Exco Resources Inc · OTC:EXCE
Exco Resources — Investor Day (October 2007)
32 slides from Exco Resources's investor day presentation, Oct 15, 2007
Slide 1: EXCO's State of the Company and Corporate Governance Discussion
October 2007 EXCO’s State of the Company and Corporate Governance Discussion Boston, Massachusetts
Slide 2: Agenda
Agenda Welcome Doug Miller Chairman and CEO State of the Industry Boone Pickens Chairman, BP Capital LP EXCO Plans Doug Miller Financial Review Steve Smith Vice Chairman and President Operations Review Hal Hickey Vice President and COO Corporate Governance Doug Ramsey Vice President and CFO Officer
Slide 3: Forward Looking Statements
Forward Looking Statements We believe that it is important to communicate our expectations of future performance to our investors. However, events may occur in the future that we are unable to accurately predict, or over which we have no control. You are cautioned not to place undue reliance on a fo
Slide 4: Corporate Overview
41% Equity IRR since 1998 Target 50% of EBITDA for capital spending Free cash flow to fund additional acquisitions and pay down debt $5.8 billion of Enterprise Value $1.8 billion market cap(1) $2.0 billion convertible preferred at $19 per share $2.0 billion of debt 4.2 Tcfe of Total Reserves(2) 1.9
Slide 5: Historical Rate of Return Summary
Historical Rate of Return Summary From first EXCO public equity raise - 8/12/98: To stock price at year end 2001 36% To go - private transaction - 7/29/ 03 25% From go private transaction - 7/29/ 03: To equity restructuring - 10/03/05 77% To XCO initial public offering - 2/ 0 9 /06 102% From equity
Slide 6: Master Limited Partnership (EXCO Partners, LP)
Master Limited Partnership (EXCO Partners, LP) (in millions) S-1 filed September 13, 2007 Expected total size of offering (before “shoe”) Offering (75 million common units) $1,500 % of Equity 50% Use of proceeds pro forma at June 30, 2007 Repay assumed indebtedness from EXCO $ 444 Cash to EXCO 556 E
Slide 7: Master Limited Partnership (EXCO Partners, LP) continued
Master Limited Partnership (EXCO Partners, LP) continued Properties to be contributed by EXCO All in Appalachia Well-bores only in East Texas, North Louisiana, Mid-Continent and Permian Lead Bookrunner – Goldman, Sachs & Co. A registration statement relating to common units of EXCO Partners has been
Slide 8: Financial Review
Financial Review Steve Smith
Slide 9: Financial Highlights
Financial Highlights (In millions, except volume, wells drilled and productive wells ) Non-GAAP measure - please see tables on slides 31-32 for reconciliation to most comparable GAAP measure Does not include non-cash mark-to-market effects Net income before preferred dividends Cash flow before chang
Slide 10: Pre and Post MLP
Pre and Post MLP (1) Pro forma for the contribution of EXCO assets to EXCO Partners, which is non-recourse to EXCO and shown unconsolidated (2) As of June 2007 Mid-year total proved reserves based on $8 natural gas and $60 oil NYMEX pricing; at SEC June 30, 2007 pricing, total proved reserves are 1,
Slide 11: Derivatives Summary – Consolidated EXCO Resources, Inc.
Derivatives Summary – Consolidated EXCO Resources, Inc. As of October 5, 2007 (In thousands, except prices) Gas volume Mmbtus Weighted average contract price per Mmbtu Oil volume Bbls Weighted average contract price per Bbl Q4 2007 30,428 $8.06 375 $64.08 2008 100,110 8.36 1,095 61.09 2009 73,395 7.
Slide 12: Operations Review
Operations Review Hal Hickey
Slide 13: Snapshot
Snapshot SEC 12/31/05 total proved reserves, pro forma for the TXOK acquisition using SEC 12/31/05 total proved reserves, plus proved reserves as of the effective date of acquisitions completed during 2006. Winchester reserves based on 6/22/06 NYMEX pricing June 30, 2007 proved reserves with $8 natu
Slide 14: 2006-2007 Acquisition Activity
2006-2007 Acquisition Activity (in thousands) (1) Net of Gulf Coast properties sold to Crimson Exploration, Inc. for $245.4 million in cash and 750,000 shares of Crimson common stock valued at $4.6 million Asset Acquisitions : Effective Dates Values Allocated West Texas properties from private produ
Slide 15: Management Team
EXCO Resources, Inc. Management Team 15
Slide 16: Total consolidated proved reserves
Total consolidated proved reserves(1)(2) = 1,895 Bcfe Total 3P reserves(1)= 4,175 Bcfe EXCO Reserve Base 429.7 Bcfe Proved (23%) 41.0 Mmcfe/d (11%) 997.9 Bcfe Proved (53%) 248.0 Mmcfe/d (65%) 101.3 Bcfe Proved (5%) 17.0 Mmcfe/d (4%) 2.4 Bcfe Proved (< 1%) < 1.0 Mmcfe/d (< 1%) 15.9 Bcfe Proved (1%) 3
Slide 17: Areas of Operation
EXCO Resources, Inc. Areas of Operation
Slide 18: Long reserve life and multi-year project inventory across all regions
Long reserve life and multi-year project inventory across all regions As of June 30, 2007 1) June 30, 2007 proved reserves with $8 natural gas and $60 oil pricing, adjusted for differentials and excluding hedge effects 2) Reserve life based on proved reserves and noted production 3) Includes drillin
Slide 19: EXCO 2007 Capital Budget and Drilling Schedule
EXCO 2007 Capital Budget and Drilling Schedule 2007 Capital Budget totals $502.9 Million(1) $MM 402.9 9.4 31.0 48.6 $MM 308.4 70.3 33.0 32.0 48.6 Includes $11 million of IT and other capitalized items 2007 Drilling Locations PUD PROB POSS TOTAL East Texas/North Louisiana 91 46 32 169 Appalachia 187
Slide 20: Corporate Governance
Corporate Governance Doug Ramsey
Slide 21: Board Composition
Board Composition Experience Average 32 years of collective business experience 10 Member Board 2 inside directors, 8 outside directors High Ownership by Directors 34.1% of common stock and convertible preferred stock (as converted) owned by directors(1) Independence 7 of 8 outside directors are ind
Slide 22: Board Members: Independent Directors
Board Members Independent Directors Jeff Benjamin, 46 Senior Advisor to Apollo Management, LP Vince Cebula, 43 Managing Director, Oaktree Capital Management, L.P. Earl Ellis, 66 Chairman and CEO, Whole Harvest Products Former Managing Partner, Benjamin, Jacobson & Sons, LLC, a NYSE Specialist Firm a
Slide 23: Board Members: Other Outside Director and Inside Directors
Board Members Other Outside Director Boone Pickens, 79 Chairman and CEO, BP Capital LP Inside Directors Doug Miller, 60 Chairman and CEO, EXCO Resources, Inc. Former Chairman and CEO of Coda Energy, Inc. Steve Smith, 66 Vice Chairman and President, EXCO Resources, Inc.
Slide 24: Corporate Governance
Corporate Governance ISS Corporate Governance Quotient (CGQ) at October 1, 2007 Outperform 76.5% of the Russell 3000 Outperform 73.4% of the Energy group Planned Corporate Governance Enhancements Limit on director’s board service to 4 or fewer other public boards Long-term incentive plan will prohib
Slide 25: Ownership Table
Ownership Table As of October 8, 2007 Includes 401(k) holdings of EXCO shares as of June 30, 2007. Includes common stock held by our directors and their affiliated investment funds Includes convertible preferred stock on an as converted basis held by the affiliated investment funds of our directors
Slide 26: Board Compensation
Board Compensation Board $25,000 annual retainer in cash or EXCO common stock for non-employee directors Four directors have elected to receive their retainer in common stock One time option grant of 50,000 shares Reasonable out-of-pocket expenses for attendance Committees Audit: Chair - $50,000 per
Slide 27: Management Compensation
Management Compensation All cash and/or stock option bonuses are approved by EXCO’s compensation committee prior to being awarded Valued using the difference between the closing price of EXCO on October 1, 2007 and the strike price multiplied by the corresponding number of shares Note: EXCO’s salari
Slide 28: Stock Options Policy
Stock Options Policy New Hire: Granted on later of board approval or first business day of month following date of hire at closing price. Typically, 10% of base salary in number of shares. Bonus: Past option bonus grants have been made to all employees based on a percentage of their annual income (i
Slide 29: Employee Benefits
Employee Benefits EXCO’s officers participate in employee benefit plans including the 401(k) plan and medical, dental, vision, life and disability insurance on the same basis as the rest of EXCO’s employees No pension plan or other executive compensation arrangements No special executive officer sev
Slide 30: EXCO Resources, Inc.
EXco EXCO Resources, Inc. 30 PROD Grimmaacadber NLT
Slide 31: Non-GAAP Reconciliations
Non-GAAP Reconciliations Reconciliation of condensed consolidated cash flow from operating activities Years Ended December 31 , Six months ended (Unaudited , in millions ) 2004 2005 2006 June 30, 2007 Net cash provided by (used in ) operations $ 118.5 $ (72.9) $ 227.7 $ 169.1 Net change in wo rking
Slide 32: Non-GAAP Reconciliations
Non-GAAP Reconciliations Condensed consolidated EBITDA and adjusted EBITDA reconciliations (1) Earnings before interest, taxes, depreciation, depletion and amortization, or “EBITDA” represents net income adjusted to exclude interest expense, income taxes, depreciation, depletion and amortization. “A