DALLAS, Nov 24, 2009 (BUSINESS WIRE) -- The Board of Directors of EXCO Resources, Inc. (NYSE: XCO) ("EXCO") has
approved a capital budget of $471.4 million for 2010. The budget is
expected to be fully funded with cash flow from operations and is
expected to provide significant increases in production and reserves.
The capital budget, which is net of an estimated $205.1 million carry by
BG Group for certain drilling and completion spending in our East
Texas/North Louisiana joint venture area, is allocated among our
different budget categories as follows:
|
|
|
|
|
(Dollars in millions)
|
|
|
|
Drilling and Completion
|
|
$ 217.4
|
|
Land
|
|
78.2
|
|
Seismic
|
|
32.3
|
|
Recompletion/Exploitation/Operations
|
|
79.4
|
|
Midstream (Including $7.8 million equity contribution to TGGT)
|
|
39.1
|
|
Corporate and Other
|
|
25.0
|
|
Total
|
|
$ 471.4
|
We currently have 13 operated drilling rigs across our portfolio, and we
anticipate that this will increase to 17 during the first quarter and
remain relatively flat throughout the remainder of 2010. Details of our
plans within the various divisions and entities follow:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number
|
|
Drilling
|
|
Other
|
|
Total
|
|
(Dollars in millions)
|
|
of Wells
|
|
Capital
|
|
Capital
|
|
Capital
|
|
East Texas/North Louisiana
|
|
138
|
|
$
|
126.1
|
|
$
|
129.1
|
|
$
|
255.2
|
|
Appalachia
|
|
27
|
|
|
65.0
|
|
|
89.2
|
|
|
154.2
|
|
Permian
|
|
40
|
|
|
26.3
|
|
|
2.9
|
|
|
29.2
|
|
TGGT Holdings (Midstream JV)
|
|
--
|
|
|
--
|
|
|
7.8
|
|
|
7.8
|
|
Corporate and Other
|
|
--
|
|
|
--
|
|
|
25.0
|
|
|
25.0
|
|
Total
|
|
205
|
|
$
|
217.4
|
|
$
|
254.0
|
|
$
|
471.4
|
East Texas/North Louisiana Division:
The capital budget program in East Texas/North Louisiana includes plans
to spend $255.2 million net to EXCO, or approximately 54% of the total
EXCO capital budget. We plan to drill and complete 115 gross (36.6 net)
operated and 23 gross (1.3 net) non-operated wells in the division.
EXCO/BG Group Joint Venture (JV) - While we plan to spend a total of
$740.8 million within the JV, only $165.3 million of this amount will be
spent by EXCO as BG Group will fund $205.1 million of EXCO's portion of
deep drilling and completion costs. The carry results in BG Group's
paying 75% of EXCO's share of deep drilling and completion until BG
Group's $400 million carry commitment is satisfied. Of the $165.3
million that is net to EXCO, $78.9 million will be spent for drilling
and completion costs, $50.0 million for lease acquisitions, $31.8
million for operations projects, and $4.6 million for seismic data
acquisition. Since closing the joint venture in August, we have acquired
approximately 17,000 additional net acres. BG Group has the right to
acquire half of these acres. We continue to negotiate for the
acquisition of more acreage.
We are primarily drilling Haynesville shale targets, and we plan to have
14 operated drilling rigs within the JV area throughout the year. These
rigs should allow us to drill and complete 108 gross (30.6 net) operated
wells, 95 (26.4 net) of which are Haynesville shale targets, seven of
which are Bossier shale targets, and six of which are planned Cotton
Valley horizontals. Of our 14 operated drilling rigs, 13 will drill in
our Holly area in DeSoto Parish and southern Caddo Parish, Louisiana,
which we believe to be an outstanding area within the Haynesville shale
play. One rig will drill in our Jonesville/Waskom area which includes
eastern Harrison County, Texas and western Caddo Parish, Louisiana. All
of our 23 planned non-operated wells to be drilled are within the JV
area.
Vernon Area - In the Vernon area, we typically drill for deep Cotton
Valley targets. We plan to drill seven gross (6.0 net) wells and spend a
total of $47.2 million drilling to test various zones for productivity.
The overall budget within the Vernon area totals $89.9 million, with our
non-drilling spending including $27.0 million for workovers and
miscellaneous operations and midstream projects, $10.4 million for
seismic data acquisition, and $5.3 million for land.
Appalachia Division:
The capital budget program for our Appalachia Division totals $154.2
million, of which $65.0 million will be spent to drill and complete 11
gross (11.0 net) operated horizontal Marcellus shale wells, four gross
(0.6 net) non-operated Marcellus shale horizontal wells, six gross (6.0
net) vertical Marcellus shale wells, and six gross (6.0 net) shallow
wells which are being drilled primarily to hold deep acreage. We have
identified five focus areas within the Marcellus shale play. We expect
to drill nine gross (9.0 net) operated horizontal wells during 2010 in
central Pennsylvania, but we also expect to drill vertical and
horizontal wells within other areas of the play to test and hold acreage.
Other spending within the division includes $22.6 million for leasing
land, $17.2 million for seismic data acquisition, and $28.6 million to
expand our midstream system, all within the Marcellus shale areas. The
remaining $20.8 million of the capital budget will support various
operations initiatives.
Permian Division:
We have a capital budget totaling $29.2 million for our Permian
Division. Within this budget, $26.3 million will be spent to drill and
complete 40 gross (38.7 net) operated wells, 36 gross (34.7 net) of
which are in our Sugg Ranch Field. The target zones include Clearfork,
Wolfcamp, Canyon and Fusselman formations, which we believe contain
higher oil bearing opportunities. The remaining four wells to be drilled
will target zones within existing acreage blocks we hold within the
Permian Basin.
TGGT Holdings, LLC (TGGT):
TGGT is the midstream joint venture owned equally by EXCO and BG Group
in East Texas/North Louisiana. The TGGT capital budget will support
installation of lateral lines, well flowlines, amine treating and
dehydration equipment, among others. As TGGT is a stand-alone entity,
the bulk of its $101.0 million ($50.5 million net to EXCO's interest)
capital budget will be provided by internal TGGT cash flow, but there is
a forecast cash call of $7.8 million net to EXCO that we have included
within the EXCO capital budget.
EXCO Resources, Inc. is an oil and natural gas exploration, development
and production company headquartered in Dallas, Texas with principal
operations in East Texas, North Louisiana, Appalachia and West Texas.
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:
estimates of reserves, commodity price changes, 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. EXCO undertakes no obligation to
publicly update or revise any forward-looking statements.
SOURCE: EXCO Resources, Inc.
EXCO Resources, Inc.
Douglas H. Miller, 214-368-2084
Chairman
or
Stephen F. Smith, 214-368-2084
President
www.excoresources.com
