploration and production activities could require us, as well as others in our industry, to make significant expenditures to attain and maintain compliance which could have a corresponding material adverse effect on our competitive position, financial condition or results of operations. We cannot provide assurance that we will be able to comply with future laws and regulations to the same extent that we have complied in the past. Similarly, we cannot always precisely predict the potential impact of environmental laws and regulations which may be adopted in the future, including whether any such laws or regulations would restrict our operations in any area.

Current and future environmental regulations, including restrictions on emissions of greenhouse gases due to concerns about climate change, could reduce the demand for our products. Our business, financial condition and results of operations could be materially and adversely affected if this were to occur.

Under certain environmental laws and regulations, we could be subject to liability arising out of the conduct of operations or conditions caused by others, or for activities that were in compliance with all applicable laws at the time they were performed. Such liabilities can be significant, and if imposed could have a material adverse effect on our financial condition or results of operations.

Governmental regulations to which we are subject could expose us to significant fines and/or penalties and our cost of compliance with such regulations could be substantial.

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under constant review for amendment and expansion. These regulations and laws carry substantial penalties for failure to comply. The regulatory burden on the oil and gas industry increases our cost of doing business and, consequently, adversely affects our profitability. In addition, competitive conditions may be substantially affected by various forms of energy legislation and/or regulation considered from time to time by the governments and/or agencies thereof.

Federal and state legislative regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.

Hydraulic fracturing is an important and common practice that is used to stimulate production of hydrocarbons, particularly natural gas, from tight formations. We routinely utilize hydraulic fracturing techniques in many of our natural gas well drilling and completion programs. The process involves the injection of water, sand and chemicals under pressure into the formation to fracture the surrounding rock and stimulate production. The process is typically regulated by state oil and gas commissions. However, the EPA recently asserted federal regulatory authority over hydraulic fracturing involving diesel additives under the Safe Drinking Water Act’s Underground Injection Control Program. While the EPA has yet to take any action to enforce or implement this newly asserted regulatory authority, industry groups have filed suit challenging the EPA’s recent decision. At the same time, the EPA has commenced a study of the potential environmental impacts of hydraulic fracturing activities. Legislation has been introduced before Congress to provide for federal regulation of hydraulic fracturing and to require disclosure of the chemicals used in the fracturing process. In addition, some states have adopted, and other states are considering adopting, regulations that could impose more stringent permitting, disclosure and well construction requirements on hydraulic fracturing operations. For example, Pennsylvania, Colorado, and Wyoming have each adopted a variety of well construction, set back, and disclosure regulations limiting how fracturing can be performed and requiring various degrees of chemical disclosure. If new laws or regulations that significantly restrict hydraulic fracturing are adopted, such laws could make it more difficult or costly for us to perform fracturing to stimulate production from tight formations. In addition, if hydraulic fracturing becomes regulated at the federal level as a result of federal legislation or regulatory initiatives by the EPA, our fracturing activities could become subject to additional permitting requirements, and also to attendant permitting delays and potential increases in costs. Restrictions on hydraulic fracturing could also reduce the amount of oil and natural gas that we are ultimately able to produce from our reserves.

Climate change legislation or regulations restricting emissions of “greenhouse gases” could result in increased operating costs and reduced demand for the crude oil and natural gas that we produce.

There are a number of programs at the international, national, and local levels that aim to reduce greenhouse gas emissions. Changes to the existing laws or the enactment of new laws and regulations could increase our operating costs and reduce demand for our products. At this time, there is substantial uncertainty about the future of GHG emission limitations in the areas where we operate. For example, the first commitment period of the Kyoto Protocol is due to expire in 2012. Because the Cancun negotiations failed to reach a binding global agreement on climate change, we face uncertainty regarding the structure of a future international regime and potential implementing national laws addressing GHGs.

Rapidly evolving domestic legal and regulatory structures governing GHG emissions may increase the costs imposed upon our operations. For example, since December 2009, the United States Environmental Protection Agency has declared that GHGs threaten the environment, imposed limitations on GHGs from mobile sources and certain large stationary sources, and required certain industries to monitor and report their GHG emissions. These rules are all currently subject to legal challenges, but to this point, federal courts have refused to prevent EPA from implementing them. In addition, by the end of 2012, the EPA intends to impose New Source Performance Standards under the Clean Air Act that will apply to all fossil-fuel fired power plants and petroleum refineries. To the extent we or our customers are subject to any of these regulations, we may face increased costs and decreased demand for our product.

The adoption of legislation or regulatory programs to reduce emissions of greenhouse gases could require us to incur increased operating costs, such as costs to purchase and operate emissions control systems, to

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acquire emissions allowances or comply with new regulatory or reporting requirements. Any such legislation or regulatory programs could also increase the cost of consuming, and thereby reduce demand for, the oil and natural gas we produced. Consequently, legislation and regulatory programs to reduce emissions of greenhouse gases could have an adverse effect on our business, financial condition and results of operations.

The recent adoption of derivatives legislation by the United States Congress could have an adverse effect on our ability to use derivative instruments to reduce the effect of commodity price, interest rate and other risks associated with our business.

The United States Congress adopted comprehensive financial reform legislation that establishes federal oversight and regulation of the over-the-counter derivatives market and entities, such as us, that participate in that market. The new legislation, known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”), was signed into law by the President on July 21, 2010 and requires the Commodities Futures Trading Commission (the “CFTC”) and the SEC to promulgate rules and regulations implementing the new legislation within 360 days from the date of enactment. In its rulemaking under the Act, the CFTC has proposed regulations to set position limits for certain futures and option contracts in the major energy markets and for swaps that are their economic equivalents. Certain bona fide hedging transactions or positions would be exempt from these position limits. It is not possible at this time to predict when the CFTC will finalize these regulations. The financial reform legislation may also require us to comply with margin requirements and with certain clearing and trade-execution requirements in connection with our derivative activities, although the application of those provisions to us is uncertain at this time. The financial reform legislation may also require the counterparties to our derivative instruments to spin off some of their derivatives activities to a separate entity, which may not be as creditworthy as the current counterparty. The new legislation and any new regulations could significantly increase the cost of derivative contracts (including through requirements to post collateral which could adversely affect our available liquidity), materially alter the terms of derivative contracts, reduce the availability of derivatives to protect against risks that we encounter, reduce our ability to monetize or restructure our existing derivative contracts, and increase our exposure to less creditworthy counterparties. If we reduce our use of derivatives as a result of the legislation and regulations, our results of operations may become more volatile and our cash flows may be less predictable, which could adversely affect our ability to plan for and fund capital expenditures. Finally, the legislation was intended, in part, to reduce the volatility of oil and natural gas prices, which some legislators attributed to speculative trading in derivatives and commodity instruments related to oil and natural gas. Our revenues could therefore be adversely affected if a consequence of the legislation and regulations is to lower commodity prices. Any of these consequences could have a material, adverse effect on us, our financial condition, and our results of operations.

Certain federal income tax deductions currently available with respect to oil and natural gas exploration and development may be eliminated as a result of proposed legislation.

Legislation has been proposed that would, if enacted into law, make significant changes to U.S. federal income tax laws, including the elimination of certain key U.S. federal income tax incentives currently available to oil and natural gas exploration and production companies. These changes include, but are not limited to, (i) the repeal of the percentage depletion allowance for oil and natural gas properties, (ii) the elimination of current deductions for intangible drilling and development costs, (iii) the elimination of the deduction for certain domestic production activities, and (iv) an extension of the amortization period for certain geological and geophysical expenditures. It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could become effective. The passage of this legislation or any other similar changes in U.S. federal income tax laws could eliminate or postpone certain tax deductions that are currently available with respect to oil and natural gas exploration and development, and any such change could negatively impact the value of an investment in our common stock.

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Risks Related to Potential Impairments

Our financial results could be adversely affected by goodwill impairments.

As a result of mergers, acquisitions and dispositions, at December 31, 2010 we had $211.9 million of goodwill on our balance sheet. Goodwill is not amortized, but instead must be tested at least annually for impairment by applying a fair-value-based test. Goodwill is deemed impaired to the extent that its carrying amount exceeds the fair value of the reporting unit. Although our latest tests indicate that no goodwill impairment is currently required, future deterioration in market conditions could lead to goodwill impairments that could have a substantial negative effect on our profitability.

Lower oil and gas prices and other factors may result in ceiling test write-downs or other impairments.

We capitalize the costs to acquire, find and develop our oil and gas properties under the full cost accounting method. The net capitalized costs of our oil and gas properties may not exceed the present value of estimated future net cash flows from proved reserves, plus the lower of cost or fair market value for unproved properties. This quarterly test is called a “ceiling test.” If net capitalized costs of our oil and gas properties exceed this ceiling test, we must charge the amount of the excess to earnings. Although a ceiling test write-down does not impact cash flow from operating activities, it does reduce net income and our shareholders’ equity. Once recorded, a ceiling test write-down is not reversible at a later date even if oil and gas prices increase.

The risk that we will be required to further write down the carrying value of our oil and gas properties increases when oil and gas prices are low or volatile. In addition, write-downs may occur if we experience substantial downward adjustments to our estimated proved reserves or our unproved property values, or if estimated future development costs increase. We may experience further ceiling test write-downs or other impairments in the future. In addition, any future ceiling test cushion would be subject to fluctuation as a result of acquisition or divestiture activity.

Risks Related to Our Common Stock

An active liquid trading market for our common stock may not be maintained and the trading price of our common stock may be volatile.

Liquid and active trading markets usually result in less price volatility and more efficiency in carrying out stockholders’ purchase and sale orders. Smaller capitalized companies like ours often experience substantial fluctuations in the trading price of their securities. An active and liquid trading market for our common stock may not be maintained. In 2010, we undertook a one-for-seven share consolidation which significantly reduced the number of shares outstanding and eligible for trading. The trading price of our common stock has fluctuated significantly and may be subject to similar fluctuations in the future. The market price of our common stock could vary significantly as a result of a number of factors, some of which are beyond our control.

If we, our existing or future stockholders or holders of our securities that are convertible into shares of our common stock sell a substantial number of shares of our common stock, the market price of our common stock could significantly decline.

The market price of our common stock could decline as a result of sales of a large number of shares of common stock in the public market or the perception that such sales could occur. These sales, or the possibility that these sales may occur, might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

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As of February 28, 2011, we had approximately 24.9 million shares of common stock outstanding. Of those shares, approximately 0.9 million shares were restricted shares subject to vesting within three years. The remainder of these shares are freely tradable.

In addition, 0.3 million shares are issuable upon the exercise of presently outstanding stock options under our employee incentive plans and 0.1 million shares are issuable upon the exercise of presently outstanding options and warrants outside our employee incentive plans. Also, 2.3 million shares are issuable upon the conversion of our 6% Convertible Senior Notes and 5.1 million shares are issuable upon conversion of our Series C Preferred Stock, based upon the conversion price of $8.75 per share, and 3.4 million shares are issuable upon conversion of our 11.5% Convertible Bonds, based on a conversion price of $16.52.

Provisions in our articles of incorporation, bylaws and the Nevada Revised Statutes may discourage a change of control.

Certain provisions of our amended and restated articles of incorporation and amended and restated bylaws and the Nevada Revised Statutes (“NRS”) could delay or make more difficult a change of control transaction or other business combination that may be beneficial to stockholders. These provisions include, but are not limited to, the ability of our board of directors to issue a series of preferred stock, classification of our board of directors into three classes and limiting the ability of our stockholders to call a special meeting.

We are subject to the “Combinations With Interested Stockholders Statute” and the “Control Share Acquisition Statute” of the NRS. The Combinations Statute provides that specified persons who, together with affiliates and associates, own, or within three years did own, 10% or more of the outstanding voting stock of a corporation cannot engage in specified business combinations with the corporation for a period of three years after the date on which the person became an interested stockholder, unless the combination or the transaction by which the person first became an interested stockholder is approved by the corporation’s board of directors before the person first became an interested stockholder.

The Control Share Acquisition Statute provides that persons who acquire a “controlling interest” as defined by the statute, in a company may only be given full voting rights in their shares if such rights are conferred by the stockholders of the company at an annual or special meeting. However, any stockholder that does not vote in favor of granting such voting rights is entitled to demand that the company pay fair value for their shares if the acquiring person has acquired at least a majority of all of the voting power of the company. As such, persons acquiring a controlling interest may not be able to vote their shares.

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USE OF PROCEEDS

We expect the net proceeds from this offering to be approximately $ million (or approximately $ million if the underwriters exercise their over-allotment option in full), after deducting estimated fees and expenses (including underwriting discounts and commissions). We intend to use the net proceeds from this offering to repurchase or redeem all $81.25 million of our 6.00% convertible senior notes due 2012. The remaining net proceeds will be used for general corporate purposes.

We recently amended the terms of our 2014 Convertible Bonds to extend the date upon which the holders’ may exercise a put right, as required by the terms of our Senior Term Loan. Please read “Summary — Recent Developments — Amendment of 11.5% Convertible Bonds due 2014.” Following the amendment of our 2014 Convertible Bonds and the application of the net proceeds from this offering to repurchase or redeem all $81.25 million of our 2012 Convertible Notes, our Senior Term Loan will mature on August 16, 2013. Previously, our Senior Term Loan could have become due and payable in full on October 14, 2011.

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CAPITALIZATION

The following table sets forth our capitalization at December 31, 2010:


	•	on an actual basis; and

	•	on an as adjusted basis to give effect to our application of the estimated net proceeds from this offering in the manner described in “Use of Proceeds.”

You should read the following table in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2010, which is incorporated by reference herein.


	As of December 31, 2010
	Actual			As Adjusted
	(Dollars in thousands)

Cash, cash equivalents and restricted cash(1)	$	131,043		$

Long-term debt(2):
6.0% convertible senior notes due 2012	$	81,250		$	—
11.5% convertible bonds due 2014(3)		55,821			55,821
12.0% subordinated notes due 2014		51,132			51,132
15.0% senior term loan due 2013		161,371			161,371

Total long-term debt	$	349,574		$	268,324

Series C convertible preferred stock ($45,000 liquidation preference)(4)	$	53,152		$	53,152
Stockholders’ equity:
Series B preferred stock ($3,273 liquidation preference)	$	—		$	—
Common stock (24,784 shares issued and outstanding, actual; 32,784 shares issued and outstanding, as adjusted)		25
Additional paid-in capital		287,995
Treasury stock, at cost (72 shares, actual and as adjusted)		(587	)		(587	)
Accumulated deficit		(132,815	)

Total stockholders’ equity	$	154,618		$

Total capitalization	$	557,344		$


(1)		Includes $31.8 million of restricted cash.

(2)		Includes approximately $21.6 million of current maturities.

(3)		Pursuant to an amendment we entered into on March 11, 2011, the maturity date of the 11.5% convertible bonds was amended from January 24, 2014 to January 24, 2016.

(4)		Includes approximately $8.2 million of net non-cash premiums under fair value accounting on redemption.

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PRICE RANGE OF COMMON STOCK

Our common stock is quoted on the New York Stock Exchange under the symbol “END” and the London Stock Exchange under the symbol “ENDV.” Prior to March 15, 2011, our common stock was quoted on the NYSE Amex under the symbol “END.”

In October 2010, our Board of Directors authorized a share consolidation of our common stock, in the form of a one-for-seven reverse stock split. This consolidation was effective at the opening of trading on November 18, 2010. As a result of the share consolidation, every seven shares of our common stock outstanding were automatically combined into one share of our common stock. Each shareholder continued to hold the same percentage of our outstanding common shares. The share consolidation was intended to make our common stock available to a broader range of investors and reposition the company’s trading metrics.

All share information and prices per share have been restated to reflect the share consolidation. The following table shows, for the periods indicated, the high and low reported sales prices for our common stock, as reported on the NYSE Amex.


	Sales Price
	High		Low

2009:
First quarter	$	7.21	$	3.22
Second quarter		15.47		5.81
Third quarter		10.50		7.14
Fourth quarter		9.10		5.74
2010:
First quarter	$	10.36	$	5.60
Second quarter		12.18		7.14
Third quarter		10.22		6.72
Fourth quarter		14.16		8.12
2011:
First quarter (through March 14, 2011)	$	14.51	$	11.60

On March 14, 2011, the last sales price of our common stock as reported on the NYSE Amex was $12.60 per share.

As of February 28, 2011, there were approximately 199 holders of record of our common stock.

DIVIDEND POLICY

We have not paid any cash dividends on our common stock to date and have no intention of declaring or paying any cash dividends on our common stock in the foreseeable future. The declaration and payment of dividends is subject to the discretion of our Board of Directors and to certain limitations imposed under Nevada corporate laws and the agreements governing our debt obligations. The timing, amount and form of dividends, if any, will depend on, among other things, our results of operations, financial condition, cash requirements and other factors deemed relevant by our Board of Directors.

Our Series B Preferred Stock is subject to a cumulative 8% dividend. Unless the full amount of the dividends accrued for the Series B Preferred Stock is paid in full, we cannot declare or pay any dividend on our common stock. In addition, certain of our debt facilities contain restrictions on the payment of dividends to the holders of our common stock.

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DESCRIPTION OF CAPITAL STOCK

General

Our amended and restated articles of incorporation authorize us to issue 74,285,714 shares of capital stock, consisting of 64,285,714 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. The following summary description of our capital stock is not complete and does not give effect to applicable statutory and common law. This summary description is also subject to the applicable provisions of our amended and restated articles of incorporation and amended and restated bylaws.

The transfer agent and registrar for our common stock is StockTrans, Inc., and its telephone number is (610) 649-7300.

Common Stock

As of March 11, 2011, there were 25,126,858 shares of our common stock issued and outstanding, including 38,095 shares of unvested restricted common stock pursuant to inducement grants and 816,304 shares of unvested restricted stock awards pursuant to our stock option plans. In addition, as of March 11, 2011, 0.3 million shares are issuable upon the exercise of presently outstanding stock options under our employee incentive plans and 0.1 million shares are issuable upon the exercise of presently outstanding options and warrants outside our employee incentive plans. Also, (i) 2.3 million shares are issuable upon the conversion of our 6% Convertible Senior Notes, (ii) 5.1 million shares are issuable upon conversion of our Series C Preferred Stock, based upon the conversion price of $8.75 per share, and (iii) 3.5 million shares are issuable upon conversion of our 11.5% Convertible Bonds, based on a conversion price of $16.52.

In October 2010, our Board of Directors authorized a share consolidation of our common stock, in the form of a one-for-seven reverse stock split. This consolidation was effective at the opening of trading on November 18, 2010. As a result of the share consolidation, every seven shares of our common stock outstanding were automatically combined into one share of our common stock. Each shareholder continues to hold the same percentage of our outstanding common shares. The shares were rounded up to the next whole share for those holders who would have otherwise received fractional shares. The share consolidation was intended to make our common stock available to a broader range of investors and reposition the company’s trading metrics.

Shares of our common stock are alike and equal in all respects and have one vote for each share held of record for the election of directors and all other matters submitted to the vote of stockholders. Holders of our common stock do not have cumulative voting rights, and thus, holders of a majority of the shares of our common stock represented at a meeting at which a quorum is present can elect all directors to be elected at such meeting. Subject to any restrictions imposed by any of our lenders and after any requirements with respect to preferential dividends, if any, on the preferred stock have been met, then, and not otherwise, dividends payable in cash or in any other medium may be declared by our board of directors and paid on the shares of common stock out of funds legally available therefore. After satisfaction of all our debts and liabilities and distribution in full of the preferential amount, if any, to be distributed to the holders of preferred stock in the event of voluntary or involuntary liquidation, dissolution, distribution of assets or our winding-up, the holders of our common stock shall be entitled to receive all of our remaining assets of whatever kind available for distribution to stockholders ratably in proportion to the number of shares of common stock held by them respectively. The holders of our common stock do not have any preferential, preemptive right, or other right of subscription to acquire any of our shares authorized, issued or sold, or to be authorized, issued or sold (or any instrument convertible into our shares) other than to the extent, if any, our board of directors may determine from time to time.

Preferred Stock

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to a resolution or resolutions providing for such issuance duly adopted by our board of directors and may determine, for any series of preferred stock, the terms and rights of the series, including the following:


	•	the distinctive designation, stated value and number of shares comprising such series, which number may (except where otherwise provided by our board of directors in creating such series) be increased or decreased (but not below the number of shares then outstanding) from time to time by action of our board of directors;

	•	the rate of dividend, if any, on the shares of that series, whether dividends shall be cumulative and, if so, from which date, and the relative rights of priority, if any, of payment of dividends on shares of that series over shares of any other series;

	•	whether the shares of that series shall be redeemable and, if so, the terms and conditions of such redemption, including the date upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates, or the property or rights, including securities of any other corporation, payable in case of redemption;

	•	whether that series shall have a sinking fund for the redemption or purchase of shares of that series and, if so, the terms and amounts payable into such sinking fund;

	•	the rights to which the holders of the shares of that series shall be entitled in the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up and the relative rights of priority, if any, of payment of shares of that series;

	•	whether the shares of that series shall be convertible into or exchangeable for shares of capital stock of any class or any other series of preferred stock and, if so, the terms and conditions of such conversion or exchange including the rate of conversion or exchange, the date upon or after which they shall be convertible or exchangeable, the duration for which they shall be convertible or exchangeable, the event upon or after which they shall be convertible or exchangeable, at whose option they shall be convertible or exchangeable, and the method of adjusting the rate of conversion or exchange in the event of a stock split, stock dividend, combination of shares or similar event;

	•	whether the shares of that series shall have voting rights in addition to the voting rights provided by law and, if so, the terms of such voting rights;

	•	whether the issuance of any additional shares of such series, or of any shares of any other series, shall be subject to restrictions as to issuance, or as to the powers, preferences or rights of any such other series; and

	•	any other preferences, privileges and powers, and relative, participating, optional or other special rights, and qualification, limitation or restriction of such series, as our board of directors may deem advisable and as shall not be inconsistent with the provisions of our amended and restated articles of incorporation and to the full extent now or hereafter permitted by the laws of the State of Nevada.

Because the holders of our preferred stock may be entitled to vote on some matters as a class, issuance of our preferred stock could have the effect of delaying, deferring or preventing a change of control. The rights of the holders of our common stock may be adversely affected by the rights of the holders of preferred stock that may be issued in the future. The issuance of preferred stock, while providing desirable flexibility, could have the effect of making it more difficult for a third party to acquire control of us.

Series B Preferred Stock

Of the 10,000,000 shares of our authorized preferred stock, 376,287 shares are designated as Series B Preferred Stock, par value $0.001 per share. The authorized shares of Series B Preferred Stock were originally 500,000 shares, however, as a result of our repurchase of an aggregate of 123,713 shares of Series B Preferred Stock in connection with our February 2004 restructuring, the authorized shares were reduced from 500,000 to 376,287.

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The Series B Preferred Stock generally provides for the following rights, preferences and obligations:


	•	the shares of Series B Preferred Stock accrue a cumulative dividend of 8% of the $100 original issue price of such shares per annum, which is payable before any dividend or other distribution on shares of our common stock;

	•	in the event of our liquidation, dissolution, or winding up, the shares of Series B Preferred Stock have a liquidation preference of $100 per share (plus all accrued and unpaid dividends thereon) before any payment or distribution to holders of shares of our common stock;

	•	except as otherwise provided by law, holders of shares of Series B Preferred Stock have the right to vote together with the holders of our common stock on all matters presented to holders of our common stock and have one vote per share; and

	•	we also have the right to redeem all or any portion of the Series B Preferred Stock at any time by payment of $100 per share plus all accrued and unpaid dividends due thereon.

As March 11, 2011, there were 19,714 shares of Series B Preferred Stock issued and outstanding.

Series C Preferred Stock

In 2006, we issued the Series C Preferred Stock. Dividends on the Series C Preferred Stock are:


	•	cumulative;

	•	compounded quarterly based on the original issue price;

	•	payable in cash or common stock, at 4.5% or 4.92%, respectively, since November 2009 and at 8.5% or 8.92%, respectively, in prior periods; and

	•	payable to the preferred stock investors prior to payment of any other dividend on any other shares of our capital stock.

The Series C Preferred Stock ranks senior to any of our other existing or future shares of capital stock. Dividends will be paid to the preferred stock investors prior to payment of any other dividend on any other shares of our capital stock. The Series C Preferred Stock also participates on an as-converted basis with respect to any dividends paid on the common stock.

On November 17, 2009, we redeemed 60% of the outstanding shares of 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 of Subordinated Notes.

The redemption and modification of the Series C Preferred Stock required the modified Series C Preferred Stock to be recorded at fair market value at the redemption date. The fair value of the modified Series C Preferred Stock was greater than the carrying value by $11.5 million. This excess of fair value over carrying value was recorded as a non-cash charge to preferred stock dividends and increased the carrying value of the Series C Preferred Stock. As holders convert the Series C Preferred Stock, the $11.5 million non-cash charge will be transferred to equity on a ratio of shares converted to shares of Series C Preferred Stock outstanding.

In addition to the modification of the Series C Preferred Stock, we also recorded an embedded derivative associated with the change in control features of the Series C Preferred Stock of $2.4 million. This embedded derivative was recorded in other liabilities and reduced the premium on the Series C Preferred Stock at the date of issuance. At December 31, 2010 the fair market value of this derivative was an asset of $0.3 million, reflecting a $2.3 million gain during 2010 that was recorded in unrealized gains (losses) on derivatives.

The Series C Preferred Stock is convertible into common stock at any time at the option of the preferred stock investors, at (i) a conversion price of $8.75 (the “Conversion Price”) and (ii) in an amount of common stock equal to the quotient of $1,000 per share divided by the Conversion Price.

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In the November 2009 amendment, we amended terms of the Series C Preferred Stock to reduce the annual dividend rate to 4.5% (from 8.5%), adjust the conversion price to $8.75 per share (from $17.50) and remove certain anti-dilution provisions.

Issuance of dividends in the form of common stock are subject to the following equity conditions (the “Equity Conditions”), which are waivable by two-thirds of the holders of the Series C Preferred Stock: (i) such common stock is listed on the NYSE AMEX, the New York Stock Exchange or the Nasdaq Stock Market, and not subject to any trading suspension; (ii) we are not then subject to any bankruptcy event; and (iii) such common stock will be immediately re-saleable by the holders pursuant to an effective registration statement and otherwise in compliance with all applicable laws. If we have not maintained the effectiveness of the registration statement pursuant to the registration rights section below, then the dividend rate on the Series C Preferred Stock will be increased by the product of 2.5% (if the dividend is paid in cash) or 2.63% (if the dividend is paid in stock) times the number of quarters (or portions thereof) in which the failure occurs or we fail to cure such failure.

After the fourth anniversary of the initial issuance of the Series C Preferred Stock, we may redeem all of the Series C Preferred Stock in exchange for a cash payment to the preferred stock investors of an amount equal to 102% of the sum of $1,000 plus accrued but unpaid dividends (such sum, the “Liquidation Preference”). If we call the Series C Preferred Stock for redemption, the holders thereof will have the right to convert their shares into a newly issued preferred stock identical in all respects to the Series C Preferred Stock except that such newly issued preferred stock will not bear a dividend (the “Alternate Preferred Stock”). We may not redeem the Convertible Preferred Stock if the Equity Conditions are not then satisfied with respect to the common stock into which the Alternate Preferred Stock is convertible.

Upon the tenth anniversary of the initial issuance of the Series C Preferred Stock, we must redeem all of the Series C Preferred Stock for an amount equal to the Liquidation Preference payable by us in cash or common stock at our election. Issuance by us of common stock for such redemption is subject to the Equity Conditions and to the market value of the outstanding shares of common stock immediately prior to such redemption equaling at least $500 million.

In the event of a change of control of Endeavour, we will be required to offer to redeem all of the Series C Preferred Stock for the greater of: (i) the amount equal to which such holder would be entitled to receive had the holder converted such Series C Preferred Stock into common stock; (ii) 115% of the sum of the Liquidation Preference; and (iii) the amount resulting in an internal rate of return to such holder of 15% from the date of issuance of such Series C Preferred Stock through the date that Endeavour pays the redemption price for such shares.

On January 29, 2010, we and the holders of our outstanding Series C Convertible Preferred Stock corrected a technical oversight in the Subscription and Registration Rights Agreement for our Series C Preferred Stock. The amendment aligns the number of common shares reserved for the potential conversion of the Series C Preferred Stock to the terms of the Series C Convertible Preferred Stock after our partial redemption in November 2009. On March 10, 2010, we also amended the Certificate of Designation for the Series C Preferred Stock and the $50 million subordinated notes issued to the holders of the Series C Preferred Stock to make certain technical changes that align certain definitions and provisions relating to potential repurchases of securities by us.

In 2010, a combined 5,000 shares of our Series C Preferred Stock were converted into 0.6 million shares of our common stock.

Anti-Takeover Provisions of our Articles of Incorporation and Bylaws

Our amended and restated articles of incorporation and amended and restated bylaws contain provisions that could delay, discourage or make more difficult a tender offer, proxy contest or other takeover attempt that is opposed by our board of directors but that a stockholder might consider in its best interest. The following is a summary of these provisions.

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Preferred Stock

Although our board of directors has no current intent to do so, it could issue one or more series of preferred stock that could, depending on their terms, impede the completion of a merger, tender offer or other takeover attempt. Any decision by our board of directors to issue such preferred stock will be based on their judgment as to the best interest of Endeavour and its stockholders.

Special Meeting of Stockholders

Our amended and restated bylaws provide that special meetings of our stockholders can only be called by resolution of the board of directors or by the written request of stockholders owning a majority of the issued and outstanding capital stock entitled to vote.

Classified Board of Directors

Our bylaws provide that the members of our board of directors are divided into three classes as nearly equal as possible. Each class is elected for a three-year term. At each annual meeting of stockholders, approximately one-third of the members of the board of directors are elected for a three-year term and the other directors remain in office until their three-year terms expire. Our amended and restated bylaws provide for one to fifteen directors (as determined by resolution of our board of directors). Our amended and restated bylaws also provide that any vacancies may be filled by a majority of the remaining directors, though less than a quorum, or by a sole remaining director, and each director so elected shall hold office until his successor is elected at an annual or special meeting of the stockholders. These provisions may impede a stockholder from gaining control of the board of directors by removing incumbent directors or increasing the number of directors and simultaneously filling the vacancies or newly created directorships with its own nominees.

Notwithstanding the foregoing, our amended and restated bylaws provide that the holders of two-thirds of our outstanding shares of stock entitled to vote may at any time peremptorily terminate the term of office of all or any of the directors by vote at a meeting called for such purpose or by a written statement filed with our secretary or, in his or her absence, with any other officer.

Limitations on Liability and Indemnification of Officers and Directors

Our amended and restated articles of incorporation provide that none of our officers or directors will be personally liable to us or our stockholders for damages for a breach of their fiduciary duties as a director or officer, other than (i) for acts or omissions that involve intentional misconduct, fraud or knowing violation of law or (ii) the unlawful payment of a distribution. In addition, our amended and restated articles of incorporation and amended and restated bylaws provide that we will indemnify our officers and directors and advance related costs and expenses incurred by our officers and directors to the fullest extent permitted by Nevada law. In addition, we also may enter into agreements with any officer or director, and may obtain insurance, indemnifying such officers and directors against certain liabilities incurred by them. Such provisions may have the effect of preventing changes in our management.

Nevada Anti-Takeover Statutes

The Combinations Statute, contained in Sections 78.411 through 78.444 (inclusive) of the NRS, and the Control Share Statute, contained in Sections 78.378 through 78.3793 (inclusive) of the NRS, may have the effect of delaying or making it more difficult to effect a change in control of Endeavour. The Combinations Statute generally prohibits a Nevada corporation with 200 or more stockholders of record from engaging in certain “combinations,” such as a merger or consolidation, with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the combination or the transaction by which the person first became an interested stockholder is approved by the board of directors of the company before the person first became an interested stockholder. The purpose of the

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Combinations Statutes is to ensure that management and stockholders of a Nevada corporation are involved in any potential and material changes to the corporate ownership structure. A “combination” means:


	•	any merger or consolidation;

	•	any sale, lease, exchange, mortgage, pledge, transfer or other disposition of the corporation’s assets having a total market value equal to 10% or more of the total market value of all the assets of the corporation; or 5% or more of the total market value of all outstanding shares of the corporation or representing 10% or more of the earning power of the corporation; or

	•	the issuance or transfer by the corporation of any shares of the corporation that have an aggregate market value equal to 5% or more of the aggregate market value of all the outstanding shares of the corporation to shareholders except under the exercise of warrants or rights to purchase shares offered, or a dividend or distribution paid or made, pro rata to all shareholders of the corporation.

An “interested stockholder” generally means:


	•	a person or group that owns 10% or more of a corporation’s outstanding voting securities; or

	•	an affiliate or associate of the corporation that at any time during the past three years was the owner of 10% or more of the corporation’s then outstanding voting securities, unless the acquisition of the 10% or larger percentage was approved by the board of directors before the acquisition.

If this approval is not obtained, then after the expiration of the three-year period, the business combination may be consummated with the approval of the board of directors or a majority of the voting power held by disinterested stockholders or if the consideration to be paid by the interested stockholder is fair as provided in the statute.

The Control Share Statute governs acquisitions of a controlling interest of certain publicly held corporations. The purpose of the Control Share Statute, like the Combinations Statute, is to statutorily provide management a measure of involvement in connection with potential changes of control. The Control Share Statute will apply to us if we have 200 or more stockholders of record, at least 100 of whom have addresses in Nevada, unless the amended and restated articles of incorporation or amended and restated bylaws in effect on the tenth day after the acquisition of a controlling interest provide otherwise. These provisions provide generally that any person that acquires a “controlling interest” acquires voting rights in the control shares, as defined, only as conferred by the stockholders of the corporation at a special or annual meeting. If control shares are accorded full voting rights and the acquiring person has acquired at least a majority of all of the voting power, any stockholder of record who has not voted in favor of authorizing voting rights for the control shares is entitled to demand payment for the fair value of its shares. A person acquires a “controlling interest” whenever a person acquires shares of a subject corporation that, but for the application of the Control Share Statute, would enable that person to exercise:


	•	one-fifth or more, but less than one-third;

	•	one-third or more, but less than a majority; or

	•	a majority or more, of all of the voting power of the corporation in the election of directors.

Once an acquirer crosses any one of these thresholds, shares that it acquired in the transaction taking it over the threshold and within the 90 days immediately preceding the date when the acquiring person acquired or offered to acquire a controlling interest become “control shares.”

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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES FOR NON-U.S. HOLDERS OF OUR COMMON STOCK

The following is a summary of certain U.S. federal income tax consequences to Non-U.S. holders with respect to the acquisition, ownership and disposition of our common stock. A “Non-U.S. holder” for purposes of this discussion is any beneficial owner of our common stock who acquires such stock for cash pursuant to the terms of this prospectus supplement and who is not:


	•	an individual citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States;

	•	a corporation (including an entity treated as a corporation for U.S. federal income tax purposes) created or organized in the United States or under the laws of the United States, any state thereof, or the District of Columbia;

	•	an estate, the income of which is subject to U.S. federal income tax regardless of its source; or

	•	a trust (i) if a United States court can exercise primary supervision over the administration of the trust and one or more United States persons can control all substantial decisions of the trust, or (ii) that has a valid election in effect under applicable Treasury Regulations to be treated as a United States person.

An individual may generally be treated as a resident of the United States in any calendar year for U.S. federal income tax purposes, by, among other ways, being present in the United States for at least 31 days in that calendar year and for an aggregate of at least 183 days during a three-year period ending in the current calendar year. For purposes of the 183-day calculation, all of the days present in the current year, one-third of the days present in the immediately preceding year and one-sixth of the days present in the second preceding year are counted. Residents are taxed for U.S. federal income tax purposes as if they were U.S. citizens.

This discussion is based on current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), final, temporary and proposed Treasury Regulations, judicial opinions, published positions of the Internal Revenue Service (the “IRS”) and administrative and judicial authorities, all of which are subject to change, possibly with retroactive effect, or are subject to different interpretations. This discussion assumes that a Non-U.S. holder holds our common stock as a capital asset (generally, property held for investment). This discussion does not address all aspects of U.S. federal income taxation (e.g., the alternative minimum tax), any U.S. federal tax laws other than federal income tax laws (e.g., estate or gift tax laws) or any aspects of state, local, or non-U.S. taxation, nor does it consider any specific facts or circumstances that may apply to particular Non-U.S. holders that may be subject to special treatment under the U.S. federal income tax laws, such as (without limitation):


	•	certain U.S. expatriates;

	•	shareholders that hold our common stock as part of a straddle, constructive sale transaction, synthetic security, hedge, conversion transaction or other integrated investment or risk reduction transaction;

	•	shareholders that acquired our common stock through the exercise of employee stock options or otherwise as compensation or through a tax-qualified retirement plan;

	•	shareholders that are partnerships or other pass-through entities or holders of interests therein;

	•	financial institutions;

	•	insurance companies;

	•	tax-exempt entities;

	•	dealers in securities or foreign currency; and

	•	traders in securities that use a mark-to-market method of accounting for U.S. federal income tax purposes.

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If a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holds our common stock, the tax treatment of a partner of the partnership generally will depend upon the status of the partner and the activities of the partnership. If you are a partner of a partnership (including an entity treated as a partnership for U.S. federal income tax purposes) holding our common stock, you should consult your tax advisor.

THIS DISCUSSION DOES NOT CONSTITUTE LEGAL ADVICE TO ANY PROSPECTIVE PURCHASER OF OUR COMMON STOCK. INVESTORS CONSIDERING THE PURCHASE OF OUR COMMON STOCK SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE APPLICATION OF U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AS WELL AS ANY TAX CONSEQUENCES ARISING UNDER U.S. ESTATE AND GIFT TAX LAWS OR UNDER THE LAWS OF ANY STATE, LOCAL OR FOREIGN TAXING JURISDICTION OR UNDER ANY APPLICABLE TAX TREATY.

Dividends

We do not expect to pay any cash distributions on our common stock in the foreseeable future. However, in the event we do make cash distributions, such distributions will be treated as dividends to the extent of our current and accumulated earnings and profits as determined under the Code and will be subject to withholding as discussed below. Any portion of a distribution that exceeds our current and accumulated earnings and profits will first be applied to reduce the Non-U.S. holder’s basis in the common stock and, to the extent such portion exceeds the Non-U.S. holder’s basis, the excess will be treated as gain from the disposition of the common stock, the tax treatment of which is discussed below under “— Gain on Sale or Other Disposition of Common Stock”

Dividends paid to a Non-U.S. holder on our common stock will generally be subject to U.S. withholding tax at a rate of 30% or such lower rate as may be specified by an applicable income tax treaty. A Non-U.S. holder of our common stock that wishes to claim the benefit of an applicable treaty rate for dividends will be required to (i) complete IRS Form W-8BEN (or other applicable form) and certify under penalties of perjury that such holder is not a United States person as defined under the Code and is eligible for treaty benefits, or (ii) if our common stock is held through certain foreign intermediaries, satisfy the relevant certification requirements of applicable Treasury Regulations. A Non-U.S. holder of our common stock that is eligible for a reduced rate of U.S. withholding tax pursuant to an income tax treaty may obtain a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS.

Dividends that are effectively connected with the conduct of a trade or business by the Non-U.S. holder within the United States (and, where a tax treaty so requires, are attributable to a permanent establishment maintained by the Non-U.S. holder in the United States) are not subject to U.S. withholding tax, provided certain certification and disclosure requirements are satisfied (which generally may be met by providing an IRS Form W-8ECI). Instead, such dividends are subject to U.S. federal income tax on a net income basis in the same manner as if the Non-U.S. holder were a United States person as defined under the Code, unless an applicable income tax treaty provides otherwise. Any such effectively connected dividends received by a foreign corporation may be subject to an additional “branch profits tax” at a 30% rate or such lower rate as may be specified by an applicable income tax treaty.

Gain on Sale or Other Disposition of Common Stock

In general, a Non-U.S. holder will not be subject to U.S. federal income tax on any gain realized upon the sale, exchange, redemption, retirement or other taxable disposition of the Non-U.S. holder’s shares of common stock unless:


	•	the gain is effectively connected with a trade or business carried on by the Non-U.S. holder within the United States (and, where an income tax treaty so requires, is attributable to a U.S. permanent establishment maintained by the Non-U.S. holder in the United States);

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	•	the Non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of disposition and certain other conditions are met; or

	•	we are a U.S. real property holding corporation or “USRPHC” for U.S. federal income tax purposes at any time during the shorter of (i) the period during which such Non-U.S. holder holds our stock, or (ii) the five-year period ending on the date such Non-U.S. holder disposes of our stock.

A Non-U.S. holder described in the first bullet point above will be subject to tax on the gain realized from the sale or other disposition under regular graduated U.S. federal income tax rates in the same manner as if it were a United States person (as defined in the Code), and if the Non-U.S. holder is a corporation, it may also be subject to the branch profits tax at a rate of 30% of its effectively connected earnings and profits or at such lower rate as may be specified by an applicable income tax treaty.

An individual Non-U.S. holder described in the second bullet point above will be subject to a flat 30% tax on the gain derived from the sale or other disposition, which may be offset by U.S. source capital losses, even though the individual is not considered a resident of the United States.

Based on the location of the oil and natural gas properties and other real property assets we currently own, we do not believe that we are a USRPHC. This determination could change depending on changes in the values of our oil and natural gas properties and other assets, and future acquisitions and divestitures of those assets. However, even if we are or become a USRPHC, so long as our common stock is considered to be “regularly traded on an established securities market (within the meaning of the Code and applicable Treasury Regulations),” only a Non-U.S. holder who owns or has owned (actually or by applying certain constructive ownership rules) More than 5% of our common stock at any time during the shorter of (i) the five-year period preceding the date of disposition, or (ii) the holder’s holding period will be subject to U.S. federal income tax on the disposition of such common stock by reason of our status as a USRPHC.

Information Reporting and Backup Withholding

We must report annually to the IRS and to a Non-U.S. holder the amount of dividends paid to such holder and any tax withheld with respect to those dividends, regardless of whether withholding is required. Copies of the information returns reporting such dividends and withholding may also be made available to the tax authorities in the country in which the Non-U.S. holder resides under the provisions of an applicable income tax treaty. U.S. backup withholding will be imposed on certain payments to persons that fail to furnish the information required under the U.S. information reporting requirements. A Non-U.S. holder will be exempt from this backup withholding if such holder properly provides a Form W-8BEN (or valid substitute or successor form) certifying that it is not a United States person (as defined in the Code) or otherwise meets documentary evidence requirements for establishing that it is not a United States person or otherwise establishes an exemption. Although a Form W-8BEN or other documentary evidence may eliminate the need for backup withholding, see the discussion under “— Dividends” above relating to whether the general 30% withholding tax applies on dividends paid to a Non-U.S. holder.

The gross proceeds from the disposition of our common stock may be subject to information reporting and backup withholding. If a Non-U.S. holder sells our common stock to or through a U.S. office of a broker, the payment will be subject to both U.S. backup withholding and information reporting unless such holder properly provided a Form W-8BEN certifying under penalties of perjury that it is a Non-U.S. holder (and the payor does not have actual knowledge or reason to know that the holder is a United States person, as defined under the Code) or it otherwise establishes an exemption. If a Non-U.S. holder sells our common stock outside the United States through a non-U.S. office of a non-U.S. broker and the sales proceeds are paid to the Non-U.S. holder outside the United States, then the U.S. backup withholding and information reporting requirements generally will not apply to that payment. However, U.S. information reporting, but not backup withholding, will generally apply to a payment of sales proceeds, even if that payment is made outside the United States, if a Non-U.S. holder sells our common stock through a non-U.S. office of a broker that has certain relationships with the United States unless the broker has documentary evidence in its files that the Non-U.S. holder is not a United States person and certain other conditions are met, or the Non-U.S. holder otherwise establishes an exemption.

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Backup withholding is not an additional tax. Any amount withheld under the backup withholding rules is allowable as a credit against the Non-U.S. holder’s U.S. federal income tax liability, if any, and a refund may be obtained if the amounts withheld exceed such holder’s actual U.S. federal income tax liability and the required information or appropriate claim form is timely provided to the IRS.

Additional Withholding Requirements

Under legislation enacted in March 2010, the relevant withholding agent may be required to withhold 30% of any dividends paid by us and the proceeds of a sale of our common stock paid after December 31, 2012 to (i) a foreign financial institution unless such foreign financial institution (as specifically defined under those rules) agrees to verify, report and disclose its U.S. account holders and meets certain other specified requirements or (ii) a non-financial foreign entity that is the beneficial owner of the payment unless such entity certifies that it does not have any substantial U.S. owners or provides the name, address and taxpayer identification number of each substantial U.S. owner and such entity meets certain other specified requirements.

THE PRECEDING DISCUSSION OF CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES FOR NON-U.S. HOLDERS OF OUR COMMON STOCK IS FOR GENERAL INFORMATION ONLY AND SHOULD NOT BE CONSIDERED TAX ADVICE. EACH PROSPECTIVE INVESTOR SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE PARTICULAR U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX CONSEQUENCES OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF OUR COMMON STOCK, INCLUDING THE CONSEQUENCES OF ANY PROPOSED CHANGE IN APPLICABLE LAWS.

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UNDERWRITING

Citigroup Global Markets Inc. is acting as joint book-running manager of this offering and as representative of the underwriters named below. Subject to the terms and conditions stated in the underwriting agreement dated the date of this prospectus supplement, each underwriter named below has severally agreed to purchase, and we have agreed to sell to that underwriter, the number of shares set forth opposite the underwriter’s name.


Underwriter	Number of Shares

Citigroup Global Markets Inc.
Canaccord Genuity Inc.
C. K. Cooper & Company
Global Hunter Securities, LLC
Rodman & Renshaw, LLC

Total		8,000,000

The underwriting agreement provides that the obligations of the underwriters to purchase the shares included in this offering are subject to approval of legal matters by counsel and to other conditions. The underwriters are obligated to purchase all the shares (other than those covered by the over-allotment option described below) if they purchase any of the shares.

Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus supplement. Any shares sold by the underwriters to securities dealers may be sold at a discount from the initial public offering price not to exceed $ per share. If all the shares are not sold at the initial offering price, the underwriters may change the offering price and the other selling terms.

If the underwriters sell more shares than the total number set forth in the table above, we have granted to the underwriters an option, exercisable for 30 days from the date of this prospectus supplement, to purchase up to 1,200,000 additional shares at the public offering price less the underwriting discount. The underwriters may exercise the option solely for the purpose of covering over-allotments, if any, in connection with this offering. To the extent the option is exercised, each underwriter must purchase a number of additional shares approximately proportionate to that underwriter’s initial purchase commitment. Any shares issued or sold under the option will be issued and sold on the same terms and conditions as the other shares that are the subject of this offering.

We and our officers and directors have agreed that, subject to certain exceptions, for a period of 90 days from the date of this prospectus supplement, we and they will not, without the prior written consent of Citigroup Global Markets Inc., dispose of any shares of common stock or any securities convertible into, or exercisable, or exchangeable for, shares of common stock; or publicly announce an intention to effect any such transaction. Citigroup Global Markets Inc. in its sole discretion may release any of the securities subject to these lock-up agreements at any time without notice.

The shares are listed on the New York Stock Exchange under the symbol “END” and on the London Stock Exchange under the symbol “ENDV.”

The following table shows the underwriting discounts and commissions that we are to pay to the underwriters in connection with this offering. These amounts are shown assuming both no exercise and full exercise of the underwriters’ over-allotment option.


	No Exercise	Full Exercise

Per share	$	$
Total	$	$

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In connection with the offering, the underwriters may purchase and sell shares in the open market. Purchases and sales in the open market may include short sales, purchases to cover short positions, which may include purchases pursuant to the over-allotment option, and stabilizing purchases.


	•	Short sales involve secondary market sales by the underwriters of a greater number of shares than they are required to purchase in the offering.


	•	“Covered” short sales are sales of shares in an amount up to the number of shares represented by the underwriters’ over-allotment option.

	•	“Naked” short sales are sales of shares in an amount in excess of the number of shares represented by the underwriters’ over-allotment option.


	•	Covering transactions involve purchases of shares either pursuant to the over-allotment option or in the open market after the distribution has been completed in order to cover short positions.


	•	To close a naked short position, the underwriters must purchase shares in the open market after the distribution has been completed. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.

	•	To close a covered short position, the underwriters must purchase shares in the open market after the distribution has been completed or must exercise the over-allotment option. In determining the source of shares to close the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option.


	•	Stabilizing transactions involve bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum.

Purchases to cover short positions and stabilizing purchases, as well as other purchases by the underwriters for their own accounts, may have the effect of preventing or retarding a decline in the market price of the shares. They may also cause the price of the shares to be higher than the price that would otherwise exist in the open market in the absence of these transactions. The underwriters may conduct these transactions on the New York Stock Exchange, in the over-the-counter market or otherwise. If the underwriters commence any of these transactions, they may discontinue them at any time.

Certain of the underwriters or their affiliates have performed commercial banking, investment banking and advisory services for us from time to time for which they have received customary fees and reimbursement of expenses. The underwriters or their affiliates may, from time to time, engage in transactions with and perform services for us in the ordinary course of their business for which they may receive customary fees and reimbursement of expenses.

We have agreed to indemnify the underwriters against certain liabilities, including liabilities under the Securities Act, or to contribute to payments the underwriters may be required to make because of any of those liabilities.

Notice to Prospective Investors in the European Economic Area

In relation to each member state of the European Economic Area that has implemented the Prospectus Directive (each, a relevant member state), with effect from and including the date on which the Prospectus Directive is implemented in that relevant member state (the relevant implementation date), an offer of shares described in this prospectus supplement may not be made to the public in that relevant member state prior to the publication of a prospectus in relation to the shares that has been approved by the competent authority in that relevant member state or, where appropriate, approved in another relevant member state and notified to the competent authority in that relevant member state, all in accordance with the Prospectus Directive, except

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that, with effect from and including the relevant implementation date, an offer of securities may be offered to the public in that relevant member state at any time:


	•	to any legal entity that is authorized or regulated to operate in the financial markets or, if not so authorized or regulated, whose corporate purpose is solely to invest in securities;

	•	to any legal entity that has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts;

	•	to fewer than 100 natural or legal persons (other than qualified investors as defined below) subject to obtaining the prior consent of the representative for any such offer; or

	•	in any other circumstances that do not require the publication of a prospectus pursuant to Article 3 of the Prospectus Directive.

Each purchaser of shares described in this prospectus supplement located within a relevant member state will be deemed to have represented, acknowledged and agreed that it is a “qualified investor” within the meaning of Article 2(1)(e) of the Prospectus Directive.

For purposes of this provision, the expression an “offer to the public” in any relevant member state means the communication in any form and by any means of sufficient information on the terms of the offer and the securities to be offered so as to enable an investor to decide to purchase or subscribe the securities, as the expression may be varied in that member state by any measure implementing the Prospectus Directive in that member state, and the expression “Prospectus Directive” means Directive 2003/71/EC and includes any relevant implementing measure in each relevant member state.

The sellers of the shares have not authorized and do not authorize the making of any offer of shares through any financial intermediary on their behalf, other than offers made by the underwriters with a view to the final placement of the shares as contemplated in this prospectus supplement. Accordingly, no purchaser of the shares, other than the underwriters, is authorized to make any further offer of the shares on behalf of the sellers or the underwriters.

Notice to Prospective Investors in the United Kingdom

This prospectus supplement and the accompanying prospectus are only being distributed to, and is only directed at, persons in the United Kingdom that are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive that are also (i) investment professionals falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”) or (ii) high net worth entities, and other persons to whom it may lawfully be communicated, falling within Article 49(2)(a) to (d) of the Order (each such person being referred to as a “relevant person”). This prospectus supplement and its contents are confidential and should not be distributed, published or reproduced (in whole or in part) or disclosed by recipients to any other persons in the United Kingdom. Any person in the United Kingdom that is not a relevant person should not act or rely on this document or any of its contents.

Notice to Prospective Investors in France

Neither this prospectus supplement nor any other offering material relating to the shares described in this prospectus supplement has been submitted to the clearance procedures of the Autorité des Marchés Financiers or of the competent authority of another member state of the European Economic Area and notified to the Autorité des Marchés Financiers. The shares have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France. Neither this prospectus supplement nor any other offering material relating to the shares has been or will be:


	•	released, issued, distributed or caused to be released, issued or distributed to the public in France; or

	•	used in connection with any offer for subscription or sale of the shares to the public in France.

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Such offers, sales and distributions will be made in France only:


	•	to qualified investors (investisseurs qualifiés) and/or to a restricted circle of investors (cercle restreint d’investisseurs), in each case investing for their own account, all as defined in, and in accordance with articles L.411-2, D.411-1, D.411-2, D.734-1, D.744-1, D.754-1 and D.764-1 of the French Code monétaire et financier;

	•	to investment services providers authorized to engage in portfolio management on behalf of third parties; or

	•	in a transaction that, in accordance with article L.411-2-II-1°-or-2°-or 3° of the French Code monétaire et financier and article 211-2 of the General Regulations (Règlement Général) of the Autorité des Marchés Financiers, does not constitute a public offer (appel public à l’épargne).

The shares may be resold directly or indirectly, only in compliance with articles L.411-1, L.411-2, L.412-1 and L.621-8 through L.621-8-3 of the French Code monétaire et financier.

Notice to Prospective Investors in Hong Kong

The shares may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder, or (iii) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap. 32, Laws of Hong Kong) and no advertisement, invitation or document relating to the shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to shares which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) and any rules made thereunder.

Notice to Prospective Investors in Japan

The shares offered in this prospectus supplement have not been registered under the Securities and Exchange Law of Japan. The shares have not been offered or sold and will not be offered or sold, directly or indirectly, in Japan or to or for the account of any resident of Japan, except (i) pursuant to an exemption from the registration requirements of the Securities and Exchange Law and (ii) in compliance with any other applicable requirements of Japanese law.

Notice to Prospective Investors in Singapore

This prospectus supplement has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this prospectus supplement and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the shares may not be circulated or distributed, nor may the shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than (i) to an institutional investor under Section 274 of the Securities and Futures Act, Chapter 289 of Singapore (the “SFA”), (ii) to a relevant person pursuant to Section 275(1), or any person pursuant to Section 275(1A), and in accordance with the conditions specified in Section 275 of the SFA or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA, in each case subject to compliance with conditions set forth in the SFA.

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Where the shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is:


	•	a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

	•	a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor,

shares, debentures and units of shares and debentures of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the shares pursuant to an offer made under Section 275 of the SFA except:


	•	to an institutional investor (for corporations, under Section 274 of the SFA) or to a relevant person defined in Section 275(2) of the SFA, or to any person pursuant to an offer that is made on terms that such shares, debentures and units of shares and debentures of that corporation or such rights and interest in that trust are acquired at a consideration of not less than S$200,000 (or its equivalent in a foreign currency) for each transaction, whether such amount is to be paid for in cash or by exchange of securities or other assets, and further for corporations, in accordance with the conditions specified in Section 275 of the SFA;

	•	where no consideration is or will be given for the transfer; or

	•	where the transfer is by operation of law.

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LEGAL MATTERS

The validity of the common stock offered hereby will be passed upon for us by Woodburn and Wedge, Reno, Nevada, our Nevada counsel. Certain legal matters in connection with the issuance of the common stock will be passed upon by Vinson & Elkins L.L.P., Houston, Texas, as our counsel. Certain legal matters will be passed upon for the underwriters by Baker Botts L.L.P., Houston, Texas.

EXPERTS

The consolidated financial statements of Endeavour International Corporation as of December 31, 2010 and 2009, and for each of the years in the three-year period ended December 31, 2010, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2010 have been incorporated by reference herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. KPMG LLP’s audit report covering the December 31, 2010 financial statements refers to a change in the reserve estimates and related disclosures as a result of adopting new oil and gas reserve estimation and disclosure requirements.

Certain information included or incorporated by reference in this prospectus regarding estimated quantities of oil and gas reserves owned by us is based on estimates of the reserves prepared by or audited by Netherland, Sewell & Associates, Inc., independent petroleum engineers, and all such information has been so incorporated in reliance on the authority of that firm as experts regarding the matters contained in their report.

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GLOSSARY OF OIL AND NATURAL GAS TERMS

“Basin.” A large natural depression on the earth’s surface in which sediments accumulate.

“Bbl.” One stock tank barrel, of 42 U.S. gallons liquid volume, used herein in reference to crude oil, condensate or natural gas liquids.

“BOE.” Barrels of oil equivalent, with 6,000 cubic feet of natural gas being equivalent to one barrel of oil.

“British Thermal Unit.” The heat required to raise the temperature of a one-pound mass of water from 58.5 to 59.5 degrees Fahrenheit.

“Completion.” The process of treating a drilled well followed by the installation of permanent equipment for the production of natural gas or oil, or in the case of a dry hole, the reporting of abandonment to the appropriate agency.

“Developed Reserves.” Reserves of any category that can be expected to be recovered through existing wells with existing equipment and operating methods or for which the cost of required equipment is relatively minor when compared to the cost of a new well.

“Field.” An area consisting of a single reservoir or multiple reservoirs all grouped on, or related to, the same individual geological structural feature or stratigraphic condition. The field name refers to the surface area, although it may refer to both the surface and the underground productive formations.

“Formation.” A layer of rock which has distinct characteristics that differ from nearby rock.

“Horizontal Drilling.” A drilling technique used in certain formations where a well is drilled vertically to a certain depth and then drilled at a right angle within a specified interval.

“MBbl.” One thousand barrels of crude oil, condensate or natural gas liquids.

“MBOE.” One thousand barrels of oil equivalent.

“Mcf.” One thousand cubic feet of natural gas.

“MMBOE.” One million barrels of oil equivalent.

“MMBtu.” One million British thermal units.

“MMcf.” One million cubic feet of natural gas.

“Net acres.” The percentage of total acres an owner has out of a particular number of acres, or a specified tract. An owner who has 50% interest in 100 acres owns 50 net acres.

“Pilot well.” A well drilled to find and produce natural gas or oil reserves not classified as proved, to find a new reservoir in a field previously found to be productive of natural gas or oil in another reservoir or to extend a known reservoir.

“Play.” A term applied to a portion of the exploration and production cycle following the identification by geologists and geophysicists of areas with potential natural gas and oil reserves.

“Producing Well.” A well that is found to be capable of producing hydrocarbons in sufficient quantities such that proceeds from the sale of the production exceed production expenses and taxes.

“Proved Developed Reserves.” Has the meaning given to such term in Release No. 33-8995: Modernization of Oil and Gas Reporting, which defines proved reserves as:

Proved developed reserves are reserves of any category that can be expected to be recovered:

(i) through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well; and

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(ii) through installed extraction equipment and infrastructure operational at the time of the reserve estimate if the extraction is by means not involving a well.

Supplemental definitions from the 2007 Petroleum Resources Management System:

Proved Developed Producing Reserves — Developed Producing Reserves are expected to be recovered from completion intervals that are open and producing at the time of the estimate. Improved recovery reserves are considered producing only after the improved recovery project is in operation.

Proved Developed Non-Producing Reserves — Developed Non-Producing Reserves include shut-in and behind-pipe Reserves.

Shut-in Reserves are expected to be recovered from (1) completion intervals which are open at the time of the estimate but which have not yet started producing, (2) wells which were shut-in for market conditions or pipeline connections, or (3) wells not capable of production for mechanical reasons. Behind-pipe Reserves are expected to be recovered from zones in existing wells which will require additional completion work or future recompletion prior to start of production. In all cases, production can be initiated or restored with relatively low expenditure compared to the cost of drilling a new well.Proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods.

“Proved Reserves.” Has the meaning given to such term in Release No. 33-8995: Modernization of Oil and Gas Reporting, which defines proved reserves as:

Proved reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible — from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations — prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain that it will commence the project within a reasonable time.

(i) The area of the reservoir considered as proved includes:

(A) the area identified by drilling and limited by fluid contacts, if any, and

(B) adjacent undrilled portions of the reservoir that can, with reasonable certainty, be judged to be continuous with it and to contain economically producible oil or natural gas on the basis of available geoscience and engineering data.

(ii) In the absence of data on fluid contacts, proved quantities in a reservoir are limited by the lowest known hydrocarbons (“LKH”) as seen in a well penetration unless geoscience, engineering, or performance data and reliable technology establishes a lower contact with reasonable certainty.

(iii) Where direct observation from well penetrations has defined a highest known oil (“HKO”) elevation and the potential exists for an associated natural gas cap, proved oil reserves may be assigned in the structurally higher portions of the reservoir only if geoscience, engineering, or performance data and reliable technology establish the higher contact with reasonable certainty.

(iv) Reserves which can be produced economically through application of improved recovery techniques (including, but not limited to, fluid injection) are included in the proved classification when:

(A) successful testing by a pilot project in an area of the reservoir with properties no more favorable than in the reservoir as a whole, the operation of an installed program in the reservoir or an analogous reservoir, or other evidence using reliable technology establishes the reasonable certainty of the engineering analysis on which the project or program was based; and

(B) the project has been approved for development by all necessary parties and entities, including governmental entities.

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(v) Existing economic conditions include prices and costs at which economic producibility from a reservoir is to be determined. The price shall be the average price during the 12-month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first-day-of-the-month price for each month within such period, unless prices are defined by contractual arrangements, excluding escalations based upon future conditions.

“Proved Undeveloped Reserves (PUD).” Has the meaning given to such term in Release No. 33-8995: Modernization of Oil and Gas Reporting, which defines proved reserves as:

Proved undeveloped oil and natural gas reserves are reserves of any category that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

(i) Reserves on undrilled acreage shall be limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence using reliable technology exists that establishes reasonable certainty of economic producibility at greater distances.

(ii) Undrilled locations can be classified as having undeveloped reserves only if a development plan has been adopted indicating that they are scheduled to be drilled within five years, unless the specific circumstances, justify a longer time.

“Reserves.” Estimated remaining quantities of oil and natural gas and related substances anticipated to be economically producible as of a given date by application of development prospects to known accumulations.

“Reservoir.” A porous and permeable underground formation containing a natural accumulation of producible natural gas and/or oil that is confined by impermeable rock or water barriers and is separate from other reservoirs.

“Shale.” Fine-grained sedimentary rock composed mostly of consolidated clay or mud. Shale is the most frequently occurring sedimentary rock.

“Undeveloped Acreage.” Acreage owned or leased on which wells can be drilled or completed to a point that would permit the production of commercial quantities of oil and natural gas regardless of whether such acreage contains proved reserves.

“Working Interest.” The right granted to the lessee of a property to explore for and to produce and own oil, gas, or other minerals. The working interest owners bear the exploration, development, and operating costs on either a cash, penalty, or carried basis.

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Prospectus

$500,000,000

Debt Securities
Common Stock
Preferred Stock
Warrants

We may offer and sell the securities listed above from time to time in one or more offerings in one or more classes or series.

The aggregate initial offering price of the securities that we offer will not exceed $500,000,000.

This prospectus provides you with a general description of the securities that may be offered. Each time securities are offered, we will provide a prospectus supplement and attach it to this prospectus. The prospectus supplement will contain more specific information about the offering and the terms of the securities being offered, including any guarantees by our subsidiaries. A prospectus supplement may also add, update or change information contained in this prospectus. This prospectus may not be used to offer or sell securities without a prospectus supplement describing the method and terms of the offering.

We may sell these securities directly or through agents, underwriters or dealers, or through a combination of these methods. See “Plan of Distribution.” The prospectus supplement will list any agents, underwriters or dealers that may be involved and the compensation they will receive. The prospectus supplement will also show you the total amount of money that we will receive from selling the securities being offered, after the expenses of the offering. You should carefully read this prospectus and any accompanying prospectus supplement, together with the documents we incorporate by reference, before you invest in any of our securities.

Investing in any of our securities involves risk. Please read carefully the information included and incorporated by reference in this prospectus and in any applicable prospectus supplement for a discussion of the factors you should consider before deciding to purchase our securities. See “Risk Factors” beginning on page 2 of this prospectus.

Our common stock is listed on the NYSE Amex under the symbol “END” and on the London Stock Exchange under the symbol “ENDV.”

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The date of this prospectus is February 9, 2010

In making your investment decision, you should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized anyone to provide you with any other information. If anyone provides you with different or inconsistent information, you should not rely on it.

You should not assume that the information contained in this prospectus is accurate as of any date other than the date on the front cover of this prospectus. You should not assume that the information contained in the documents incorporated by reference in this prospectus is accurate as of any date other than the respective dates of those documents. Our business, financial condition, results of operations and prospects may have changed since those dates.

Table of Contents


	Page

About This Prospectus		1
The Company		1
Risk Factors		2
Cautionary Statement Concerning Forward-Looking Statements		16
Use of Proceeds		17
Ratio of Earnings to Fixed Charges and Earnings to Fixed Charges and Preference Securities Dividends		18
Description of Debt Securities		19
Description of Capital Stock		29
Description of Warrants		34
Plan of Distribution		35
Legal Matters		37
Experts		37
Where You Can Find More Information		37
Incorporation of Certain Documents by Reference		37

About This Prospectus

This prospectus is a part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, using a “shelf” registration or continuous offering process. Using this process, we may offer any combination of the securities described in this prospectus in one or more offerings with a total initial offering price of up to $500,000,000. In this prospectus (including the documents incorporated by reference), we have summarized material provisions of contracts and other documents, which are included as exhibits to the registration statement. For a complete description of their terms, you should review the full text of the documents.

This prospectus provides you with a general description of the securities we may offer. Each time we use this prospectus to offer securities, we will provide you with a prospectus supplement containing specific information about the terms of the securities being offered. That prospectus supplement may include additional risk factors or other considerations applicable to that offering. A prospectus supplement may also add, update or change information in this prospectus. If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the information in the prospectus supplement. You should read both this prospectus and any prospectus supplement together with the additional information described under the heading “Where You Can Find More Information.”

You should rely only on the information contained in or incorporated by reference in this prospectus or a prospectus supplement. We have not authorized any person to give any information or to make any representations not contained or incorporated by reference in this prospectus. This prospectus is neither an offer to sell nor a solicitation of an offer to buy securities where an offer or solicitation would be unlawful. You should not assume the information in this prospectus or a prospectus supplement is accurate as of any date other than the date on the front of the documents.

Except as otherwise set forth in this prospectus, “the Company,” “we,” “our,” and “us” refer to Endeavour International Corporation and its consolidated subsidiaries.

The Company

We are an international oil and gas exploration and production company focused on the acquisition, exploration, development and production of energy reserves in the North Sea and United States.

Endeavour International Corporation is a Nevada corporation. Our principal executive offices are located at 1001 Fannin Street, Suite 1600, Houston, Texas 77002, and our telephone number is (713) 307-8700. Our website is www.endeavourcorp.com. The information on our website is not part of this prospectus.

Risk Factors

You should carefully consider each of the following risks and all of the information set forth in this prospectus and in the documents we incorporate by reference before deciding to invest in any of our securities. If any of the following risks and uncertainties develop into actual events, our business, financial condition, results of operations or cash flows could be materially adversely affected. In that case, the trading price of our common stock or value of our other securities could decline and you may lose all or part of your investment.

Risks Related to Our Business

The recent worldwide financial and credit crisis could lead to an extended worldwide economic recession and have a material adverse effect on our results of operations and liquidity, which could hinder or prevent us from meeting our future capital needs.

The recent worldwide financial and credit crisis has reduced the availability of liquidity and credit to fund the continuation and expansion of industrial business operations worldwide. The shortage of liquidity and credit combined with recent substantial losses in worldwide equity markets could lead to an extended worldwide economic recession. A recession or slowdown in economic activity would likely reduce worldwide demand for energy and result in lower oil and gas prices, which could materially adversely affect our profitability and results of operations and ability to obtain funding for our projects, including the development of our North Sea discoveries: Rochelle, Columbus and Cygnus.

In addition, we may be unable to obtain adequate funding under our current senior bank facility because (i) our lending counterparties may be unwilling or unable to meet their funding obligations or (ii) our borrowing base under our current senior bank facility is redetermined at least twice per year and was reduced twice in 2009 as a result of lower oil or gas prices, declines in reserves and lending requirements or regulations.

Due to these factors, we cannot be certain that funding will be available if needed, and to the extent required, on acceptable terms or at all. If funding is not available as needed, or is available only on unfavorable terms, we may be unable to meet our obligations as they come due, or we may be unable to implement our capital program, enhance our existing business, complete acquisitions or otherwise take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our production, revenues and results of operations.

Oil and gas prices are volatile, and a decline in oil and gas prices would reduce our revenues, profitability and cash flow and impede our growth.


	•	global supply of oil and gas;

	•	level of consumer product demand;

	•	technological advances affecting oil and gas consumption;

	•	global economic conditions;

	•	price and availability of alternative fuels;

	•	actions of the Organization of Petroleum Exporting Countries and other state-controlled oil companies relating to oil price and production controls;

	•	governmental regulations and taxation;


	•	political conditions in or affecting other oil-producing and gas-producing countries;

	•	weather conditions;

	•	the proximity, capacity, cost and availability of pipelines and other transportation facilities; and

	•	the impact of energy conservation efforts.

Lower oil and gas prices may not only decrease our revenues on a per unit basis, but significant or extended price declines may also reduce the amount of oil and gas that we can produce economically. A reduction in production could result in a shortfall in expected cash flows and require us to reduce capital spending or borrow funds to cover any such shortfall. Any of these factors could negatively impact our ability to replace our production and our future rate of growth.

Our exploration and development activities may not be commercially successful.

Exploration activities involve numerous risks, including the risk that no commercially productive oil or gas reservoirs will be discovered. In addition, the future cost and timing of drilling, completing and producing wells is often uncertain. Furthermore, drilling operations may be curtailed, delayed or canceled as a result of a variety of factors, including:


	•	unexpected drilling conditions;

	•	pressure or irregularities in formations;

	•	equipment failures or accidents;

	•	adverse weather conditions;

	•	compliance with governmental regulations;

	•	unavailability or high cost of drilling rigs, equipment or labor;

	•	lack of co-participant support;

	•	reductions in oil and gas prices; and

	•	limitations in the market for oil and gas.

If any of these factors were to occur with respect to a particular project, we could lose all or a part of our investment in the project, or we could fail to realize the expected benefits from the project, either of which could materially and adversely affect our revenues and profitability.

To maintain and grow our production and cash flow, we must continue to develop and produce existing reserves and discover or acquire new oil and gas reserves to develop and produce.

Our future oil and gas production is highly dependent upon our level of success in finding or acquiring additional reserves. Producing oil and gas reserves are generally characterized by declining production rates that vary depending on reservoir characteristics and other factors. Our reserves will decline unless we acquire properties with proved reserves or conduct successful development and exploration drilling activities. We accomplish this through successful drilling programs and the acquisition of properties. However, we may be unable to find, develop or acquire additional reserves or production at an acceptable cost or at all. If we are unable to find, develop or acquire additional reserves to replace our current and future production, our production rates will decline even if we drill the undeveloped locations that were included in our estimated proved reserves. Our future oil and gas reserves and production, and therefore our cash flow and income, are

dependent on our success in economically finding or acquiring new reserves and efficiently developing our existing reserves.

Our development and exploration operations, including our recent North Sea discoveries, require substantial capital, and we may be unable to obtain needed capital or financing on satisfactory terms, which could lead to a loss of properties and a decline in our oil and gas reserves.

The oil and gas industry is capital intensive. We make and expect to continue to make substantial capital expenditures in our business and operations for the exploration, development, production and acquisition of oil and gas reserves, including expenditures relating to the development of our discoveries in the North Sea and our acreage position in the Haynesville Shale and other U.S. plays. We intend to finance our future capital expenditures primarily with cash flow from operations and borrowings under our revolving credit facility. Our cash flow from operations and access to capital is subject to a number of variables, including:


	•	our proved reserves;

	•	the level of natural gas and crude oil we are able to produce from existing wells;

	•	the prices at which natural gas and crude oil are sold; and

	•	our ability to acquire, locate and produce new reserves.

We may be unable to make attractive acquisitions, and any acquisition we complete is subject to substantial risks that could impact our business.

As part of our growth strategy, we intend to pursue strategic acquisitions of new properties or businesses that expand our current asset base and potentially offer unexploited reserve potential. Our growth strategy following the full development of our existing properties could be impeded if we are unable to acquire additional interests in oil and gas prospects on a profitable basis. Acquisition opportunities in the oil and gas industry are very competitive, which can increase the cost of, or cause us to refrain from, completing acquisitions. The success of any acquisition will depend on a number of factors and involves potential risks, including among other things:


	•	the inability to estimate accurately the costs to develop the interests in oil and gas prospects, the recoverable volumes of reserves, rates of future production and future net cash flows attainable from the reserves;


	•	the assumption of unknown liabilities, losses or costs for which we are not indemnified or for which the indemnity we receive is inadequate;

	•	the validity of assumptions about costs, including synergies;

	•	the impact on our liquidity or financial leverage of using available cash or debt to finance acquisitions;

	•	the diversion of management’s attention from other business concerns; and

	•	an inability to hire, train or retain qualified personnel to manage and operate our growing business and assets.

All of these factors affect whether an acquisition will ultimately generate cash flows sufficient to provide a suitable return on investment. Even though we perform a review of the properties we seek to acquire that we believe is consistent with industry practices, such reviews are often limited in scope. As a result, among other risks, our initial estimates of reserves may be subject to revision following an acquisition, which may materially and adversely impact the desired benefits of the acquisition.

We have recently commenced exploration, production and development operations in the United States, and as a result, our ability to successfully achieve our goals is subject to greater risk and uncertainty.

In 2008, we began to pursue exploration, production and development activities in the United States. Because we have limited production history in this geographic region, we are less able to use past operational results to help predict future results. Our lack of operational experience in the United States may result in our not being able to fully execute our expected drilling programs in this region, and the return on investment from our United States operations may not be as attractive as expected. We cannot assure you that our efforts in the United States will be successful, or if successful will achieve the resource potential levels that we currently anticipate or achieve the anticipated economic returns based on our current financial models.

Our debt level could negatively impact our financial condition, results of operations and business prospects.

As of September 30, 2009, we had $178.2 million in outstanding indebtedness. Our level of indebtedness could have important consequences on our operations, including:


	•	placing restrictions on certain operating activities;

	•	making it more difficult for us to satisfy our obligations under our indentures or the terms of our other debt instruments and increasing the risk that we may default on our debt obligations;

	•	requiring us to dedicate a substantial portion of our cash flow from operating activities to required payments on debt, thereby reducing the availability of cash flow for working capital, capital expenditures and other general business activities;

	•	limiting our ability to obtain additional financing in the future for working capital, capital expenditures, acquisitions and other general business activities;

	•	decreasing our ability to withstand a downturn in our business or the economy generally; and

	•	placing us at a competitive disadvantage against other less leveraged competitors.

We may not have sufficient funds to repay our outstanding debt. If we are unable to repay our debt out of cash on hand, we could attempt to refinance such debt, sell assets or repay such debt with the proceeds from an equity offering. In addition, we cannot assure you that we will be able to generate sufficient cash flow from operating activities to pay the interest on our debt or that future borrowings, equity financings or proceeds from the sale of assets will be available to repay or refinance such debt. Factors that will affect our ability to raise cash through an offering of our capital stock, a refinancing of our debt or a sale of assets include financial market conditions, our market value, our reserve levels and our operating performance at the time of such offering or other financing. We cannot assure you that any such offering, refinancing or sale of assets can

be successfully completed. The inability to repay or refinance our debt, could have a material adverse effect on our operations and negatively impact our capital program.

We will not be the operator of all of the interests we own or acquire, and therefore we may not be in a position to control the timing of development efforts, the associated costs, or the rate of production of the reserves in respect of such interests.


	•	the operator’s expertise and financial resources;

	•	the timing and amount of their capital expenditures;

	•	the rate of production of the reserves;

	•	approval of other participants to drill wells and implement other work programs;

	•	the availability of suitable drilling rigs, drilling equipment, support vessels, production and transportation infrastructure and qualified operating personnel; and

	•	selection of technology.

Variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to increase significantly.

Our Secured Revolving Loan and a Letter of Credit Facility Agreement (together, the “Debt Agreements”) provide for certain borrowings at variable rates of interest and expose us to interest rate risk. If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed would remain the same, and consequently our net income would decrease.

We operate in a highly competitive environment for reviewing prospects, acquiring properties, marketing oil and gas and securing trained personnel. Many of our competitors are major or independent oil and gas companies that have longer operating histories in our areas of operation and employ superior financial resources which allow them to obtain substantially greater technical and personnel resources and which better enable them to acquire and develop the prospects that they have identified. We also actively compete with other companies when acquiring new licenses or oil and gas properties. Our relatively small size could adversely affect our ability to obtain new prospects and opportunities. Specifically, competitors with greater resources than our own have certain advantages that are particularly important in reviewing prospects and purchasing properties. Competitors may be able to evaluate, bid for and purchase a greater number of properties and prospects than our financial or personnel resources permit. Competitors may also be able to pay more for producing oil and gas properties and exploratory prospects than we are able or willing to pay. If we are unable to compete successfully in these areas in the future, our future revenues and growth may be diminished or restricted.

Market conditions or transportation impediments may hinder our access to oil and gas markets or delay our production.

Market conditions, the unavailability of satisfactory oil and gas transportation or the remote location of our drilling operations may hinder our access to oil and gas markets or delay our production. The availability of a ready market for our oil and gas production depends on a number of factors, including the demand for and supply of oil and gas and the proximity of reserves to pipelines or trucking and terminal facilities. In offshore operations, the availability of a ready market depends on the proximity of, and our ability to tie into in some cases, existing production infrastructure or commercially viable terms. We may be required to shut in wells or delay initial production for lack of a market or because of inadequacy or unavailability of pipeline or gathering system capacity. When that occurs, we are unable to realize revenue from those wells until the production can be tied to a gathering system. This can result in considerable delays from the initial discovery of a reservoir to the actual production of the oil and gas and realization of revenues.

We have limited control over the availability or cost of drilling rigs and other equipment and services which are essential to our operations.

We have limited control over the availability and cost of drilling rigs and other services and equipment which are necessary for us to carry out our exploration and development activities. Increased drilling activity periodically results in service cost increases and shortages in drilling rigs, personnel, equipment and supplies in certain areas. Procuring a sufficient number of drilling rigs can be expensive and difficult as the market for such rigs is highly competitive. There is no assurance that we will be able to contract for such services or equipment on a timely basis or that the cost of such services and equipment will remain at a satisfactory or affordable level. Shortages or the high cost of drilling rigs, equipment, supplies or personnel could delay or adversely affect our exploration and development operations, which could have a material adverse effect on business, financial condition or results of operations. We also rely (and expect to rely in the future) on facilities developed and owned by third parties in order to store, process, transmit and sell our oil and gas production. Our plans to develop and sell our oil and gas reserves could be materially and adversely affected by the inability or unwillingness of third parties to provide sufficient transmission, storage or processing facilities to us.

Lower oil and gas prices and other factors resulted in a ceiling test write-down and may in the future result in additional ceiling test write-downs or other impairments.

We capitalize the costs to acquire, find and develop our oil and gas properties under the full cost accounting method. The net capitalized costs of our oil and gas properties may not exceed the present value of estimated future net cash flows from proved reserves, using period-end oil and gas prices and a 10% discount factor, plus the lower of cost or fair market value for unproved properties. If net capitalized costs of our oil and gas properties exceed this limit, we must charge the amount of the excess to earnings. This is called a “ceiling test write-down.” Although a ceiling test write-down does not impact cash flow from operating activities, it does reduce net income and our shareholders’ equity. Once recorded, a ceiling test write-down is not reversible at a later date even if oil and gas prices increase.

We review the net capitalized costs of our properties quarterly, based on prices in effect (excluding the effect of our hedging contracts that are not designated for hedge accounting) as of the end of each quarter or as of the time of reporting our results. The net capitalized costs of oil and gas properties are computed on a country-by-country basis. Therefore, while our properties in one country may be subject to a write-down, our properties in other countries could be unaffected. We also assess investments in unproved properties periodically to determine whether impairment has occurred.

Approximately 47% of our total estimated proved reserves at December 31, 2008 were proved undeveloped reserves.

Recovery of proved undeveloped reserves requires significant capital expenditures and successful drilling operations. The reserve data included in the reserve engineer reports assumes that substantial capital expenditures are required to develop such reserves. Although cost and reserve estimates attributable to our natural gas and crude oil reserves have been prepared in accordance with industry standards, we cannot be sure that the estimated costs are accurate, that development will occur as scheduled or that the results of such development will be as estimated.

The present value of future net cash flows from our proved reserves will not necessarily be the same as the current market value of our estimated oil and gas reserves.

You should not assume that the present value of future net revenues from our proved reserves referred to in this prospectus is the current market value of our estimated oil and gas, crude oil and natural gas liquids reserves. In accordance with the requirements of the SEC, the estimated discounted future net cash flows from our proved reserves are based on prices and costs on the date of the estimate, held flat for the life of the properties. Actual future prices and costs may differ materially from those used in the present value estimate. The present value of future net revenues from our proved reserves as of December 31, 2008 for gas was based on: (i) a Houston Ship Channel spot market price of $5.24 per MMbtu for our United States properties and (ii) National Balancing Point spot market price of $8.70 per MMbtu for our Norwegian and United Kingdom properties. The present value of future net revenues from our proved reserves as of December 31, 2008 for oil was based on: (i) a West Texas Intermediate posted price of $41.00 per barrel for our United States properties and (ii) a Dated Brent posted price of $36.55 per barrel for our Norwegian and United Kingdom properties.

Actual future net cash flows will also be affected by increases or decreases in consumption by oil and gas purchasers and changes in governmental regulations or taxation. The timing of both the production and the incurrence of expenses in connection with the development and production of oil and gas properties affects the timing of actual future net cash flows from proved reserves. In addition, the 10% discount factor, which is required by the SEC to be used in calculating discounted future net cash flows for reporting purposes, is not necessarily the most appropriate discount factor. The effective interest rate at various times and the risks associated with our business or the oil and gas industry in general will affect the accuracy of the 10% discount factor.

Our estimates of proved reserves and related PV-10 and standardized measure of discounted future net cash flows, which are prepared and presented under existing SEC rules, may change materially as a result of new SEC rules that will go into effect for fiscal years ending on or after December 31, 2009.

This prospectus presents estimates of our proved reserves and related PV-10 and standardized measure of discounted future net cash flows as of December 31, 2008, which estimates have been prepared and presented under existing SEC rules. The SEC has adopted new rules that are effective for fiscal years ending on or after December 31, 2009, which will require SEC reporting companies to prepare their reserves estimates using revised reserve definitions and revised pricing based on 12-month unweighted first-day-of-the-month average pricing. The pricing to be utilized for estimates of our gas reserves as of December 31, 2009 will be based on an unweighted average twelve month and is anticipated to be (i) Henry Hub spot price of $3.86 per MMBtu for our United States properties and (ii) National Balancing Point spot market price of $4.96 per MMbtu for our Norwegian and United Kingdom properties. The pricing to be utilized for estimates of our oil reserves as of December 31, 2009 will be based on an unweighted average twelve month and is anticipated to be (i) West

Texas Intermediate posted price of $61.08 per barrel for our United States properties and (ii) Dated Brent posted price of $60.40 per barrel for our United Kingdom properties.

Another impact of the new SEC rules is a general requirement that, subject to limited exceptions, proved undeveloped reserves may only be booked if they relate to wells where development activities commence within five years of the date of booking. This new rule may limit our potential to book additional proved undeveloped reserves as we pursue our drilling program.

The SEC has released only limited interpretive guidance regarding reporting of reserve estimates under the new rules and may not issue further interpretive guidance on the new rules prior to the end of 2009. We have not determined the impact the new rules may have on our estimates of our proved reserves and related PV-10 and standardized measure of discounted future net cash flows as of December 31, 2009 or as of September 30, 2009, but the impact of the new rules on such estimates, and in particular the estimates of proved undeveloped reserves, could be material.

Estimating oil and gas reserves is complex and inherently imprecise. It requires interpretation of the available technical data and making many assumptions about future conditions, including price and other economic factors. In preparing such estimates, projection of production rates, timing of development expenditures and available geological, geophysical, production and engineering data are analyzed. The extent, quality and reliability of these data can vary. This process also requires economic assumptions about matters such as oil and gas prices, drilling and operating expenses, capital expenditures, taxes and availability of funds. If our interpretations or assumptions used in arriving at our reserve estimates prove to be inaccurate, the amount of oil and gas that will ultimately be recovered may differ materially from the estimated quantities and net present value of reserves owned by us.

Actual production could differ significantly from forecasts.

From time to time we provide forecasts of expected quantities of future oil and gas production. These forecasts are based on a number of estimates, including expectations of production decline rates from existing wells and the outcome of future drilling activity. Should these estimates prove inaccurate, actual production could be adversely impacted. Downturns in commodity prices could make certain drilling activities or production uneconomical, which would also adversely impact production. In addition, we may adjust estimates of proved reserves to reflect production history, results of exploration and development, prevailing oil and gas prices and other factors, many of which are beyond our control.

Our financial results could be adversely affected by goodwill impairments.

As a result of mergers, acquisitions and dispositions, at September 30, 2009 we had $221.9 million of goodwill on our balance sheet. Goodwill is not amortized, but instead must be tested at least annually for impairment by applying a fair-value-based test. Goodwill is deemed impaired to the extent that its carrying amount exceeds the fair value of the reporting unit. Although our latest tests indicate that no goodwill impairment is currently required, future deterioration in market conditions could lead to goodwill impairments that could have a substantial negative effect on our profitability.

Our expectations for future drilling activities will be realized over several years, making them susceptible to uncertainties that could materially alter the occurrence or timing.

We have identified drilling locations and prospects for future drilling opportunities, including development, exploratory and other drilling and enhanced recovery activities. These drilling locations and prospects represent a significant part of our future drilling plans. Our ability to drill and develop these locations depends on a number of factors, including the availability of capital, seasonal conditions, third-party operators, regulatory approvals, negotiation of agreements with third parties, commodity prices, costs and drilling results.

Because of these uncertainties, we cannot give any assurance as to the timing of these activities or that they will ultimately result in the realization of proved reserves or meet our expectations for success. As such, our actual drilling and enhanced recovery activities may materially differ from our current expectations, which could have a significant adverse effect on our financial condition and results of operations.

Our use of derivative transactions may limit future revenues from price increases and involves the risk that our counterparties may be unable to satisfy their obligations to us.

Derivative contracts also involve the risk that counterparties, which generally are financial institutions, may be unable to satisfy their obligations to us. If any of our counterparties were to default on its obligations to us under the derivative contracts or seek bankruptcy protection it could have a material adverse effect on our ability to fund our planned activities and could result in a larger percentage of our future production being subject to commodity price changes. In addition, in the current economic environment and tight financial markets, the risk of a counterparty default is heightened and it is possible that fewer counterparties will participate in future derivative transactions, which could result in greater concentration of our exposure to any one counterparty or a larger percentage of our future production being subject to commodity price changes.

A change of control may adversely affect our liquidity and require refinancing of certain debt instruments.

At September 30, 2009, we had $48.5 million outstanding under our Debt Agreements. Upon specified change of control events, each lender under the Debt Agreements may cancel the facility and declare outstanding loans, plus accrued and unpaid interest, outstanding letters of credit and other outstanding fees, if any, due and payable. Additionally we have outstanding $81.25 million of 6.0% convertible senior notes due 2012. Upon specified change of control events, each holder of those notes may require us to purchase all or a portion of the holder’s notes at a price equal to 100% of the principal amount, plus accrued and unpaid interest, if any, up to but excluding the date of purchase, plus in certain circumstances, a makewhole premium.

We also had $48.4 million of 11.5% guaranteed convertible bonds due 2014 outstanding at September 30, 2009, and in November 2009, we issued $50.0 million of 12.0% senior subordinated notes due 2014. If we undergo a change of control, as defined by the respective note agreements, the holders of these bonds also have the right, subject to certain conditions, to redeem the bonds and accrued interest. We cannot assure you we would have sufficient financial resources to purchase the notes for cash or repay the lenders under our Debt Agreements upon the occurrence of a change of control. If a change of control occurs, we may be required to refinance our indebtedness. There can be no assurance that we would be able to refinance our indebtedness or, if a refinancing were to occur, that the refinancing would be on terms favorable to us.

The adoption of derivatives legislation by the U.S. Congress could have an adverse impact on our ability to hedge risks associated with our business.

Several proposals for derivative reform have been developed by committees across both the U.S. House of Representatives and the U.S. Senate. These proposals are focused on expanding Federal regulation surrounding the use of financial derivative instruments, including credit default swaps, commodity derivatives and other over-the-counter derivatives. Among the recommendations included in the proposals are the requirements for centralized clearing or settling of such derivatives as well as the expansion of collateral margin requirements for certain derivative-market participants. Depending on the ultimate form of legislation, our derivatives utilization could be adversely affected with (i) greater administrative burden, (ii) limitations on the form and use of derivatives, and (iii) expanded collateral margin requirements.

Although it is not possible at this time to predict when the U.S. Congress may act on derivatives legislation, any laws or regulations that may be adopted that subject us to additional collateral margin requirements relating to, or additional restrictions on, our trading and commodity positions could have an adverse effect on the cost of our hedging activity.

Our exploratory drilling projects are based in part on seismic data, which cannot ensure the commercial success of the project.

Our decisions to purchase, explore, develop and exploit prospects or properties depend in part on data obtained through geophysical and geological analyses, production data and engineering studies, the results of which are often uncertain. Even when used and properly interpreted, seismic data and visualization techniques only assist geoscientists and geologists in identifying subsurface structures and hydrocarbon indicators. Seismic data do not enable an interpreter to conclusively determine whether hydrocarbons are present or producible economically. In addition, the use of seismic and other advanced technologies may require greater predrilling expenditures than other drilling strategies. Because of these factors, we could incur losses as a result of exploratory drilling expenditures. Poor results from exploration activities could have a material adverse effect on our future cash flows, ability to replace reserves and results of operations.

Our offshore operations involve special risks that could increase our cost of operations and adversely affect our ability to produce oil and gas.

Offshore drilling in the North Sea generally requires more time and more advanced drilling technologies, involving a higher risk of technological failure and usually higher drilling costs. Moreover, offshore projects often lack proximity to the physical and oilfield service infrastructure, necessitating significant capital investment in subsea flow line infrastructure. Subsea tieback production systems require substantial time and the use of advanced and very sophisticated installation equipment supported by remotely operated vehicles. These operations may encounter mechanical difficulties and equipment failures that could result in significant cost overruns. As a result, a significant amount of time and capital must be invested before we can market the associated oil or gas, increasing both the financial and operational risk involved with these operations. Because of the lack and high cost of infrastructure, some offshore reserve discoveries may never be produced economically.

We operate internationally and are subject to political, economic and other uncertainties.

We currently have operations in the United States, United Kingdom and the Netherlands. We may expand our operations to other countries or regions. International operations are subject to political, economic and other uncertainties, including:


	•	the risk of war, acts of terrorism, revolution, border disputes, expropriation, renegotiation or modification of existing contracts, and import, export and transportation regulations and tariffs;

	•	taxation policies, including royalty and tax increases and retroactive tax claims;

	•	exchange controls, currency fluctuations and other uncertainties arising out of foreign government sovereignty over our international operations;

	•	laws and policies of the U.S. affecting foreign trade, taxation and investment; and

	•	the possibility of being subject to the exclusive jurisdiction of foreign courts in connection with legal disputes and the possible inability to subject foreign persons to the jurisdiction of courts in the United States.

The exploration, production and sale of oil and gas are extensively regulated by governmental bodies. Applicable legislation is under constant review for amendment or expansion. These efforts frequently result in an increase in the regulatory burden on companies in our industry and consequently an increase in the cost of doing business and decrease in profitability. Numerous governmental departments and agencies are authorized to, and have, issued rules and regulations imposing additional burdens on the oil and gas industry that often are costly to comply with and carry substantial penalties for failure to comply. Production operations are affected by changing tax and other laws relating to the petroleum industry, by constantly changing administrative regulations and possible interruptions or termination by government authorities.

Our insurance may not protect us against business and operating risks, including an operator of a prospect in which we participate failing to maintain or obtain adequate insurance.

The cost of decommissioning is uncertain.

We expect to incur obligations to abandon and decommission certain structures associated with our producing properties. To date, the industry has little experience of removing oil and gas structures from the North Sea. Few of the structures in the North Sea have been removed. Certain groups have been established to study issues relating to decommissioning and abandonment and how the costs will be borne. Because experience is limited, we cannot precisely predict the costs of any future decommissions for which we might become obligated. If actual decommission or abandonment costs exceed our estimates or reserves to satisfy such obligations, our financial condition, results of operations and prospects could be materially adversely affected.

If we are unable to fulfill commitments under any of our oil and gas interests, we will lose our interest, and our entire investment, in such interest.

We are subject to environmental regulations that can have a significant impact on our operations.

Our operations are subject to a variety of national, state, local and international laws and regulations governing the discharge of materials into the environment or otherwise relating to environmental protection. Failure to comply with these laws and regulations can result in the imposition of substantial fines and penalties as well as potential orders suspending or terminating our rights to operate. Some environmental laws to which we are subject to provide for strict liability for pollution damages, rendering a person liable without regard to negligence or fault on the part of such person. In addition, we may be subject to claims alleging personal injury or property damage as a result of alleged exposure to hazardous substances such as oil and gas related products. Aquatic environments in which we operate are often particularly sensitive to environmental impacts, which may expose us to greater potential liability than that associated with exploration, development and production at many onshore locations.

Changes in environmental laws and regulations occur frequently, and any changes that result in more stringent or costly requirements for oil and gas exploration and production activities could require us, as well as others in our industry, to make significant expenditures to attain and maintain compliance which could have a corresponding material adverse effect on our competitive position, financial condition or results of operations. We cannot provide assurance that we will be able to comply with future laws and regulations to the same extent that we believe we have in the past. Similarly, we cannot always precisely predict the potential impact of environmental laws and regulations which may be adopted in the future, including whether any such laws or regulations would restrict our operations in any area.

Current and future environmental regulations, including restrictions on greenhouse gases due to concerns about climate change, could reduce the demand for our products. Our business, financial condition and results of operations could be materially and adversely affected if this were to occur.

Governmental regulations to which we are subject could expose us to significant fines and/or penalties and our cost of compliance with such regulations could be substantial.

Oil and gas exploration, development and production are subject to various types of regulation by local, state and national agencies. Regulations and laws affecting the oil and gas industry are comprehensive and under constant review for amendment and expansion. These regulations and laws carry substantial penalties for failure to comply. The regulatory burden on the oil and gas industry increases our cost of doing business and, consequently, adversely affects our profitability. In addition, competitive conditions may be substantially affected by various forms of energy legislation and/or regulation considered from time to time by the governments and/or agencies thereof.

We are dependent on our executive officers and need to attract and retain additional qualified personnel.

Certain U.S. federal income tax deductions currently available with respect to oil and gas exploration and development may be eliminated as a result of future legislation.

President Obama’s Proposed Fiscal Year 2010 Budget includes proposed legislation that would, if enacted into law, make significant changes to United States tax laws, including the elimination of certain key U.S. federal income tax incentives currently available to oil and gas exploration and production companies. These changes include, but are not limited to, (i) the repeal of the percentage depletion allowance for oil and gas properties, (ii) the elimination of current deductions for intangible drilling and development costs, (iii) the elimination of the deduction for certain domestic production activities, and (iv) an extension of the amortization period for certain geological and geophysical expenditures. It is unclear whether any such changes will be enacted or how soon any such changes could become effective. The passage of any legislation as a result of these proposals or any other similar changes in U.S. federal income tax laws could eliminate certain tax deductions that are currently available with respect to oil and gas exploration and development, and any such change could negatively affect our financial condition and results of operations.

Federal and state legislation and regulatory initiatives relating to hydraulic fracturing could result in increased costs and additional operating restrictions or delays.

Legislation has been proposed in Congress to amend the federal Safe Drinking Water Act to require the disclosure of chemicals used by the oil and gas industry in the hydraulic fracturing process. Hydraulic fracturing involves the injection of water, sand and chemicals under pressure into rock formations to stimulate oil and natural gas production. Sponsors of bills currently pending before the Senate and House of Representatives have asserted that chemicals used in the fracturing process may be impacting drinking water supplies. The proposed legislation would require the reporting and public disclosure of chemicals used in the fracturing process, which could make it easier for third parties opposing the hydraulic fracturing process to initiate legal proceedings based on allegations that specific chemicals used in the fracturing process are impairing groundwater or causing other damage. In addition, these bills, if adopted, could establish an additional level of regulation at the federal level that could lead to operational delays or increased operating costs and could result in additional regulatory burdens that could make it more difficult to perform hydraulic fracturing and increase our costs of compliance and doing business.

The adoption of climate change legislation or regulations could result in increased operating costs and reduced demand for the oil and gas we produce.

On June 26, 2009, the U.S. House of Representatives approved adoption of the “American Clean Energy and Security Act of 2009,” also known as the “Waxman-Markey cap-and-trade legislation” or ACESA. The purpose of ACESA is to control and reduce emissions of “greenhouse gases,” or “GHGs,” in the United States. GHGs are certain gases, including carbon dioxide and methane, that may be contributing to warming of the Earth’s atmosphere and other climatic changes. ACESA would establish an economy-wide cap on emissions of GHGs in the United States and would require an overall reduction in GHG emissions of 17% (from 2005 levels) by 2020, and by over 80% by 2050. Under ACESA, most sources of GHG emissions would be required to obtain GHG emission “allowances” corresponding to their annual emissions of GHGs. The number of emission allowances issued each year would decline as necessary to meet ACESA’s overall emission reduction goals. As the number of GHG emission allowances declines each year, the cost or value of allowances is expected to escalate significantly. The net effect of ACESA will be to impose increasing costs on the combustion of carbon-based fuels such as oil, refined petroleum products, and gas. The U.S. Senate has begun work on its own legislation for controlling and reducing emissions of GHGs in the United States. If the Senate adopts GHG legislation that is different from ACESA, the Senate legislation would need to be reconciled with ACESA and both chambers would be required to approve identical legislation before it could become law.

On December 7, 2009, the U.S. Environmental Protection Agency, or EPA, announced its official finding that emissions of GHGs in the United States were endangering human health and the environment. This finding ostensibly authorizes EPA to begin regulating emissions of GHGs under existing provisions of the federal Clean Air Act. EPA has already officially proposed a rule for regulation of GHG emissions from motor vehicles, and may soon take steps to begin regulating emissions of GHGs from stationary sources. However,

many potentially regulated entities are expected to challenge EPA’s “endangerment” finding and its regulatory proposals to limit emissions of GHGs, and it may be several years before any such regulations could take effect. President Obama has indicated that his administration prefers the adoption of legislation to control and reduce emissions of GHGs, but that the administration will proceed to regulate emissions of GHGs under the Clean Air Act if Congress fails to adopt appropriate legislation. Although it is not possible at this time to predict whether or when Congress may act on climate change legislation or whether EPA may proceed to develop and implement regulations restricting emissions of GHGs, any laws or regulations that may be adopted to restrict or reduce emissions of GHGs would likely require us to incur increased operating costs, and could have an adverse effect on demand for the oil and gas we produce.

Risks Relating to Our Common Stock

The trading price of our common stock may be volatile.

Smaller capitalized companies like ours often experience substantial fluctuations in the trading price of their securities. The trading price of our common stock has fluctuated significantly and in the future may be subject to similar fluctuations. The trading price may be affected by a number of factors, including those set forth elsewhere herein, as well as our operating results, financial condition, announcements or drilling activities, general conditions in the oil and gas exploration and development industry, and other events or factors, some of which may be unrelated to our performance or prospects or to conditions in the industry as a whole.

There is a limited market for our common stock.

Our common stock is traded on the NYSE Amex and the London Stock Exchange. Historically, there has not been an active trading market for a significant volume of our common stock. We are not certain that an active trading market for our common stock will develop, or if such a market develops, that it will be sustained, which may make it difficult for you to sell your shares of common stock in the future.

If we, our existing stockholders or holders of our securities that are convertible into shares of our common stock sell additional shares of our common stock, the market price of our common stock could significantly decline.

As of December 1, 2009, we had approximately 131.2 million shares of common stock outstanding. Of those shares, approximately 2.9 million shares are restricted shares subject to vesting periods of up to three years. The remainder of these shares is freely tradable.

In addition, approximately 3.4 million shares are issuable upon the exercise of presently outstanding stock options under our employee incentive plans and 0.4 million shares are issuable upon the exercise of presently outstanding options and warrants outside our employee incentive plans. Also 16.2 million shares are issuable upon the conversion of our convertible senior notes due 2012 and 40.0 million shares are issuable upon conversion of our Series C Preferred Stock, based upon the conversion price of $1.25, and 20.9 million shares are issuable upon conversion of our 11.5% convertible bonds, based on a conversion price of $2.36.

Provisions in our articles of incorporation, bylaws and the Nevada Revised Statutes may discourage a change of control.

Certain provisions of our amended and restated articles of incorporation and amended and restated bylaws and the Nevada Revised Statutes, or NRS, could delay or make more difficult a change of control transaction or other business combination that may be beneficial to stockholders. These provisions include, but are not

limited to, the ability of our board of directors to issue a series of preferred stock, classification of our board of directors into three classes and limiting the ability of our stockholders to call a special meeting.

Cautionary Statement Concerning Forward-Looking Statements

Certain matters discussed in this prospectus and the documents we incorporate by reference herein are “forward-looking statements” intended to qualify for the safe harbors from liability established by the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements include statements that express a belief, expectation, or intention, as well as those that are not statements of historical fact, and may include projections and estimates concerning the timing and success of specific projects and our future production, revenues, income and capital spending. Our forward-looking statements are generally accompanied by words such as “estimate”, “project”, “predict”, “believe”, “expect”, “anticipate”, “potential”, “plan”, “goal” or other words that convey the uncertainty of future events or outcomes. We caution you not to rely on them unduly. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties, which may not be exhaustive, relate to, among other matters, the following:


	•	discovery, estimation, development and replacement of oil and gas reserves;

	•	decreases in proved reserves due to technical or economic factors;

	•	drilling of wells and other planned exploitation activities;

	•	timing and amount of future production of oil and gas;

	•	the volatility of oil and gas prices;

	•	availability of drilling and production equipment;

	•	operating costs such as lease operating expenses, administrative costs and other expenses;

	•	our future operating or financial results;

	•	amount, nature and timing of capital expenditures, including future development costs;

	•	cash flow and anticipated liquidity;

	•	availability and terms of capital;


	•	business strategy and the availability of acquisition opportunities; and

	•	factors not known to us at this time.

Any of these factors, or a combination of these factors, could materially affect our future financial condition or results of operations and the ultimate accuracy of the forward-looking statements. The forward-looking statements are not guarantees of our future performance, and our actual results and future developments may differ materially from those projected in the forward-looking statements. In addition, any or all of our forward-looking statements in this prospectus and the documents incorporated by reference therein and herein may turn out to be incorrect. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties, including those mentioned in “Risk Factors” and elsewhere in this prospectus and the documents incorporated by reference herein. Forward-looking statements speak only as of the date they were made. Except as required by law, we undertake no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this prospectus. These cautionary statements qualify all forward-looking statements attributable to us or persons acting on our behalf.

Use of Proceeds

Unless we inform you otherwise in a prospectus supplement, the net proceeds from the sale of the securities offered hereby will be used for general corporate purposes, including repayment or refinancing of debt, acquisitions, working capital, capital expenditures, and repurchases and redemptions of securities. Pending any specific application, we may initially invest funds in short term marketable securities or apply them to the reduction of other short term indebtedness.

Ratio of Earnings to Fixed Charges and
Earnings to Fixed Charges and Preference Securities Dividends

The following table contains our consolidated ratio of earnings to fixed charges and ratio of earnings to fixed charges plus preferred stock dividends for the periods indicated. This information should be read in conjunction with the consolidated financial statements and the accompanying notes incorporated by reference in this prospectus.

Nine Months Ended

September 30,

Year Ended December 31,

2009

2008

2007

2006

2005

2004

Ratio of earnings to fixed charges

)

3.0

)

2.1

)

Ratio of earnings to fixed charges and preference securities dividends

)

2.1

)

1.8

)


(a)		Earnings were insufficient to cover fixed charges by $18.8 million for the nine months ended September 30, 2009 and by $66.0 million, $36.8 million and $22.6 million for the years ended December 31, 2007, 2005 and 2004, respectively. Earnings included non-cash pre-tax charges (income) for impairments of oil and gas properties and unrealized (gains) losses on derivative instruments of $69.1 million for the nine months ended September 30, 2009 and $(39.7) million, $89.12 million, $(33.7) million and $27.1 million for the years ended December 31, 2008, 2007, 2006 and 2005, respectively.

(b)		Earnings were insufficient to cover fixed charges by $26.7 million for the nine months ended September 30, 2009 and by $77.2 million, $37.0 million and $23.0 million for the years ended December 31, 2007, 2005 and 2004, respectively. Earnings included non-cash pre-tax charges (income) for impairments of oil and gas properties and unrealized (gains) losses on derivative instruments of $69.1 million for the nine months ended September 30, 2009 and $(39.7) million, $89.12 million, $(33.7) million and $27.1 million for the years ended December 31, 2008, 2007, 2006 and 2005, respectively.

The ratios were computed by dividing earnings by fixed charges and by fixed charges plus preferred stock dividends, respectively. For this purpose, earnings are defined as pretax earnings from continuing operations before adjustment for minority interest and equity losses in entities with oil and gas properties, plus interest expense, and amortization of debt discount and expense related to indebtedness. Fixed charges are interest expense, including amortization of debt discount and expenses on indebtedness. Preference securities dividends are the amounts of pre-tax earnings that are required to pay the dividends on outstanding preference securities.

Description of Debt Securities

The Debt Securities will be subordinated debt securities. The Debt Securities will be issued under an indenture among us and a trustee to be determined (the “Trustee”).

The Debt Securities may be issued from time to time in one or more series. The particular terms of each series that are offered by a prospectus supplement will be described in the prospectus supplement.

The rights of Endeavour International Corporation and our creditors, including holders of the Debt Securities, to participate in the assets of any subsidiary upon the latter’s liquidation or reorganization, will be subject to the prior claims of the subsidiary’s creditors, except to the extent that we may ourself be a creditor with recognized claims against such subsidiary.

We have summarized selected provisions of the Indenture below. The summary is not complete. The form of Indenture has been filed with the SEC as an exhibit to the registration statement of which this prospectus is a part, and you should read the Indenture for provisions that may be important to you. Capitalized terms used in the summary have the meanings specified in the Indenture.

General

The Indenture provides that Debt Securities in separate series may be issued thereunder from time to time without limitation as to aggregate principal amount. We may specify a maximum aggregate principal amount for the Debt Securities of any series. We will determine the terms and conditions of the Debt Securities, including the maturity, principal and interest, but those terms must be consistent with the Indenture. The Debt Securities will be our unsecured obligations.

The Debt Securities will be subordinated in right of payment to the prior payment in full of all of our Senior Debt (as defined) as described under “— Subordination of Debt Securities” and in the prospectus supplement applicable to any Debt Securities. If the prospectus supplement so indicates, the Debt Securities will be convertible into our common stock.

The applicable prospectus supplement will set forth the price or prices at which the Debt Securities to be issued will be offered for sale and will describe the following terms of such Debt Securities:

(1) the title of the Debt Securities;

(2) the related subordination terms;

(3) any limit on the aggregate principal amount of the Debt Securities;

(4) each date on which the principal of the Debt Securities will be payable;

(5) the interest rate that the Debt Securities will bear and the interest payment dates for the Debt Securities;

(6) each place where payments on the Debt Securities will be payable;

(7) any terms upon which the Debt Securities may be redeemed, in whole or in part, at our option;

(8) any sinking fund or other provisions that would obligate us to redeem or otherwise repurchase the Debt Securities;

(9) the portion of the principal amount, if less than all, of the Debt Securities that will be payable upon declaration of acceleration of the Maturity of the Debt Securities;

(10) whether the Debt Securities are defeasible;

(11) any addition to or change in the Events of Default;

(12) whether the Debt Securities are convertible into our common stock and, if so, the terms and conditions upon which conversion will be effected, including the initial conversion price or conversion rate and any adjustments thereto and the conversion period;

(13) any addition to or change in the covenants in the Indenture applicable to the Debt Securities; and

(14) any other terms of the Debt Securities not inconsistent with the provisions of the Indenture.

Debt Securities, including any Debt Securities that provide for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof (“Original Issue Discount Securities”), may be sold at a substantial discount below their principal amount. Special U.S. federal income tax considerations applicable to Debt Securities sold at an original issue discount may be described in the applicable prospectus supplement. In addition, special U.S. federal income tax or other considerations applicable to any Debt Securities that are denominated in a currency or currency unit other than U.S. dollars may be described in the applicable prospectus supplement.

Subordination of Debt Securities

The indebtedness evidenced by the Debt Securities will, to the extent set forth in the Indenture with respect to each series of Debt Securities, be subordinate in right of payment to the prior payment in full of all of our Senior Debt and it may also be senior in right of payment to all of our Subordinated Debt. The prospectus supplement relating to any Debt Securities will summarize the subordination provisions of the Indenture applicable to that series including:


	•	the applicability and effect of such provisions upon any payment or distribution respecting that series following any liquidation, dissolution or other winding-up, or any assignment for the benefit of creditors or other marshalling of assets or any bankruptcy, insolvency or similar proceedings;

	•	the applicability and effect of such provisions in the event of specified defaults with respect to any Senior Debt, including the circumstances under which and the periods during which we will be prohibited from making payments on the Debt Securities; and

	•	the definition of Senior Debt applicable to the Subordinated Debt Securities of that series and, if the series is issued on a senior subordinated basis, the definition of Subordinated Debt applicable to that series.

The prospectus supplement will also describe as of a recent date the approximate amount of Senior Debt to which the Debt Securities of that series will be subordinated.

The failure to make any payment on any of the Debt Securities by reason of the subordination provisions of the Indenture described in the prospectus supplement will not be construed as preventing the occurrence of an Event of Default with respect to the Debt Securities arising from any such failure to make payment.

The subordination provisions described above will not be applicable to payments in respect of the Debt Securities from a defeasance trust established in connection with any legal defeasance or covenant defeasance of the Debt Securities as described under “— Legal Defeasance and Covenant Defeasance.”

Form, Exchange and Transfer

The Debt Securities of each series will be issuable only in fully registered form, without coupons, and, unless otherwise specified in the applicable prospectus supplement, only in denominations of $1,000 and integral multiples thereof.

At the option of the Holder, subject to the terms of the Indenture and the limitations applicable to Global Securities, Debt Securities of each series will be exchangeable for other Debt Securities of the same series of any authorized denomination and of a like tenor and aggregate principal amount.

Subject to the terms of the Indenture and the limitations applicable to Global Securities, Debt Securities may be presented for exchange as provided above or for registration of transfer (duly endorsed or with the form of transfer endorsed thereon duly executed) at the office of the Security Registrar or at the office of any transfer agent designated by us for such purpose. No service charge will be made for any registration of transfer or exchange of Debt Securities, but we may require payment of a sum sufficient to cover any tax or

other governmental charge payable in that connection. Such transfer or exchange will be effected upon the Security Registrar or such transfer agent, as the case may be, being satisfied with the documents of title and identity of the person making the request. The Security Registrar and any other transfer agent initially designated by us for any Debt Securities will be named in the applicable prospectus supplement. We may at any time designate additional transfer agents or rescind the designation of any transfer agent or approve a change in the office through which any transfer agent acts, except that we will be required to maintain a transfer agent in each Place of Payment for the Debt Securities of each series.

If the Debt Securities of any series (or of any series and specified tenor) are to be redeemed in part, we will not be required to (1) issue, register the transfer of or exchange any Debt Security of that series (or of that series and specified tenor, as the case may be) during a period beginning at the opening of business 15 days before the day of mailing of a notice of redemption of any such Debt Security that may be selected for redemption and ending at the close of business on the day of such mailing or (2) register the transfer of or exchange any Debt Security so selected for redemption, in whole or in part, except the unredeemed portion of any such Debt Security being redeemed in part.

Global Securities

Some or all of the Debt Securities of any series may be represented, in whole or in part, by one or more Global Securities that will have an aggregate principal amount equal to that of the Debt Securities they represent. Each Global Security will be registered in the name of a Depositary or its nominee identified in the applicable prospectus supplement, will be deposited with such Depositary or nominee or its custodian and will bear a legend regarding the restrictions on exchanges and registration of transfer thereof referred to below and any such other matters as may be provided for pursuant to the Indenture.

Notwithstanding any provision of the Indenture or any Debt Security described in this prospectus, no Global Security may be exchanged in whole or in part for Debt Securities registered, and no transfer of a Global Security in whole or in part may be registered, in the name of any Person other than the Depositary for such Global Security or any nominee of such Depositary unless:

(1) the Depositary has notified us that it is unwilling or unable to continue as Depositary for such Global Security or has ceased to be qualified to act as such as required by the Indenture, and in either case we fail to appoint a successor Depositary within 90 days;

(2) an Event of Default with respect to the Debt Securities represented by such Global Security has occurred and is continuing and the Trustee has received a written request from the Depositary to issue certificated Debt Securities;

(3) subject to the rules of the Depositary, we shall have elected to terminate the book-entry system through the Depositary; or

(4) other circumstances exist, in addition to or in lieu of those described above, as may be described in the applicable prospectus supplement.

All certificated Debt Securities issued in exchange for a Global Security or any portion thereof will be registered in such names as the Depositary may direct.

As long as the Depositary, or its nominee, is the registered holder of a Global Security, the Depositary or such nominee, as the case may be, will be considered the sole owner and Holder of such Global Security and the Debt Securities that it represents for all purposes under the Debt Securities and the Indenture. Except in the limited circumstances referred to above, owners of beneficial interests in a Global Security will not be entitled to have such Global Security or any Debt Securities that it represents registered in their names, will not receive or be entitled to receive physical delivery of certificated Debt Securities in exchange for those interests and will not be considered to be the owners or Holders of such Global Security or any Debt Securities that is represents for any purpose under the Debt Securities or the Indenture. All payments on a Global Security will be made to the Depositary or its nominee, as the case may be, as the Holder of the security. The laws of some jurisdictions may require that some purchasers of Debt Securities take physical

delivery of such Debt Securities in certificated form. These laws may impair the ability to transfer beneficial interests in a Global Security.

Ownership of beneficial interests in a Global Security will be limited to institutions that have accounts with the Depositary or its nominee (“participants”) and to persons that may hold beneficial interests through participants. In connection with the issuance of any Global Security, the Depositary will credit, on its book-entry registration and transfer system, the respective principal amounts of Debt Securities represented by the Global Security to the accounts of its participants. Ownership of beneficial interests in a Global Security will be shown only on, and the transfer of those ownership interests will be effected only through, records maintained by the Depositary (with respect to participants’ interests) or any such participant (with respect to interests of Persons held by such participants on their behalf). Payments, transfers, exchanges and other matters relating to beneficial interests in a Global Security may be subject to various policies and procedures adopted by the Depositary from time to time. None of us, the Trustees or the agents of us, or the Trustees will have any responsibility or liability for any aspect of the Depositary’s or any participant’s records relating to, or for payments made on account of, beneficial interests in a Global Security, or for maintaining, supervising or reviewing any records relating to such beneficial interests.

Payment and Paying Agents

Unless otherwise indicated in the applicable prospectus supplement, payment of interest on a Debt Security on any Interest Payment Date will be made to the Person in whose name such Debt Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest.

Unless otherwise indicated in the applicable prospectus supplement, principal of and any premium and interest on the Debt Securities of a particular series will be payable at the office of such Paying Agent or Paying Agents as we may designate for such purpose from time to time, except that at our option payment of any interest on Debt Securities in certificated form may be made by check mailed to the address of the Person entitled thereto as such address appears in the Security Register. Unless otherwise indicated in the applicable prospectus supplement, the corporate trust office of the Trustee under the Indenture in The City of New York will be designated as the sole Paying Agent for payment with respect to Debt Securities of each series. Any other Paying Agents initially designated by us for the Debt Securities of a particular series will be named in the applicable prospectus supplement. We may at any time designate additional Paying Agents or rescind the designation of any Paying Agent or approve a change in the office through which any Paying Agent acts, except that we will be required to maintain a Paying Agent in each Place of Payment for the Debt Securities of a particular series.

All money paid by us to a Paying Agent for the payment of the principal of or any premium or interest on any Debt Security which remains unclaimed at the end of two years after such principal, premium or interest has become due and payable will be repaid to us, and the Holder of such Debt Security thereafter may look only to us for payment.

Consolidation, Merger and Sale of Assets

Unless otherwise specified in the prospectus supplement, we may not consolidate with or merge into, or transfer, lease or otherwise dispose of all or substantially all of our assets to, any Person (a “successor Person”), and may not permit any Person to consolidate with or merge into us, unless:

(1) the successor Person (if not us) is a corporation, partnership, trust or other entity organized and validly existing under the laws of any domestic jurisdiction and assumes our obligations on the Debt Securities and under the Indenture;

(2) immediately before and after giving pro forma effect to the transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, has occurred and is continuing; and

(3) several other conditions, including any additional conditions with respect to any particular Debt Securities specified in the applicable prospectus supplement, are met.

The successor Person (if not us) will be substituted for us under the Indenture with the same effect as if it had been an original party to the Indenture, and, except in the case of a lease, we will be relieved from any further obligations under the Indenture and the Debt Securities.

Events of Default

Unless otherwise specified in the prospectus supplement, each of the following will constitute an Event of Default under the Indenture with respect to Debt Securities of any series:

(1) failure to pay principal of or any premium on any Debt Security of that series when due, whether or not such payment is prohibited by the subordination provisions of the Indenture;

(2) failure to pay any interest on any Debt Securities of that series when due, continued for 30 days, whether or not such payment is prohibited by the subordination provisions of the Indenture;

(3) failure to deposit any sinking fund payment, when due, in respect of any Debt Security of that series, whether or not such deposit is prohibited by the subordination provisions of the Indenture;

(4) failure to perform or comply with the provisions described under “— Consolidation, Merger and Sale of Assets”;

(5) failure to perform any of our other covenants in the Indenture (other than a covenant included in the Indenture solely for the benefit of a series other than that series), continued for 60 days after written notice has been given by the Trustee, or the Holders of at least 25% in principal amount of the Outstanding Debt Securities of that series, as provided in the Indenture;

(6) any Debt of ourself or any Significant Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by its holders because of a default and the total amount of such Debt unpaid or accelerated exceeds $20.0 million;

(7) any judgment or decree for the payment of money in excess of $20.0 million is entered against us or any Significant Subsidiary remains outstanding for a period of 60 consecutive days following entry of such judgment and is not discharged, waived or stayed; and

(8) certain events of bankruptcy, insolvency or reorganization affecting us or any Significant Subsidiary.

If an Event of Default (other than an Event of Default with respect to Endeavour International Corporation described in clause (8) above) with respect to the Debt Securities of any series at the time Outstanding occurs and is continuing, either the Trustee or the Holders of at least 25% in principal amount of the Outstanding Debt Securities of that series by notice as provided in the Indenture may declare the principal amount of the Debt Securities of that series (or, in the case of any Debt Security that is an Original Issue Discount Debt Security, such portion of the principal amount of such Debt Security as may be specified in the terms of such Debt Security) to be due and payable immediately, together with any accrued and unpaid interest thereon. If an Event of Default with respect to Endeavour International Corporation described in clause (8) above with respect to the Debt Securities of any series at the time Outstanding occurs, the principal amount of all the Debt Securities of that series (or, in the case of any such Original Issue Discount Security, such specified amount) will automatically, and without any action by the Trustee or any Holder, become immediately due and payable, together with any accrued and unpaid interest thereon. After any such acceleration and its consequences, but before a judgment or decree based on acceleration, the Holders of a majority in principal amount of the Outstanding Debt Securities of that series may, under certain circumstances, rescind and annul such acceleration if all Events of Default with respect to that series, other than the non-payment of accelerated principal (or other specified amount), have been cured or waived as provided in the Indenture. For information as to waiver of defaults, please read “— Modification and Waiver” below.

Subject to the provisions of the Indenture relating to the duties of the Trustees in case an Event of Default has occurred and is continuing, no Trustee will be under any obligation to exercise any of its rights or powers under the Indenture at the request or direction of any of the Holders, unless such Holders have offered

to such Trustee reasonable security or indemnity. Subject to such provisions for the indemnification of the Trustees, the Holders of a majority in principal amount of the Outstanding Debt Securities of any series will have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Debt Securities of that series.

No Holder of a Debt Security of any series will have any right to institute any proceeding with respect to the Indenture, or for the appointment of a receiver or a trustee, or for any other remedy thereunder, unless:

(1) such Holder has previously given to the Trustee under the Indenture written notice of a continuing Event of Default with respect to the Debt Securities of that series;

(2) the Holders of at least 25% in principal amount of the Outstanding Debt Securities of that series have made written request, and such Holder or Holders have offered reasonable security or indemnity, to the Trustee to institute such proceeding as trustee; and

(3) the Trustee has failed to institute such proceeding, and has not received from the Holders of a majority in principal amount of the Outstanding Debt Securities of that series a direction inconsistent with such request, within 60 days after such notice, request and offer.

However, such limitations do not apply to a suit instituted by a Holder of a Debt Security for the enforcement of payment of the principal of or any premium or interest on such Debt Security on or after the applicable due date specified in such Debt Security or, if applicable, to convert such Debt Security.

We will be required to furnish to the Trustee annually a statement by certain of our officers as to whether or not we, to their knowledge, are in default in the performance or observance of any of the terms, provisions and conditions of the Indenture and, if so, specifying all such known defaults.

Modification and Waiver

We may modify or amend the Indenture without the consent of any holders of the Debt Securities in certain circumstances, including:

(1) to evidence the succession under the Indenture of another Person to us and to provide for its assumption of our obligations to holders of Debt Securities;

(2) to make any changes that would add any additional covenants of us for the benefit of the holders of Debt Securities or that do not adversely affect the rights under the Indenture of the Holders of Debt Securities in any material respect;

(3) to add any additional Events of Default;

(4) to provide for uncertificated notes in addition to or in place of certificated notes;

(5) to secure the Debt Securities;

(6) to establish the form or terms of any series of Debt Securities;

(7) to evidence and provide for the acceptance of appointment under the Indenture of a successor Trustee;

(8) to cure any ambiguity, defect or inconsistency; or

(9) to make any change in the subordination provisions that limits or terminates the benefits applicable to any Holder of Senior Debt.

Other modifications and amendments of an Indenture may be made by us and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Outstanding Debt Securities of

each series affected by such modification or amendment; provided, however, that no such modification or amendment may, without the consent of the Holder of each Outstanding Debt Security affected thereby:

(1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Debt Security;

(2) reduce the principal amount of, or any premium or interest on, any Debt Security;

(3) reduce the amount of principal of an Original Issue Discount Security or any other Debt Security payable upon acceleration of the Maturity thereof;

(4) change the place or currency of payment of principal of, or any premium or interest on, any Debt Security;

(5) impair the right to institute suit for the enforcement of any payment due on or any conversion right with respect to any Debt Security;

(6) modify the subordination provisions, or modify any conversion provisions, in either case in a manner adverse to the Holders of the Debt Securities;

(7) reduce the percentage in principal amount of Outstanding Debt Securities of any series, the consent of whose Holders is required for modification or amendment of the Indenture;

(8) reduce the percentage in principal amount of Outstanding Debt Securities of any series necessary for waiver of compliance with certain provisions of the Indenture or for waiver of certain defaults;

(9) modify such provisions with respect to modification, amendment or waiver; or

(10) following the making of an offer to purchase Debt Securities from any Holder that has been made pursuant to a covenant in the Indenture, modify such covenant in a manner adverse to such Holder.

The Holders of not less than a majority in principal amount of the Outstanding Debt Securities of any series may waive compliance by us with certain restrictive provisions of the Indenture. The Holders of not less than a majority in principal amount of the Outstanding Debt Securities of any series may waive any past default under the Indenture, except a default in the payment of principal, premium or interest and certain covenants and provisions of the Indenture which cannot be amended without the consent of the Holder of each Outstanding Debt Security of such series.

The Indenture provides that in determining whether the Holders of the requisite principal amount of the Outstanding Debt Securities have given or taken any direction, notice, consent, waiver or other action under the Indenture as of any date:

(1) the principal amount of an Original Issue Discount Security that will be deemed to be Outstanding will be the amount of the principal that would be due and payable as of such date upon acceleration of maturity to such date;

(2) if, as of such date, the principal amount payable at the Stated Maturity of a Debt Security is not determinable (for example, because it is based on an index), the principal amount of such Debt Security deemed to be Outstanding as of such date will be an amount determined in the manner prescribed for such Debt Security;

(3) the principal amount of a Debt Security denominated in one or more foreign currencies or currency units that will be deemed to be Outstanding will be the United States-dollar equivalent, determined as of such date in the manner prescribed for such Debt Security, of the principal amount of such Debt Security (or, in the case of a Debt Security described in clause (1) or (2) above, of the amount described in such clause); and

(4) certain Debt Securities, including those owned by us or any of our Affiliates, will not be deemed to be Outstanding.

Except in certain limited circumstances, we will be entitled to set any day as a record date for the purpose of determining the Holders of Outstanding Debt Securities of any series entitled to give or take any direction, notice, consent, waiver or other action under the Indenture, in the manner and subject to the limitations provided in the Indenture. In certain limited circumstances, the Trustee will be entitled to set a record date for action by Holders. If a record date is set for any action to be taken by Holders of a particular series, only persons who are Holders of Outstanding Debt Securities of that series on the record date may take such action. To be effective, such action must be taken by Holders of the requisite principal amount of such Debt Securities within a specified period following the record date. For any particular record date, this period will be 180 days or such other period as may be specified by us (or the Trustee, if it set the record date), and may be shortened or lengthened (but not beyond 180 days) from time to time.

Satisfaction and Discharge

The Indenture will be discharged and will cease to be of further effect as to all outstanding Debt Securities of any series issued thereunder, when:

either:

(1) (a) all outstanding Debt Securities of that series that have been authenticated (except lost, stolen or destroyed Debt Securities that have been replaced or paid and Debt Securities for whose payment money has theretofore been deposited in trust and thereafter repaid to us) have been delivered to the Trustee for cancellation; or

(b) all outstanding Debt Securities of that series that have been not delivered to the Trustee for cancellation have become due and payable or will become due and payable at their Stated Maturity within one year or are to be called for redemption within one year under arrangements satisfactory to the Trustee and in any case we have irrevocably deposited with the Trustee as trust funds money in an amount sufficient, without consideration of any reinvestment of interest, to pay the entire indebtedness of such Debt Securities not delivered to the Trustee for cancellation, for principal, premium, if any, and accrued interest to the Stated Maturity or redemption date;

(2) we have paid or caused to be paid all other sums payable by us under the Indenture with respect to the Debt Securities of that series; and

(3) we have delivered an Officers’ Certificate and an Opinion of Counsel to the Trustee stating that all conditions precedent to satisfaction and discharge of the Indenture with respect to the Debt Securities of that series have been satisfied.

Legal Defeasance and Covenant Defeasance

To the extent indicated in the applicable prospectus supplement, we may elect, at our option at any time, to have our obligations discharged under provisions relating to defeasance and discharge of indebtedness, which we call “legal defeasance,” or relating to defeasance of certain restrictive covenants applied to the Debt Securities of any series, or to any specified part of a series, which we call “covenant defeasance.”

Legal Defeasance

The Indenture provides that, upon our exercise of our option (if any) to have the legal defeasance provisions applied to any series of Debt Securities, we will be discharged from all our obligations, and the provisions of the Indenture relating to subordination will cease to be effective, with respect to such Debt Securities (except for certain obligations to convert, exchange or register the transfer of Debt Securities, to replace stolen, lost or mutilated Debt Securities, to maintain paying agencies and to hold moneys for payment in trust) upon the deposit in trust for the benefit of the Holders of such Debt Securities of money or U.S. Government Obligations, or both, which, through the payment of principal and interest in respect thereof in accordance with their terms, will provide money in an amount sufficient (in the opinion of a nationally recognized firm of independent public accountants) to pay the principal of and any premium and interest on

such Debt Securities on the respective Stated Maturities in accordance with the terms of the Indenture and such Debt Securities. Such defeasance or discharge may occur only if, among other things:

(1) we have delivered to the Trustee an Opinion of Counsel to the effect that we have received from, or there has been published by, the United States Internal Revenue Service a ruling, or there has been a change in tax law, in either case to the effect that Holders of such Debt Securities will not recognize gain or loss for federal income tax purposes as a result of such deposit and legal defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit and legal defeasance were not to occur;

(2) no Event of Default or event that with the passing of time or the giving of notice, or both, shall constitute an Event of Default shall have occurred and be continuing at the time of such deposit or, with respect to any Event of Default described in clause (8) under “— Events of Default,” at any time until 121 days after such deposit;

(3) such deposit and legal defeasance will not result in a breach or violation of, or constitute a default under, any agreement or instrument (other than the Indenture) to which we are a party or by which we are bound;

(4) at the time of such deposit, no default in the payment of all or a portion of principal of (or premium, if any) or interest on any Senior Debt shall have occurred and be continuing, no event of default shall have resulted in the acceleration of any Senior Debt and no other event of default with respect to any Senior Debt shall have occurred and be continuing permitting after notice or the lapse of time, or both, the acceleration thereof; and

(5) we have delivered to the Trustee an Opinion of Counsel to the effect that such deposit shall not cause the Trustee or the trust so created to be subject to the Investment Company Act of 1940.

Covenant Defeasance

The Indenture provides that, upon our exercise of our option (if any) to have the covenant defeasance provisions applied to any Debt Securities, we may fail to comply with certain restrictive covenants (but not with respect to conversion, if applicable), including those that may be described in the applicable prospectus supplement, and the occurrence of certain Events of Default, which are described above in clause (5) (with respect to such restrictive covenants) and clauses (6) and (7) under “Events of Default” and any that may be described in the applicable prospectus supplement, will not be deemed to either be or result in an Event of Default and the provisions of the Indenture relating to subordination will cease to be effective, in each case with respect to such Debt Securities. In order to exercise such option, we must deposit, in trust for the benefit of the Holders of such Debt Securities, money or U.S. Government Obligations, or both, which, through the payment of principal and interest in respect thereof in accordance with their terms, will provide money in an amount sufficient (in the opinion of a nationally recognized firm of independent public accountants) to pay the principal of and any premium and interest on such Debt Securities on the respective Stated Maturities in accordance with the terms of the Indenture and such Debt Securities. Such covenant defeasance may occur only if we have delivered to the Trustee an Opinion of Counsel to the effect that Holders of such Debt Securities will not recognize gain or loss for federal income tax purposes as a result of such deposit and covenant defeasance and will be subject to federal income tax on the same amount, in the same manner and at the same times as would have been the case if such deposit and covenant defeasance were not to occur, and the requirements set forth in clauses (2), (3), (4) and (5) above are satisfied. If we exercise this option with respect to any series of Debt Securities and such Debt Securities were declared due and payable because of the occurrence of any Event of Default, the amount of money and U.S. Government Obligations so deposited in trust would be sufficient to pay amounts due on such Debt Securities at the time of their respective Stated Maturities but may not be sufficient to pay amounts due on such Debt Securities upon any acceleration resulting from such Event of Default. In such case, we would remain liable for such payments.

Notices

Notices to Holders of Debt Securities will be given by mail to the addresses of such Holders as they may appear in the Security Register.

Title

We the Trustee and any agent of us the or the Trustee may treat the Person in whose name a Debt Security is registered as the absolute owner of the Debt Security (whether or not such Debt Security may be overdue) for the purpose of making payment and for all other purposes.

Governing Law

The Indenture and the Debt Securities will be governed by, and construed in accordance with, the law of the State of New York.

The Trustee

We will enter into the Indenture with a Trustee that is qualified to act under the Trust Indenture Act of 1939, as amended, and with any other Trustees chosen by us and appointed in a supplemental indenture for a particular series of Debt Securities. We may maintain a banking relationship in the ordinary course of business with our Trustee and one or more of its affiliates.

Resignation or Removal of Trustee

If the Trustee has or acquires a conflicting interest within the meaning of the Trust Indenture Act, the Trustee must either eliminate its conflicting interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and the Indenture. Any resignation will require the appointment of a successor Trustee under the Indenture in accordance with the terms and conditions of the Indenture.

The Trustee may resign or be removed by us with respect to one or more series of Debt Securities and a successor Trustee may be appointed to act with respect to any such series. The holders of a majority in aggregate principal amount of the Debt Securities of any series may remove the Trustee with respect to the Debt Securities of such series.

Limitations on Trustee if It Is Our Creditor

The Indenture will contain certain limitations on the right of the Trustee, in the event that it becomes our creditor, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise.

Certificates and Opinions to Be Furnished to Trustee

The Indenture will provide that, in addition to other certificates or opinions that may be specifically required by other provisions of the Indenture, every application by us for action by the Trustee must be accompanied by an Officers’ Certificate and an Opinion of Counsel stating that, in the opinion of the signers, all conditions precedent to such action have been complied with by us.

Description of Capital Stock

General

Our amended and restated articles of incorporation authorize us to issue 310,000,000 shares of capital stock, consisting of 300,000,000 shares of common stock, par value $0.001 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. The following summary description of our capital stock is not complete and does not give effect to applicable statutory and common law. This summary description is also subject to the applicable provisions of our amended and restated articles of incorporation and amended and restated bylaws.

The transfer agent and registrar for our common stock is StockTrans, Inc., and its telephone number is (610) 649-7300.

Common Stock

As of December 1, 2009, there were 131,165,229 shares of our common stock issued and outstanding, including 333,333 shares of unvested restricted common stock pursuant to inducement grants and 1,771,740 shares of unvested restricted stock awards pursuant to our stock option plans. In addition, as of December 1, 2009, (a) 40,000,000 shares of common stock were reserved for issuance pursuant to the conversion of our Series C Preferred Stock, (b) 16,185,259 shares of common stock were reserved for issuance pursuant to the conversion of our 6.00% convertible notes due 2012, (c) 33,490,700 shares of common stock were reserved for issuance pursuant to the conversion of our 11.5% convertible bonds due 2014, (d) 20,200,000 shares of common stock were reserved for issuance pursuant to our stock option plans, of which options to purchase 3,447,789 shares at a weighted average exercise price of $2.01 per share had been issued, (e) 90,000 shares of common stock were reserved for issuance pursuant to warrants outside of our stock plans, and (f) 850,000 shares of common stock were reserved for issuance pursuant to inducement grants.

Preferred Stock

Our board of directors has the authority, without stockholder approval, to issue preferred stock in one or more series at such time or times and for such consideration as our board of directors may determine pursuant to a resolution or resolutions providing for such issuance duly adopted by our board of directors and may determine, for any series of preferred stock, the terms and rights of the series, including the following:


	•	the distinctive designation, stated value and number of shares comprising such series, which number may (except where otherwise provided by our board of directors in creating such series) be increased or decreased (but not below the number of shares then outstanding) from time to time by action of our board of directors;


	•	the rate of dividend, if any, on the shares of that series, whether dividends shall be cumulative and, if so, from which date, and the relative rights of priority, if any, of payment of dividends on shares of that series over shares of any other series;

	•	whether the shares of that series shall be redeemable and, if so, the terms and conditions of such redemption, including the date upon or after which they shall be redeemable, and the amount per share payable in case of redemption, which amount may vary under different conditions and at different redemption dates, or the property or rights, including securities of any other corporation, payable in case of redemption;

	•	whether that series shall have a sinking fund for the redemption or purchase of shares of that series and, if so, the terms and amounts payable into such sinking fund;

	•	the rights to which the holders of the shares of that series shall be entitled in the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up and the relative rights of priority, if any, of payment of shares of that series;

	•	whether the shares of that series shall be convertible into or exchangeable for shares of capital stock of any class or any other series of preferred stock and, if so, the terms and conditions of such conversion or exchange including the rate of conversion or exchange, the date upon or after which they shall be convertible or exchangeable, the duration for which they shall be convertible or exchangeable, the event upon or after which they shall be convertible or exchangeable, at whose option they shall be convertible or exchangeable, and the method of adjusting the rate of conversion or exchange in the event of a stock split, stock dividend, combination of shares or similar event;

	•	whether the shares of that series shall have voting rights in addition to the voting rights provided by law and, if so, the terms of such voting rights;

	•	whether the issuance of any additional shares of such series, or of any shares of any other series, shall be subject to restrictions as to issuance, or as to the powers, preferences or rights of any such other series; and

	•	any other preferences, privileges and powers, and relative, participating, optional or other special rights, and qualification, limitation or restriction of such series, as our board of directors may deem advisable and as shall not be inconsistent with the provisions of our amended and restated articles of incorporation and to the full extent now or hereafter permitted by the laws of the State of Nevada.

Series B Preferred Stock

The Series B Preferred Stock generally provides for the following rights, preferences and obligations:


	•	The shares of Series B Preferred Stock accrue a cumulative dividend of 8% of the $100 original issue price of such shares per annum, which is payable before any dividend or other distribution on shares of our common stock.

	•	In the event of our liquidation, dissolution, or winding up, the shares of Series B Preferred Stock have a liquidation preference of $100 per share (plus all accrued and unpaid dividends thereon) before any payment or distribution to holders of shares of our common stock.


	•	Except as otherwise provided by law, holders of shares of Series B Preferred Stock have the right to vote together with the holders of our common stock on all matters presented to holders of our common stock and have one vote per share.

	•	We also have the right to redeem all or any portion of the Series B Preferred Stock at any time by payment of $100 per share plus all accrued and unpaid dividends due thereon.

As of December 1, 2009, there were 19,714 shares of Series B Preferred Stock issued and outstanding.

Series C Preferred Stock

Of the 10,000,000 shares of our authorized preferred stock, 125,000 shares are designated as Series C Preferred Stock, par value $0.001 per share. The Series C Preferred Stock rank senior to any of our other existing or future shares of capital stock.

The Series C Preferred Stock is fully convertible into common stock at any time at the option of the preferred stock investors, at (i) a conversion price of $1.25 (the “Conversion Price”) and (ii) in an amount of common stock equal to the quotient of the liquidation preference of $1,000 per share (the “Liquidation Preference”) divided by the Conversion Price.

Dividends are payable in cash, or common stock if we are unable to pay such dividends in cash, and any dividends will be paid to the preferred stock investors prior to payment of any other dividend on any other shares of our capital stock. We will pay a cumulative dividend on the Series C Preferred Stock equal to 4.5% per annum of the original issue price (compounded quarterly) if paid in cash and 4.722% per annum of the original issue price (compounded quarterly) if paid in stock (the “Original Dividend Rate”). The Series C Preferred Stock also participates on an as-converted basis with respect to any dividends paid on the common stock.

Issuance of dividends in the form of common stock are subject to the following equity conditions (the “Equity Conditions”), which are waivable by two-thirds of the holders of the Series C Preferred Stock: (i) such common stock is listed on the NYSE Amex, the New York Stock Exchange or the Nasdaq Stock Market, and not subject to any trading suspension; (ii) we are not then subject to any bankruptcy event; and (iii) such common stock will be immediately re-saleable by the preferred stock investors pursuant to an effective registration statement and otherwise in compliance with all applicable laws. If we have not maintained the effectiveness of the registration statement pursuant to the registration rights granted to the holders of the Series C Preferred Stock, then the dividend rate on the Series C Preferred Stock will be increased by the product of 2.5% (if the dividend is paid in cash) or 2.63% (if the dividend is paid in stock) times the number of quarters (or portions thereof) in which the failure occurs or we fail to cure such failure.

After November 1, 2010, we may redeem all of the Series C Preferred Stock in exchange for a cash payment to the preferred stock investors of an amount equal to 102% of the sum of the Liquidation Preference plus accrued and unpaid dividends. If we call the Series C Preferred Stock for redemption, the holders thereof will have the right to convert their shares into a newly issued preferred stock identical in all respects to the Series C Preferred Stock, except that such newly issued preferred stock will not bear a dividend (the “Alternate Preferred Stock”). We may not redeem the Series C Preferred Stock if the Equity Conditions are not then satisfied with respect to the common stock into which the Alternate Preferred Stock is convertible.

Upon the tenth anniversary of the initial issuance of the Series C Preferred Stock, we must redeem all of the outstanding Series C Preferred Stock for an amount equal to the Liquidation Preference plus accrued and unpaid dividends payable by us in cash or common stock at our election. Issuance by us of common stock for such redemption is subject to the Equity Conditions and to the market value of the outstanding shares of common stock immediately prior to such redemption equaling at least $500 million.

In the event of a change of control of Endeavour International Corporation, we will be required to offer to redeem all of the Series C Preferred Stock for the greater of: (i) the amount equal to which such holder would be entitled to receive had the holder converted such Series C Preferred Stock into common stock; (ii) 115% of the sum of the Liquidation Preference plus accrued and unpaid dividends; and (iii) the amount resulting in an internal rate of return to such holder of 15% from the date of issuance of such Series C Preferred Stock through the date that Endeavour International Corporation pays the redemption price for such shares.

As of December 1, 2009, there were 50,000 shares of Series C Preferred Stock issued and outstanding.

Anti-Takeover Provisions of our Articles of Incorporation and Bylaws

Preferred Stock

Special Meeting of Stockholders

Classified Board of Directors

Notwithstanding the foregoing, our amended and restated bylaws provide that the holders of two-thirds of our outstanding shares of stock entitled to vote may at any time preemptorily terminate the term of office of all or any of the directors by vote at a meeting called for such purpose or by a written statement filed with our secretary or, in his or her absence, with any other officer.

Limitations on Liability and Indemnification of Officers and Directors

Nevada Anti-Takeover Statutes

effect of delaying or making it more difficult to effect a change in control of Endeavour. The Combinations Statute generally prohibits a Nevada corporation with 200 or more stockholders of record from engaging in certain “combinations,” such as a merger or consolidation, with an “interested stockholder” for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the combination or the transaction by which the person first became an interested stockholder is approved by the board of directors of the company before the person first became an interested stockholder. The purpose of the Combinations Statutes is to ensure that management and stockholders of a Nevada corporation are involved in any potential and material changes to the corporate ownership structure. A “combination” means:


	•	any merger or consolidation;

	•	any sale, lease, exchange, mortgage, pledge, transfer or other disposition of the corporation’s assets having a total market value equal to 10% or more of the total market value of all the assets of the corporation; or 5% or more of the total market value of all outstanding shares of the corporation or representing 10% or more of the earning power of the corporation; or

	•	the issuance or transfer by the corporation of any shares of the corporation that have an aggregate market value equal to 5% or more of the aggregate market value of all the outstanding shares of the corporation to shareholders except under the exercise of warrants or rights to purchase shares offered, or a dividend or distribution paid or made, pro rata to all shareholders of the corporation.

An “interested stockholder” generally means:


	•	a person or group that owns 10% or more of a corporation’s outstanding voting securities; or

	•	an affiliate or associate of the corporation that at any time during the past three years was the owner of 10% or more of the corporation’s then outstanding voting securities, unless the acquisition of the 10% or larger percentage was approved by the board of directors before the acquisition.


	•	one-fifth or more, but less than one-third;

	•	one-third or more, but less than a majority; or

	•	a majority or more, of all of the voting power of the corporation in the election of directors.

Description of Warrants

We may issue warrants for the purchase of our common stock. If we issue warrants, we may do so under one or more warrant agreements between us and a warrant agent that we will name in the prospectus supplement.

The prospectus supplement relating to any warrants being offered will include specific terms relating to the offering. These terms will include some or all of the following:


	•	the title of the warrants;


	•	the number of shares of common stock purchasable upon exercise of the warrants and the price at which such number of shares of common stock may be purchased upon exercise of the warrants;


	•	the exercise price of the warrants;

	•	the aggregate number of warrants offered;

	•	the price or prices at which each warrant will be issued;

	•	the guarantors, if any, who will guarantee such warrants and the methods of determining such guarantors, if any;

	•	the procedures for exercising the warrants;

	•	dates or periods during which the warrants are exercisable; and

	•	the expiration date and any other material terms of the warrants.

Exercise of Warrants

Each warrant will entitle the holder of warrants to purchase for cash the amount of common stock, at the exercise price stated or determinable in the prospectus supplement for the warrants. Warrants may be exercised at any time up to the close of business on the expiration date shown in the prospectus supplement relating to the warrants, unless otherwise specified in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void. Warrants may be exercised as described in the prospectus supplement relating to the warrants. When the warrant holder makes the payment and properly completes and signs the warrant certificate at the corporate trust office of the warrant agent or any other office indicated in the prospectus supplement, we will, as soon as possible, forward the common stock that the warrant holder has purchased. If the warrant holder exercises the warrant for less than all of the warrants represented by the warrant certificate, we will issue a new warrant certificate for the remaining warrants.

Plan of Distribution

We may sell the offered securities in and outside the United States (1) through underwriters or dealers, (2) directly to purchasers, including our affiliates and stockholders, (3) through agents or (4) through a combination of any of these methods. The prospectus supplement will include the following information:


	•	the terms of the offering;

	•	the names of any underwriters or agents;

	•	the name or names of any managing underwriter or underwriters;

	•	the purchase price of the securities;

	•	the estimated net proceeds to us from the sale of the securities;

	•	any delayed delivery arrangements;

	•	any underwriting discounts, commissions and other items constituting underwriters’ compensation;

	•	any discounts or concessions allowed or reallowed or paid to dealers; and

	•	any commissions paid to agents.

Sale Through Underwriters or Dealers

If underwriters are used in the sale, the underwriters will acquire the securities for their own account for resale to the public, either on a firm commitment basis or a best efforts basis. The underwriters may resell the securities from time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale. Underwriters may offer securities to the public either through underwriting syndicates represented by one or more managing underwriters or directly by one or more firms acting as underwriters. Unless we inform you otherwise in the prospectus supplement, the obligations of the underwriters to purchase the securities will be subject to certain conditions. The underwriters may change from time to time any offering price and any discounts or concessions allowed or reallowed or paid to dealers. Any discounts or commissions underwriters or dealers receive from us and any profit on their resale of the securities may be treated as underwriting discounts and commissions under the Securities Act. The aggregate maximum compensation the underwriters will receive in connection with the sale of any securities under this prospectus and the registration statement of which it forms a part will not exceed 8% of the gross proceeds from the sale.

During and after an offering through underwriters, the underwriters may purchase and sell the securities in the open market. These transactions may include overallotment and stabilizing transactions and purchases to cover syndicate short positions created in connection with the offering. The underwriters may also impose a penalty bid, which means that selling concessions allowed to syndicate members or other broker-dealers for the offered securities sold for their account may be reclaimed by the syndicate if the offered securities are repurchased by the syndicate in stabilizing or covering transactions. These activities may stabilize, maintain or otherwise affect the market price of the offered securities, which may be higher than the price that might otherwise prevail in the open market. If commenced, the underwriters may discontinue these activities at any time.

If dealers are used, we will sell the securities to them as principals. The dealers may then resell those securities to the public at varying prices determined by the dealers at the time of resale. We will include in the prospectus supplement the names of the dealers and the terms of the transaction.

Direct Sales and Sales Through Agents

We may sell the securities directly. In this case, no underwriters or agents would be involved. We may also sell the securities through agents designated from time to time. In the prospectus supplement, we will name any agent involved in the offer or sale of the offered securities, and we will describe any commissions

payable to the agent. Unless we inform you otherwise in the prospectus supplement, any agent will agree to use its reasonable best efforts to solicit purchases for the period of its appointment.

We may sell the securities directly to institutional investors or others who may be deemed to be underwriters within the meaning of the Securities Act with respect to any sale of securities. We will describe the terms of any such sales in the prospectus supplement.

Derivative and Other Transactions

We may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with those derivatives, the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives to close out any related open borrowings of stock. We may also loan or pledge securities covered by this prospectus and any applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and any applicable prospectus supplement (or a post-effective amendment).

Remarketing Arrangements

Offered securities may also be offered and sold, if so indicated in the applicable prospectus supplement, in connection with a remarketing upon their purchase, in accordance with a redemption or repayment pursuant to their terms, or otherwise, by one or more remarketing firms, acting as principals for their own accounts or as agents for us. Any remarketing firm will be identified and the terms of its agreements, if any, with us and its compensation will be described in the applicable prospectus supplement. Remarketing firms may be deemed to be underwriters, as that term is defined in the Securities Act, in connection with the securities remarketed.

Delayed Delivery Contracts

If we so indicate in the prospectus supplement, we may authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase securities from us at the public offering price under delayed delivery contracts. These contracts would provide for payment and delivery on a specified date in the future. The contracts would be subject only to those conditions described in the prospectus supplement. The prospectus supplement will describe the commission payable for solicitation of those contracts.

General Information

We may have agreements with the agents, dealers, underwriters and remarketing firms to indemnify them against certain civil liabilities, including liabilities under the Securities Act, or to contribute with respect to payments that the agents, dealers, underwriters or remarketing firms may be required to make. Agents, dealers, underwriters and remarketing firms may be customers of, engage in transactions with, or perform services for us in the ordinary course of their businesses.

Legal Matters

In connection with particular offerings of debt securities, and if stated in the applicable prospectus supplement, the validity of those debt securities may be passed upon for us by Vinson & Elkins L.L.P. Woodburn and Wedge, our Nevada counsel, has passed upon the validity of the common stock, preferred stock and warrants offered hereby.

Experts

The consolidated financial statements of Endeavour International Corporation as of December 31, 2008 and 2007, for each of the years in the three-year period ended December 31, 2008, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2008 have been incorporated by reference herein in reliance upon the reports of KPMG LLP, independent registered public accounting firm, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. KPMG LLP’s report with respect to the consolidated financial statements refers to changes in the Company’s method of accounting and disclosures for fair value measurements and fair value reporting of financial assets and liabilities, and changes in accounting for uncertain tax positions.

Certain information incorporated by reference in this prospectus regarding estimated quantities of oil and gas reserves owned by us is based on estimates of the reserves prepared by or derived from estimates audited by Netherland, Sewell & Associates, Inc., independent petroleum engineers, and all such information has been so incorporated in reliance on the authority of that firm as experts regarding the matters contained in their report.

Where You Can Find More Information

This prospectus, including any documents incorporated herein by reference, constitutes a part of a registration statement on Form S-3 that we filed with the SEC under the Securities Act. This prospectus does not contain all the information set forth in the registration statement. You should refer to the registration statement and its related exhibits and schedules, and the documents incorporated herein by reference, for further information about our company and the securities offered in this prospectus. Statements contained in this prospectus concerning the provisions of any document are not necessarily complete and, in each instance, reference is made to the copy of that document filed as an exhibit to the registration statement or otherwise filed with the SEC, and each such statement is qualified by this reference. The registration statement and its exhibits and schedules, and the documents incorporated herein by reference, are on file at the offices of the SEC and may be inspected without charge.

We file annual, quarterly, and current reports, proxy statements and other information with the SEC. You can read and copy any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You can obtain information about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC also maintains a website that contains information we file electronically with the SEC, which you can access over the Internet at http://www.sec.gov.

Our home page is located at http://www.endeavourcorp.com. Our annual reports on Form 10-K, our quarterly reports on Form 10-Q, current reports on Form 8-K and other filings with the SEC are available free of charge through our web site as soon as reasonably practicable after those reports or filings are electronically filed or furnished to the SEC. Information on our web site or any other web site is not incorporated by reference in this prospectus and does not constitute a part of this prospectus.

Incorporation of Certain Documents by Reference

We are incorporating by reference in this prospectus information we file with the SEC, which means that we are disclosing important information to you by referring you to those documents. The information we incorporate by reference is an important part of this prospectus, and later information that we file with the

SEC automatically will update and supersede this information. We incorporate by reference the documents listed below and any future filings we make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, excluding any information in those documents that is deemed by the rules of the SEC to be furnished not filed, until we close this offering:


	•	our Annual Report on Form 10-K for the year ended December 31, 2008, including information specifically incorporated by reference from our Proxy Statement for our Annual Meeting of Stockholders held on May 29, 2009;

	•	our Quarterly Reports on Form 10-Q for the fiscal quarters ended March 31, 2009, June 30, 2009 and September 30, 2009;


	•	our Current Reports on Form 8-K or Form 8-K/A filed on May 20, 2009, November 23, 2009 and January 11, 2010 (two reports) (excluding any information furnished pursuant to Item 2.02 or Item 7.01 of any such Current Report on Form 8-K); and


	•	the description of our common stock contained in our registration statement on Form 8-A filed on June 10, 2004, as amended by our amended registration statement on Form 8-A/A-1 filed on August 11, 2004, and including any other amendments or reports filed for the purpose of updating such description.

These reports contain important information about us, our financial condition and our results of operations.

All future documents filed pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act (excluding any information furnished pursuant to Item 2.02 or Item 7.01 on any Current Report on Form 8-K) after the date on which the registration statement that includes this prospectus was initially filed with the SEC (including all such documents we may file with the SEC after the date of the initial registration statement and prior to the effectiveness of the registration statement) and until all offerings under this shelf registration statement are terminated shall be deemed to be incorporated in this prospectus by reference and to be a part hereof from the date of filing of such documents. Any statement contained herein, or in a document incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any subsequently filed document that also is or is deemed to be incorporated by reference herein, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.

You may request a copy of these filings, which we will provide to you at no cost, by writing or telephoning us at the following address and telephone number:

Endeavour International Corporation
1001 Fannin Street, Suite 1600
Houston, Texas 77002
(713) 307-8700
Attention: Corporate Secretary


	Page

About This Prospectus Supplement and the Accompanying Prospectus		S-ii
Where You Can Find More Information		S-ii
Cautionary Statement Regarding Forward-Looking Statements		S-iii
Summary		S-1
Risk Factors		S-18
Use of Proceeds		S-31
Capitalization		S-32
Price Range of Common Stock		S-33
Dividend Policy		S-33
Description of Capital Stock		S-34
Certain U.S. Federal Income Tax Consequences for Non-U.S. Holders of Our Common Stock		S-40
Underwriting		S-44
Legal Matters		S-49
Experts		S-49
Glossary of Oil and Natural Gas Terms		G-1