Exco Resources Inc · OTC:EXCE
Exco Resources — Investor Day (January 2008)
87 slides from Exco Resources's investor day presentation, Jan 29, 2008
Slide 1: Analyst Meeting January 30, 2008
PPT-020-AnalystMeet-108 Analyst Meeting January 30, 2008
Slide 2: Forward Looking Statements
EXCO Resources, Inc. PPT-020-AnalystMeet-108 2 Forward Looking Statements This presentation contains forward-looking statements, as defined in Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. These forward-looking statements relate to, am
Slide 3: (continued) Forward Looking Statements
EXCO Resources, Inc. PPT-020-AnalystMeet-108 3 (continued) Forward Looking Statements We believe that it is important to communicate our expectations of future performance to our i nvestors. However, events may occur in the future that we are unable to accuratel y pr edict, or over which we have no
Slide 4: Agenda
EXCO Resources, Inc. PPT-020-AnalystMeet-108 4 Agenda Introduction Doug Miller Steve Smith Asset Overview Hal Hickey John Jacobi Financial Overview Paul Rudnicki Regional Overviews East Texas / North Louisiana Mike Chambers Harold Jameson Bill Chaney Mid-Continent Charles Evans Permian Tommy Knowles
Slide 5: Disciplined Growth Strategy
EXCO Resources, Inc. PPT-020-AnalystMeet-108 5 Disciplined Growth Strategy EXCO’s formula for creating equity value enables us to deliver strong, sustainable equity returns over the long term
Slide 6: Key Investment Highlights
EXCO Resources, Inc. PPT-020-AnalystMeet-108 6 Key Investment Highlights • Outstanding Track Record – 38.5% annualized growth in common share value since 1998 – 42%and 71% compounded growth rates in production and reserves since 2004 • Outstanding Reserve Base(1) – 1.9 Tcfe proved reserves – 2.3 Tcf
Slide 7: Business Strategy
EXCO Resources, Inc. PPT-020-AnalystMeet-108 7 Business Strategy Value creation from acquisitions occurs from effective development and efficient operation of our asset base • Acquire quality assets – Long life is key – 50-75% producing – 25-50% non-producing upside – Focus on key areas with follow-
Slide 8: Execution of Acquisition Strategy: Dec 2003 - Dec 2007
EXCO Resources, Inc. PPT-020-AnalystMeet-108 8 1,794 1,902 4,406 223 263 218 366 2,290 2,290 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 Proved Reserves as of 12-31-03 Proved Reserves Acquir ed Discoveries and Extensions Reserves Produced Dispositions Identified Probable & Possible Ident
Slide 9: Acquisition Economics are Driven by Market Conditions
EXCO Resources, Inc. PPT-020-AnalystMeet-108 9 Acquisition Economics are Driven by Market Conditions Accretive acquisitions can be made in various price environments $0.67 $0.54 $0.56 $0.98 $0.84 $0.90 $1.22 $1.83 $2.41 $1.65 $1.87 $3.12 $3.07 $4.12 $4.88 $7.01 $5.83 $1.71 $2.83 $6.82 1998 1999 2000
Slide 10: Execution of Development & Exploitation Strategy: 2004-2007E
EXCO Resources, Inc. PPT-020-AnalystMeet-108 10 Execution of Development & Exploitation Strategy: 2004-2007E Spending ˜ 60% of EBITDA on development and exploitation has grown our proved reserves by 24% while leaving free cash to make acquisitions $751 $287 $129 $74 $0 $100 $200 $300 $400 $500 $600
Slide 11: Free Cash Margin
EXCO Resources, Inc. PPT-020-AnalystMeet-108 11 Free Cash Margin Free cash margin has expanded providing more cash flow for growth $0.00 $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 2004 2005 2006 2007E Per Mcfe Free Cash Margin Production Taxes LOE Replacement Cost $2.89 $4.54 $4.55 $4.21
Slide 12: Management Team
EXCO Resources, Inc. PPT-020-AnalystMeet-108 12 Management Team
Slide 13: Management Team Bios
EXCO Resources, Inc. PPT-020-AnalystMeet-108 13 Management Team Bios • Douglas H. Miller has been the Chairman of the board of directors and Chief Executive Officer of EXCO since December 1997. Mr. Miller was Chairman of the board of directors and Chief Executive Officer of Coda Energy, Inc., or Cod
Slide 14: Management Team Bios
EXCO Resources, Inc. PPT-020-AnalystMeet-108 14 Management Team Bios • Richard L. Hodges became one of our Vice Presidents in October 2000. He began his career with Texaco, Inc. and has served in various land management capacities with several independent oil and gas companies during the past 27 yea
Slide 15: Management Team Bios
EXCO Resources, Inc. PPT-020-AnalystMeet-108 15 Management Team Bios • Joe D. Ford became our Vice President of Human Resources in November 2007. He has spent his career in various Human Resource management capacities including a subsidiary of General Dynamics (NYSE) as Manager of Human Resources, C
Slide 16: Asset Overview
PPT-020-AnalystMeet-108 Asset Overview Hal Hickey
Slide 17: Reserves & Well Summary
EXCO Resources, Inc. PPT-020-AnalystMeet-108 17 East TX / North LA Appalachia Mid- Continent Permian Rockies Total Reserves & Well Summary: Proved Reserves(1) (Bcfe) 1,005 425 316 144 12 1,902 Total Reserves(2) (Bcfe) 2,333 819 468 339 233 4,192 Potential (Bcfe) 388 2,619 100 299 1,000 4,406 Total R
Slide 18: Reserve Base
EXCO Resources, Inc. PPT-020-AnalystMeet-108 18 12 Bcfe Proved (<1%) 233 Bcfe 3P (5%) 1,233 Bcfe 3P+ (14%) 2 Mmcfe/d (1%) Proved Reserves = 1,902 Bcfe 3P Reserves = 4,192 Bcfe 3P+ Reserves = 8,598 Bcfe Rockies 144 Bcfe Proved (8%) 339 Bcfe 3P (8%) 638 Bcfe 3P+ (7%) 26 Mmcfe/d (7%) Permian Basin 425
Slide 19: Undrilled, Low-Risk Upside
EXCO Resources, Inc. PPT-020-AnalystMeet-108 19 Rockies Permian Basin East Texas / North Louisiana Undrilled, Low-Risk Upside Totals Approximately 2.9 Tcfe PUD Reserves = 565 Bcfe PRB Reserves = 716 Bcfe POS Reserves = 1,574 Bcfe 226 Bcfe • Lance, Fort Union, Tensleep, Frontier, Mesa Verde formation
Slide 20: Estimated Unbooked Potential
EXCO Resources, Inc. PPT-020-AnalystMeet-108 20 Rockies Permian Basin Appalachia Mid-Continent East Texas / North Louisiana 299 Bcfe Potential • 20,000 acre f ield extension in progress • Wolf camp / Clearf ork oil play being ev aluated by 3D • 20,000 acre Tannehill shallow oil being worked – drilli
Slide 21: Inventory for the Future
EXCO Resources, Inc. PPT-020-AnalystMeet-108 21 Inventory for the Future Includes over 18,000 drilling locations and 7.3 Tcfe of reserves Appalachia 5,000+ 2,619 2-5 years ETX/NLA 600+ 388 2-4 years Mid-Continent 500+ 100 3-5 years Permian 700+ 299 2-5 years Rockies 2,000+ 1,000 3-5 years Appalachia
Slide 22: Average Daily Production
EXCO Resources, Inc. PPT-020-AnalystMeet-108 22 Average Daily Production Acquisition and development efforts have tripled our production in 3 years 19 33 34 34 63 65 136 332 385 29 36 48 6 2 8 6 0 50 100 150 200 250 300 350 400 450 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008E Mmcfe/d Cana
Slide 23: Value Enhancement on Acquired Properties: Vernon Field
EXCO Resources, Inc. PPT-020-AnalystMeet-108 23 0 200 400 600 800 1,000 1,200 1,400 • Estimated total reserves (3P) have increased 124% since acquisition • Including reserves produced, proved reserves have increased 15% since acquisition • Assumes 2008 drilling and completion capital increasing at 2
Slide 24: Value Enhancement on Acquired Properties: Winchester
EXCO Resources, Inc. PPT-020-AnalystMeet-108 24 0 200 400 600 800 1,000 1,200 1,400 Value Enhancement on Acquired Properties Winchester Acquisition • Estimated total reserves (3P) have increased 28% since acquisition • Including reserves produced, proved reserves have increased 8% since acquisition
Slide 25: SEC Reserve Reconciliation
EXCO Resources, Inc. PPT-020-AnalystMeet-108 25 SEC Reserve Reconciliation(1) Bcfe 2007 Beginning SEC Reserves 1,224(2) Production (121) Purchase of Reserves in Place 815 Extensions & Discoveries 216 Revisions (85) Dispositions (184) Ending SEC Reserves 1,865(3) Price Revision 37(4) Ending Reserves
Slide 26: 2008 Capital Program
EXCO Resources, Inc. PPT-020-AnalystMeet-108 26 2008 Capital Program Area Drilling & Completion (Net MM) Gross Projects (#) Exploitation (Net MM) Gross Projects (#) Operations & Other (Net MM) Total 2008 Captial Budget (Net MM)(2) ETX / NLA $245 139 $26 25 $68 $339 Appalachia 60 247 1 22 8 69 Mid-Co
Slide 27: Direct Development Costs
EXCO Resources, Inc. PPT-020-AnalystMeet-108 27 Direct Development Costs 2008E Development Cost 2007E Development Cost Risked Unrisked East Texas / North Louisiana $2.34 $2.52 $2.24 Appalachia 2.49 2.13 1.86 Mid-Continent 1.93 2.07 1.87 Permian / Rockies 1.82 2.06 1.84 EXCO Consolidated 2.27 2.29 2.
Slide 28: Focus on Efficient Operations
EXCO Resources, Inc. PPT-020-AnalystMeet-108 28 Operating Costs Reduced water disposal expenses Improved chemical treating Drilling and Completion Reduced rig rates Faster drill times Lower stimulation costs Operational efficiencies Midstream and Marketing Aligned with compressor supplier to reduce
Slide 29: Midstream Operations
EXCO Resources, Inc. PPT-020-AnalystMeet-108 29 • TGG 57 mile, 20” Extension – Adding 100+ Mmcf/d of throughput to the existing 53 mile TGG system. Adds additional sales points and targets a new area where we have an established customer base. Fully operational by 2nd half of 2008. • Talco – located
Slide 30: Midstream Assets Overview
EXCO Resources, Inc. PPT-020-AnalystMeet-108 30 Midstream Assets Overview • TGG Pipeline – 53 mile intrastate pipeline – Access to three plants with a combined capacity total of 1 Bcf/d – Access to 12 interstate pipelines – Current throughput of 122 Mmcf/d • 20% company owned production • Talco Mids
Slide 31: Financial Overview
PPT-020-AnalystMeet-108 Financial Overview Paul Rudnicki
Slide 32: Performance Highlights
EXCO Resources, Inc. PPT-020-AnalystMeet-108 32 Performance Highlights $ In Millions 2004 2005 2006 2007 E Oil & Natural Gas Revenue $ 142 $ 203 $ 356 $ 804 LOE $ 20 $ 20 $ 47 $ 113 Production Taxes 8 11 22 55 Total Production Costs $ 28 $ 31 $ 69 $ 168 Cash Operating Margin $ 114 $ 172 $ 287 $ 636
Slide 33: Per Share Growth
EXCO Resources, Inc. PPT-020-AnalystMeet-108 33 Per Share Growth Debt Adjusted Shares 1st Quarter 2006 4th Quarter 2007 % Growth Proved Reserves - Bcfe 668 1,902 185% Probable and Possible Reserves - Bcfe 244 2,290 839% Total Reserves - Bcfe 912 4,192 360% Daily Production - Mmcfe/d 114 376 230% Pip
Slide 34: Net Asset Value Summary
EXCO Resources, Inc. PPT-020-AnalystMeet-108 34 Net Asset Value Summary In millions, except per share and per unit Low High Proved Reserves 1.9 Tcfe at $2.50 to $3.00 per Mcfe $4,755 $5,706 Low-risk Unproved Upside 2.3 Tcfe at $0.50 to $0.75 per Mcfe 1,145 1,718 Potential Upside 4.4 Tcfe - - Midstre
Slide 35: 3rd Quarter 2007 Income Statement Detail: Revenues
EXCO Resources, Inc. PPT-020-AnalystMeet-108 35 3rd Quarter 2007 Income Statement Detail Revenues In thousands Reported Adjusted EBITDA(1) Revenues: Oil and Natural Gas $ 218,925 $ 218,925 Oil and Natural Gas Hedge Settlements $ 46,249 46,249 Fair Market Value Adjust on Derivatives 52,003 - Gain on
Slide 36: 3rd Quarter 2007 Income Statement Detail: Expenses
EXCO Resources, Inc. PPT-020-AnalystMeet-108 36 In thousands Reported A djusted EBITDA(1) Expenses: Oil and Natural Gas Production & Non-recurring Production $ 29,777 $ 29,777 Stock Based Compensation - LOE 730 - Total Lease Operating Expense $ 30,507 - Severance and Ad Valorem Taxes 14,304 14,304 G
Slide 37: 3rd Quarter 2007 Income Statement Detail: Net Income
EXCO Resources, Inc. PPT-020-AnalystMeet-108 37 In thousands Reported A djusted EBITDA(1) Total Revenues $ 326,229 $ 274,226 Total Expenses 208,993 59,558 Income Before Taxes / Adjusted EBITDA $ 117,236 $ 214,668 Current $ (6,075) Deferred 66,849 Income Tax Expense $ 60,774 Net Income 56,462 Preferr
Slide 38: Balance Sheet: Assets
EXCO Resources, Inc. PPT-020-AnalystMeet-108 38 Balance Sheet Assets Assets: In Thousands 9/30/07 Balance Sheet Cash & Equivalents $ 146,797 Accounts Receivable and Other 219,018 Oil and Natural Gas Derivatives 80,471 Total Current Assets 446,286 Unproved Oil and Natural Gas Properties 327,862 Prove
Slide 39: Balance Sheet: Liabilities and Shareholders' Equity
EXCO Resources, Inc. PPT-020-AnalystMeet-108 39 Balance Sheet Liabilities and Shareholders’ Equity Liabilities & Stockholders’ Equity: In Thousands 9/30/07 Balance Sheet Accounts Payable and Accrued Liabilities and Other $223,425 Oil and Natural Gas Derivatives 28,373 Total Current Liabilities 251,7
Slide 40: Liquidity and Capitalization
EXCO Resources, Inc. PPT-020-AnalystMeet-108 40 Liquidity and Capitalization In Thousands 9/30/07 Balance Sheet Borrowing Base $ 2,200,000 Long-Term Debt 1,524,000 Liquidity $ 676,000 Bond Face $ 444,720 Bond Premium 11,760 Total Book Value $ 456,480 7% Convertible Preferred Stock $ 2,000,000 Prefer
Slide 41: 4Q 2007 and 2008 Guidance
EXCO Resources, Inc. PPT-020-AnalystMeet-108 41 4Q 2007 and 2008 Guidance 4th Q 2007E 2008E ($ in thousands, except per unit amounts) Low High Low High Production: Oil – Mbbls 469 469 1,980 2,020 Gas - Mmcf 31,827 31,827 127,210 130,175 Mmcfe 34,641 34,641 139,090 142,295 Per day - Mmcfe 376 376 380
Slide 42: Quarterly 2008 Guidance
EXCO Resources, Inc. PPT-020-AnalystMeet-108 42 Quarterly 2008 Guidance 1st Q 2008E 2ndQ 2008E 3rdQ 2008E 4thQ 2008E ($ in thousands, except per unit amounts) Low High Low High Low High Low High Production: Oil - Mbbls 480 490 490 500 500 510 510 520 Gas - Mmcf 31,200 31,600 31,200 32,000 32,000 32,
Slide 43: Current Hedge Position
EXCO Resources, Inc. PPT-020-AnalystMeet-108 43 Current Hedge Position Mitigates market risk and locks in future cash flow for development and acquisition program • Target hedging 65-80% of production volumes for 3-5 years • Hedging program covers long term debt • Only 14% of Proved Reserves hedged
Slide 44: Regional Overviews
PPT-020-AnalystMeet-108 Regional Overviews Mike Chambers, Harold Jameson, Bill Chaney, Charles Evans, Tommy Knowles, Bill Reinhart, Wendy Straatmann
Slide 45: Areas of Operation
EXCO Resources, Inc. PPT-020-AnalystMeet-108 45 Areas of Operation East Salt Creek Mocane-Laverne Watonga Chickasha Golden Trend Longwood / W askom Vernon Holly / C aspiana Gladewater Tyler Area Sugg Ranch Ackerly Northern W V East ern OH Northwestern PA Central PA Southern W V Peco s Slope Vinegaro
Slide 46: East Texas/North Louisiana Area
EXCO Resources, Inc. PPT-020-AnalystMeet-108 46 East Texas/North Louisiana Area Basin Overview • 50,000 square miles • Over 6 Bcfe/d of production • Over 1,000 operators • 95-100% of NYMEX gas price East Texas / North Louisiana Overview • Part of the Cotton Valley Sand trend, which covers parts of t
Slide 47: East Texas/North Louisiana Division Overview
EXCO Resources, Inc. PPT-020-AnalystMeet-108 47 East Texas/North Louisiana Division Overview Portfolio Highlights Reserves Locations Bcfe Gross / Net PD 717 PUD 288 475 / 353 TP 1,005 Prob 502 393 / 293 Poss 826 1,645 / 1,272 3P 2,333 2,513 / 1,918 Potential 388 600 / 464 Total 2,721 3,113 / 2,382 •
Slide 48: East Texas/North Louisiana Low-risk and Potential Upside
EXCO Resources, Inc. PPT-020-AnalystMeet-108 48 East Texas/North Louisiana Low-risk and Potential Upside Gladewater • Downspacing • Geoscience evaluation ongoing • Horizontal Drilling • Compression Savings Longwood/Waskom • Complete in Hosston • Downspacing Vernon • Drill 24 wells in 2008 •Testing f
Slide 49: Drilling & Completion and Exploitation
EXCO Resources, Inc. PPT-020-AnalystMeet-108 49 Drilling & Completion and Exploitation Unrisked Risked(1) 2008 Investment – Millions $ 271 $ 271 Total Investment – Millions $ 300 $ 300 Reserves Developed – Bcfe 134 119 Finding Cost – per Mcfe $ 2.24 $ 2.52 Rate of Return(2) 22% 17% Exploitation $26
Slide 50: Vernon Field
Vernon Field Field Overview Field Highlights • Acquired March 2007 • 2007 exit rate w as 129 Mmcfe/d (net) • Producing w ells: 368 (gross) / 335 (net) Reserves Locations Bcfe Gross / Net PD 394 PUD 77 46 / 40 TP 471 Prob 260 84 / 77 Poss 284 152 / 138 3P 1,015 282 / 255 Pot 181 96 / 87 Total 1,196 3
Slide 51: Vernon Field Drilling Economics
EXCO Resources, Inc. PPT-020-AnalystMeet-108 51 Vernon Field Drilling Economics • Average WI 91% • Average NRI 72% • Mcfe/d IP 6,000 • Mcfe/d 1st Month 2,000 • % gas / % oil 99 / 1 • IRR @ $8 gas and $60 oil 32% Typical Well Gross Net Cost - Thousands $4,500 $4,100 Reserves - Mmcfe 2,800 2,000 Verno
Slide 52: Vernon Refracs
EXCO Resources, Inc. PPT-020-AnalystMeet-108 52 Typical Well Gross Net Cost - Thousands $2,200 $2,000 Reserves - Mmcfe 1,000 - 1,300 800 - 1,000 Vernon Refracs • Results to date are encouraging • Refrac’d 9 wells in Vernon Field; initial production increase over 3 times the pre-frac rate • Monitorin
Slide 53: Vernon Field Development Plan
EXCO Resources, Inc. PPT-020-AnalystMeet-108 53 Vernon Field • High grade the drilling inventory • 282 potential locations (3P) • Balanced with low risk infill wells and higher risk extension wells • Flatten the base decline with active workover program and operations enhancements • Continue the ref
Slide 54: Holly / Caspiana Field
EXCO Resources, Inc. PPT-020-AnalystMeet-108 54 Holly / Caspiana Field Field Highlights • Acquired October 2006 • Producing wells: 323 (gross) / 223 (net) Reserves Locations Bcfe Gross / Net PD 150 PUD 116 170 / 144 TP 266 Prob 134 132 / 112 Poss 168 441 / 375 3P 568 743 / 631 Total 568 743 / 631 •
Slide 55: Holly / Caspiana Drilling Economics
EXCO Resources, Inc. PPT-020-AnalystMeet-108 55 Holly / Caspiana Drilling Economics Typical Well Gross $M Net $M Cotton Valley Cost $ 1,930 $ 1,800 Hosston R/C Cost 300 280 Total Cost $ 2,230 $ 2,080 Gross Net Reserves - Mmcfe 1,450 1,040 • Average WI 93% • Average NRI 72% • Mcfe/d IP 1,100 • Mcfe/d
Slide 56: Gladewater Field Cotton Valley Drilling Economics
EXCO Resources, Inc. PPT-020-AnalystMeet-108 56 • Average WI 60% • Average NRI 44% • Mcfe/d IP 800 • Mcfe/d 1st Month 700 • % gas / % oil 90 / 10 • IRR @ $8 gas and $60 oil 27% Typical Well Gross Net Cost - Thousands $1,383 $824 Reserves - Mmcfe 650 286 Cotton Valley Drilling Economics Gladewater Fi
Slide 57: Overton Field Cotton Valley Drilling Economics
EXCO Resources, Inc. PPT-020-AnalystMeet-108 57 Cotton Valley Drilling Economics • Average WI 100% • Average NRI 82% • Mcfe/d IP 1,300 • Mcfe/d 1st Month 950 • % gas / % oil 99 / 1 • IRR @ $8 gas and $60 oil 39% Typical Well Gross Net Cost - Thousands $1,600 $1,600 Reserves - Mmcfe 1,125 923 Overton
Slide 58: Mid-Continent Area
EXCO Resources, Inc. PPT-020-AnalystMeet-108 58 Mid-Continent Area Basin Overview • Anadarko Basin 40,000 square miles • 5.7 Bcfe/d of production in Oklahoma • Over 5,300 operators • 85-95% of NYMEX gas price Mid-Continent Overview • Multi-formation potential • Long-life reserves in a concentrated g
Slide 59: Mid-Continent Area Division Overview
EXCO Resources, Inc. PPT-020-AnalystMeet-108 59 Mid-Continent Area Division Overview Portfolio Highlights • TXOK acquisition 2005; APC acquisition 2007 • Producing w ells: 1,638 (gross) / 937 (net) Reserves Locations Bcfe Gross / Net PD 264 PUD 52 117 / 75 TP 316 Prob 58 69 / 36 Poss 94 362 / 166 3P
Slide 60: Mid-Continent Low Risk and Potential Upside
EXCO Resources, Inc. PPT-020-AnalystMeet-108 60 Mid-Continent Low Risk and Potential Upside Mocane-Laverne • Drill 37 wells in 2008 • 234 drilling locations • Increase density drilling • Atoka recompletions • Basal Chester opportunities • Evaluating 3D applicability to detect deeper hydrocarbons • E
Slide 61: Mid-Continent 2008 Capital Program
EXCO Resources, Inc. PPT-020-AnalystMeet-108 61 Mid-Continent 2008 Capital Program Drilling, Exploitation and Operations & Other Capital 9% 7% 84% Drilling & Completion $48 MM (57 projects) Operations & Other $5 MM Exploitation $4 MM (30 projects) Total: $57 MM Drilling & Completion and Exploitation
Slide 62: Golden Trend Area
EXCO Resources, Inc. PPT-020-AnalystMeet-108 62 Golden Trend Area Field Highlights • Producing w ells: 569 (gross) / 337 (net) • Daily volumes: 23.9 Mmcfe/d Reserves Locations (Bcfe) Gross/Net PD 103 PUD 40 59 / 46 TP 143 Prob 13 26 / 12 Poss 35 201 / 95 3P 191 286 / 153 Pot 50 225 / 112 Total 241 5
Slide 63: Golden Trend Drilling Economics
EXCO Resources, Inc. PPT-020-AnalystMeet-108 63 Golden Trend Drilling Economics Year 1 Year 2 Year 3 Year 4 Year 5 5 Yr Cum Terminal Decline Annual Gross Production - Mmcfe 216 133 102 84 72 607 10% Daily Gross Production - Mcfe/d 592 366 279 230 198 % EUR 18.5 11.4 8.7 7.2 6.2 52.0 Typical Well Gro
Slide 64: Mocane-Laverne Field
EXCO Resources, Inc. PPT-020-AnalystMeet-108 64 Mocane-Laverne Field Field Highlights • Producing w ells: 695 (gross) / 415 (net) • Daily volumes: 26 Mmcfe/d Reserves Locations (Bcfe) Gross/Net PD 82 PUD 10 53 / 27 TP 92 Prob 9 32 / 20 Poss 26 149 / 57 3P 127 234 / 104 Pot 50 275 / 138 Total 177 509
Slide 65: Mocane-Laverne Drilling Economics
EXCO Resources, Inc. PPT-020-AnalystMeet-108 65 Mocane-Laverne Drilling Economics Year 1 Year 2 Year 3 Year 4 Year 5 5 Yr Cum Terminal Decline Annual Gross Production - Mmcfe 91 61 47 39 33 271 10% Daily Gross Production - Mcfe/d 249 167 129 107 90 % EUR 19.0 12.8 9.8 8.2 6.9 56.7 • Average WI 57% •
Slide 66: Permian Basin
EXCO Resources, Inc. PPT-020-AnalystMeet-108 66 Permian Basin Basin Overview • 50,000 + square miles • 6.4 Bcfe/d of production • Ov er 800 operators • 90-95% of NYMEX gas price Permian Basin Overview • Long-lif e reserves • Mature oil area • Prolif ic conv entional natural gas reserv oirs • Multipl
Slide 67: Permian Basin Division Overview
EXCO Resources, Inc. PPT-020-AnalystMeet-108 67 Permian Basin Division Overview Portfolio Highlights • Producing w ells: 287 (gross) / 229 (net) Reserves Locations (Bcfe) Gross / Net PD 89 PUD 55 172 / 164 TP 144 Prob 94 206 / 188 Poss 101 306 / 257 3P 339 684 / 609 Pot 299 700 / 588 Total 638 1,384
Slide 68: Permian Low-risk and Potential Upside
EXCO Resources, Inc. PPT-020-AnalystMeet-108 68 Permian Low-risk and Potential Upside Ackerly • 2 horizontal tests in 2008 • 40 more possible Beggs Ranch • Shallow oil prospect • 20,000 net acres • Drilling 6 well test program • 45 mi2 3D seismic shoot in 2008 Sugg Ranch • 600 Drilling locations • D
Slide 69: Permian 2008 Capital Program
EXCO Resources, Inc. PPT-020-AnalystMeet-108 69 Permian 2008 Capital Program Drilling, Exploitation and Operations & Other Capital 1% 9% 90% Drilling & Completion $98 MM (156 projects) Operations & Other $10 MM Exploitation $1 MM (3 projects) Total: $109 MM Drilling & Completion and Exploitation Unr
Slide 70: Sugg Ranch Field
EXCO Resources, Inc. PPT-020-AnalystMeet-108 70 Sugg Ranch Field Field Highlights • Acquired initial interest in April 2006 • Acquired additional 45%+ WI in October 2007 • Took over operations November 1, 2007 • Producing w ells: 160 (gross) / 154 (net) Reserves Locations Bcfe Gross / Net PD 50 PUD
Slide 71: Sugg Ranch Drilling Economics
EXCO Resources, Inc. PPT-020-AnalystMeet-108 71 Sugg Ranch Drilling Economics Typical Well Gross Net Cost - Thousands $695 $674 Reserves - Mmcfe 460 335 • Average WI 97% • Average NRI 73% • Mcfe/d IP 373 • Mcfe/d 1st Month 334 • % gas / % oil 60 / 40 • IRR @ $8 gas and $60 oil 42 % Year 1 Year 2 Yea
Slide 72: Rocky Mountains
EXCO Resources, Inc. PPT-020-AnalystMeet-108 72 Rocky Mountains Basin Overview • 42,000 square miles • 6.7 Bcfe/d of production • Ov er 575 operators • 80-90% of NYMEX gas price Wyoming Ov erv iew • Multiple sedimentary / structural basins • Long-lif e reserves • Mature oil area • By -passed natural
Slide 73: Rocky Mountains Overview
EXCO Resources, Inc. PPT-020-AnalystMeet-108 73 Rocky Mountains Overview Portfolio highlights • Producing w ells: 66 (gross) / 54 (net) Reserves Locations (Bcfe) Gross / Net PD 7 PUD 5 11 / 9 TP 12 Prob 8 12 / 10 Poss 213 127 / 88 3P 233 150 / 107 Pot 1,000 2,000 / 1,940 Total 1,233 2,150 / 2,047 •
Slide 74: Rocky Mountains Low-risk and Potential Upside
EXCO Resources, Inc. PPT-020-AnalystMeet-108 74 Rocky Mountains Low-risk and Potential Upside Wyoming Leasehold • 132,000 net acres total in Wind River, Powder Riv er and Big Horn Basins • Will drill 9 wells in 2008 in Wind Riv er and Big Horn Basins • Considering JV opportunities Birdseye Prospect
Slide 75: Rocky Mountains 2008 Capital Program
EXCO Resources, Inc. PPT-020-AnalystMeet-108 75 Rocky Mountains 2008 Capital Program Drilling, Exploitation and Operations & Other Capital 1% 26% 73% Drilling & Completion $11 MM (9 projects) Operations & Other $4 MM Exploitation $0.2 MM (2 projects) Total: $15 MM Drilling & Completion and Exploitat
Slide 76: Appalachian Basin
EXCO Resources, Inc. PPT-020-AnalystMeet-108 76 Appalachian Basin Basin Overview • 175,000 square miles • 2 Bcfe/d of production (source: EIA) • Over 3,100 operators • 100 - 110% of NYMEX gas price Appalachian Basin Overview • Tight gas resource plays • Stacked sand and shale reservoirs • Repeatable
Slide 77: Appalachia Division Overview
EXCO Resources, Inc. PPT-020-AnalystMeet-108 77 Appalachia Division Overview Portfolio Highlights Marcellus Activity Silurian Clinton-Medina Sands Devonian Sands & Shale Reserves Locations Bcfe Gross / Net PD 260 PUD 165 1,649 / 1,467 TP 425 Prob 55 581 / 498 Poss 339 3,931 / 3,496 3P 819 6,161 / 5,
Slide 78: Appalachia Low-risk and Potential Upside
EXCO Resources, Inc. PPT-020-AnalystMeet-108 78 Appalachia Central PA 183,466 net acres 361 Bcf e 3P reserv es 3,608 3P drilling locations 2008 drilling – 132 wells Northwest PA 77,401 net acres 97 Bcf e 3P reserv es 921 3P drilling locations 2008 drilling – 29 wells Eastern OH 222,957 net acres 97
Slide 79: Appalachian Region 2008 Capital Program
EXCO Resources, Inc. PPT-020-AnalystMeet-108 79 Appalachian Region 2008 Capital Program Drilling, Exploitation and Operations & Other Capital 87% 12% 1% Exploitation $1 MM (22 Projects) Drilling & Completion $60 MM (247 Projects) Operations & Other $8 MM Drilling & Completion and Exploitation Unrisk
Slide 80: Shallow Appalachia Drilling Economics
EXCO Resources, Inc. PPT-020-AnalystMeet-108 80 Shallow Appalachia Drilling Economics Central Pennsylvania • Average WI 100% • Average NRI 88% • Mcfe/d IP 80 - 85 • Mcfe/d 1st Month 80 • % gas / % oil 100 / 0 • IRR @ $8 gas and $60 oil 29% Typical Well Gross Net Cost - Thousands $265 $265 Reserves -
Slide 81: Shallow Appalachia Exploitation Economics
EXCO Resources, Inc. PPT-020-AnalystMeet-108 81 Shallow Appalachia Exploitation Economics Artificial Lift Enhancement • Average WI 100% • Average NRI 88% • Mcfe/d IP 15 - 25 • Mcfe/d 1st Month 20 • % gas / % oil 100 / 0 • IRR @ $8 gas and $60 oil 100+% Typical Well Gross Net Cost - Thousands $43 $43
Slide 82: Appalachia Potential Marcellus Shale
EXCO Resources, Inc. PPT-020-AnalystMeet-108 82 Appalachia Potential Marcellus Shale Industry Activity • Significant PA activity from extreme SW (Washington Co.) to extreme NE (Susquehanna Co.) • Large and small companies are active – Range, Atlas, Cabot, EOG, Chief, Chesapeake • Vertical & horizont
Slide 83: 2008 Planned Marcellus Shale Activity
EXCO Resources, Inc. PPT-020-AnalystMeet-108 83 Appalachia • 7-10 vertical tests planned 2008 – Successful testing conducted on 4 vertical wells 2007 • 4 horizontal tests planned 2008 – 1st spud in Q2 – Plan to core vertical pilot well – Expected completion by late Q3 • Active leasing program • Disc
Slide 84: Question & Answer
PPT-020-AnalystMeet-108 Question & Answer
Slide 85: Non-GAAP Reconciliations
PPT-020-AnalystMeet-108 Non-GAAP Reconciliations
Slide 86: Non-GAAP Reconciliations: EBITDA and Adjusted EBITDA
EXCO Resources, Inc. PPT-020-AnalystMeet-108 86 Non-GAAP Reconciliations Condensed consolidated EBITDA and adjusted EBITDA reconciliations (Unaudited, in thousands) Three months ended Sept. 30, 2007 Net income (loss) $56,462 Interest expense 36,523 Income tax expense 60,774 Depreciation, depletion a
Slide 87: Annual EBITDA and Adjusted EBITDA Reconciliation
EXCO Resources, Inc. PPT-020-AnalystMeet-108 87 Years Ended December 31 (Unaudited in thousands) 2004 2005 2006 Net income (loss) $ 6.0 $ 1.2 $ 139.0 Interest expense 34.6 46.1 84.9 Income tax expense (benefit) 5.1 (56.1) 89.4 Depreciation, depletion and amortization 28.5 38.8 135.7 EBITDA ( 1) 74.4