DALLAS, Jul 15, 2008 (BUSINESS WIRE) -- EXCO Resources, Inc. (NYSE:XCO) today announced it has closed an
acquisition of producing oil and natural gas properties, acreage and
other assets in Gregg, Rusk, and Upshur Counties, Texas for
approximately $252 million from private sellers, subject to customary
post-closing purchase price adjustments. EXCO's average working
interest in the properties is approximately 94% with an average net
revenue interest of 72%. EXCO's estimate of net proved reserves
acquired is 109 Bcfe and estimated total net reserves (proved,
probable and possible) exceed 370 Bcfe exclusive of
Bossier/Haynesville shale potential, discussed below, all based on
NYMEX strip pricing at the contract effective date of March 1, 2008.
The assets include producing properties with more than 15 Mmcfe
per day of net production from 83 producing wells and approximately
11,000 gross acres. Also included in the assets is a 50 mile gathering
system with compressors, a dehydration unit and a refrigeration plant.
EXCO estimates that there are more than 500 additional drilling
locations in the Cotton Valley and Travis Peak formations, of which 92
are proved. EXCO will operate the field and estimates a capital budget
of $20 million to drill 9 wells during the remainder of 2008. The
current primary productive formations in the field are the Upper
Cotton Valley, Pettet and Travis Peak. A majority of the acquired
leasehold covers rights to all depths, including the
Bossier/Haynesville shale. In prior years, two vertical wells were
drilled into the Bossier/Haynesville shale on this acreage and logged
pay potential in these horizons. Recent industry activity in the
vicinity of the acquired acreage has confirmed the presence of shale
potential. EXCO plans to drill at least one vertical well in 2008 to
further delineate potential of the Bossier/Haynesville, and EXCO
estimates that there could be more than 100 potential shale locations
across the acquired acreage.
The acquisition of these properties will be financed with a $300
million Senior Unsecured Term Loan due December 15, 2008, at our
unrestricted subsidiary, EXCO Operating Company, LP, formerly known as
EXCO Partners Operating Partnership, LP.
EXCO Resources, Inc. is a public oil and natural gas acquisition,
exploitation, development and production company headquartered in
Dallas, Texas with principal operations in Texas, Louisiana, Oklahoma,
Ohio, Pennsylvania, and West Virginia.
Additional information about EXCO Resources, Inc. may be obtained
by contacting EXCO's Chairman, Douglas H. Miller, or its President,
Stephen F. Smith, at EXCO's headquarters, 12377 Merit Drive, Suite
1700, Dallas, TX 75251, telephone number (214) 368-2084, or by
visiting our website at www.excoresources.com. Our SEC filings and
press releases can be found under the Investor Relations tab.
This release may contain forward-looking statements relating to
future financial results or business expectations. Business plans may
change as circumstances warrant. Actual results may differ materially
from those predicted as a result of factors over which EXCO has no
control. Such factors include, but are not limited to: acquisitions,
recruiting and new business solicitation efforts, estimates of
reserves, commodity price changes, the extent to which EXCO is
successful in integrating recently acquired businesses, regulatory
changes and general economic conditions. These risk factors and
additional information are included in EXCO's reports on file with the
Securities and Exchange Commission.
The SEC has generally permitted oil and natural gas companies, in
filings made with the SEC, to disclose only proved reserves that a
company has demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing
economic and operating conditions. We use the terms "probable,"
"possible," or "unproved" to describe volumes of reserves potentially
recoverable through additional drilling or recovery techniques that
the SEC's guidelines prohibit us from including in filings with the
SEC. These estimates are by their nature more speculative than
estimates of proved reserves and accordingly are subject to
substantially greater risk of being actually realized by the company.
While we believe our calculation of unproved drillsites and
estimations of unproved reserves have been appropriately risked and
are reasonable, such calculations and estimates have not been reviewed
by third party engineers or appraisers. Investors are urged to
consider closely the disclosure in our Annual Report on Form 10-K for
the year ended December 31, 2007 available on our website at
www.excoresources.com under the Investor Relations tab or by calling
us at (214) 368-2084.
SOURCE: EXCO Resources, Inc.
EXCO Resources, Inc.
Douglas H. Miller, 214-368-2084
Chairman
or
Stephen F. Smith, 214-368-2084
President
http://www.excoresources.com
