Exco Resources Inc · OTC:EXCE
Exco Resources — Investor Presentation (December 2009)
39 slides from Exco Resources's investor presentation, Dec 3, 2009
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation December 2009 PPT-122-NovInvestor.a-11.09
Slide 2: Company Overview
PPT-125-DecInvestor.12.09 Company Overview (1) Significant shale upside with a solid base of conventional assets • 1.2 Tcfe of Proved Reserves – 235 Mmcfe/d of current net production, reserve life of 14.3 years and 68% Proved Developed – 120 Bcfe of shale assets booked as proved with potential for s
Slide 3: Keys to EXCO's Strategy
PPT-125-DecInvestor.12.09 Keys to EXCO’s Strategy Right Assets Right People Right Strategy We have a significant position We have a dedicated, industry We are financially and in two of the most prolific leading technical staff and a operationally positioned resource plays in North America management
Slide 4: Shifting Our Strategy
PPT-125-DecInvestor.12.09 Shifting Our Strategy Execution of our strategy provided the assets for tremendous future growth • Acquisition driven historically – Sought long-life assets with low risk drilling, strong basis, and proximity to markets – Focused on areas with follow-up acquisition opportun
Slide 5: Delivering What We Promise
PPT-125-DecInvestor.12.09 Delivering What We Promise Executing on our 2009 strategic plans Joint venture partner – Joint venture with BG Group positions EXCO for dramatic upstream and midstream growth – Received $1.0 billion of cash and $400 million carry on future deep drilling Asset sales – Closed
Slide 6: Financial Snapshot
PPT-125-DecInvestor.12.09 Financial Snapshot Significant liquidity with tremendous organic growth Remaining 2009 As of September 30, 2009 ($ in thousands) Actual (1) Divestitures (2) Pro Forma (3) Cash $ 125,664 $ (14,500) $ 111,164 Bank debt (L + 175 - 250bps) 1,239,645 (685,000) 554,645 (4) Senior
Slide 7: Joint Venture With BG Group
PPT-125-DecInvestor.12.09 Joint Venture With BG Group Strategic partner with shared vision • Sold 50% interest in Area of Mutual Interest (AMI) – 580 Bcfe of proved reserves and 155 Mmcfe/d within AMI • Cash flow implications – Haynesville development will be accelerated, but capital expenditures wi
Slide 8: Our People
PPT-125-DecInvestor.12.09 Our People Key driver of our future growth • Outstanding growth in technical and support staff – Focus on people has resulted in a tremendous technical staff buildup in the last two years – Technical headcount has increased 70% since January 2008 • Relentless focus on Envir
Slide 9: Industry Outlook
PPT-125-DecInvestor.12.09 Industry Outlook Industry, economic and political conditions support a strong rebound in commodity prices • Advent of shale gas in the US provides more certainty of future supply – Provides visibility of supply in the medium term, promoting more consumption • Government def
Slide 10: Reserve Base
PPT-125-DecInvestor.12.09 Reserve Base Pro forma for BG transaction and 2009 divestiture program(1) Appalachia Proved Reserves = 1.2 Tcfe 3P Reserves = 3.0 Tcfe Proved: 0.3 Tcfe 3P: 0.5 Tcfe 3P+ Reserves = 11.6 – 17.2 Tcfe 3P+: 7.5 – 13.1 Tcfe Current Production = 235 Mmcfe/d Production: 37 Mmcfe/d
Slide 11: 2010 Capital Program
PPT-125-DecInvestor.12.09 2010 Capital Program Total capital program of $471 million is net of $205 million of EXCO drilling and completion capital carried by BG Group 2010 Capital Program by Category 2010 Capital Program by Area Seismic TGGT Holdings cash Midstream call Vernon 7% 7% 2% 19% Corporat
Slide 12: Financial Overview
Financial Overview Investor Presentation December 2009 PPT-122-NovInvestor.a-11.09
Slide 13: Liquidity and Financial Position
PPT-125-DecInvestor.12.09 Liquidity and Financial Position Pro forma for Q4 2009 divestitures Remaining 2009 As of September 30, 2009 ($ in thousands) Actual (1) Divestitures(2) Pro Forma Cash (3) $ 125,664 $ (14,500) $ 111,164 Bank debt (L + 175 - 250bps) 1,239,645 (685,000) 554,645 Senior notes (7
Slide 14: Derivatives Position
PPT-125-DecInvestor.12.09 Derivatives Position NYMEX Contract Contract Equivalent Contract natural gas price per NYMEX oil price per Per day price per Percent (in thousands, except price) Mmbtu Mmbtu Bbls Bbl Hedged Equivalent hedged (1) Q4 2009 23,450 8.08 398 80.66 280.9 8.58 112% 2010 66,298 7.62
Slide 15: Production Profile and Proved Reserve Growth
PPT-125-DecInvestor.12.09 Production Profile and Proved Reserve Growth Projected Average Production Midpoint 1,400 1,200 1,000 800 600 400 200 - 2010E 2011E 2012E 2013E 2014E Base Conventional Wedge Haynesville Wedge Marcellus Wedge Proved Reserves (Tcfe) 2010E 2011E 2012E 2013E 2014E Low 1.7 3.0 4.
Slide 16: Net Asset Value Summary
PPT-125-DecInvestor.12.09 Net Asset Value Summary In millions, except per share and per unit Low Case High Case E&P Proved Reserves - 1.2 Tcfe at $2.00 & $2.50 per Mcfe $ 2,448 $ 3,060 (1) Unproved Reserves (Conventional) - 1.3 Tcfe at $.20 & $.40 per Mcfe 266 532 Unproved Reserves (Haynesville) - 2
Slide 17: EXCO Trading Multiples Valuation Analysis
PPT-125-DecInvestor.12.09 EXCO Trading Multiples(1) Valuation Analysis XCO Share $ XCO Peer Average at Peer Average Share Price (11-2-09) $ 15.35 Market Cap (11-2-09) $ 3,249 Enterprise Value (11-2-09) $ 4,137 Current Proved Reserves (Bcfe) 1,224 Current Production (Mmcfe/d) 235 (2) EBITDA 2010 $ 66
Slide 18: Peer Valuation Comparison
PPT-125-DecInvestor.12.09 Peer Valuation Comparison Valuation Analysis Enterprise Value / Current Proved Reserves¹ Enterprise Value / Daily Production Q3 Actuals¹ $7.48 $7.40 $22,192 $20,540 $20,269 $20,116 $5.31 $17,606 $17,466 $3.80 $3.38 $2.55 XCO Avg SWN HK RRC COG XCO Avg RRC SWN HK COG Enterpr
Slide 19: Asset Overview
Asset Overview Investor Presentation December 2009 PPT-122-NovInvestor.a-11.09
Slide 20: Asset Overview
PPT-125-DecInvestor.12.09 Asset Overview Strong asset base with outstanding growth potential • Haynesville and Marcellus shales – Primary driver of our growth and future potential – Focus of our capital and technical resources • Non-shale assets with significant price-contingent upside – Vernon fiel
Slide 21: East Texas / North Louisiana
PPT-125-DecInvestor.12.09 East Texas / North Louisiana Division Overview Portfolio Highlights Producing wells: 1,380 gross / 769 net Reserves Locations Bcfe Gross Net PD 551 PUD 266 378 166 Total Proved 817 Probable 309 296 158 Possible 1,261 915 255 3P 2,387 1,589 579 Potential 1,403 1,468 541 Tota
Slide 22: Haynesville Shale
PPT-125-DecInvestor.12.09 Haynesville Shale Asset Overview Field Highlights Producing horizontal wells: 23 gross / 6 net Average WI: ~30% Average NRI: ~23% Reserves Locations Bcfe Gross Net PD 39 PUD 81 39 11 Total Proved 120 Probable 71 43 10 Possible 1,016 677 137 3P 1,207 759 158 Potential 1,092
Slide 23: Haynesville Development History
PPT-125-DecInvestor.12.09 Haynesville Development History Measured ramp up to achieve excellence – Test and hold acreage Vertical – Determine best landing zone Program – Determine best completion technique Explore – Evaluate rock properties Core – Determine gas in place and reserve recovery Analysis
Slide 24: Haynesville Assets and Efforts
PPT-125-DecInvestor.12.09 Haynesville Assets and Efforts • ~52,500 net Haynesville acres – Actively working to acquire 14,000 – 15,000 net acres to the joint venture – Significant additional opportunities continue to be identified • 2009 Haynesville activity – Initiate drilling of 42 operated horizo
Slide 25: Haynesville Operations Snapshot
PPT-125-DecInvestor.12.09 Haynesville Operations Snapshot • Production: 213 Mmcf/d gross, 40.7 Mmcf/d net on 10/16/2009 – Operated: 160.2 Mmcf/d gross, 37 Mmcf/d net – OBO: 52.6 Mmcf/d gross, 3.7 Mmcf/d net – Cumulative gross Haynesville production: 24.3 Bcfe • Drilling: 11 operated horizontal rigs
Slide 26: EXCO Operated Horizontal Haynesville Shale Production
PPT-125-DecInvestor.12.09 EXCO Operated Horizontal Haynesville Shale Production Currently 18 wells producing; nine completions expected in Q4 2009 with an additional 24 completions in Q1 2010 EXCO Haynesville Production East Texas / North Louisiana 200,000 180,000 185 Mmcf/d Gross Production 160,000
Slide 27: Industry Best IP Rates Through September 2009
PPT-125-DecInvestor.12.09 Industry Best IP Rates Through September 2009 31,000 • Initial production rates Top 25 Haynesville Shale IP’s reported on 165 wells across the Haynesville 29,000 shale play 27,000 25,000 • EXCO’s track record – 4 of the top 6 23,000 – 11 of the top 25 – 15 of the top 39 21,
Slide 28: Haynesville Horizontal Production Curves
PPT-125-DecInvestor.12.09 Haynesville Horizontal Production Curves Consistent results outperforming original estimate and peers 28
Slide 29: Drilling and Completion Costs
PPT-125-DecInvestor.12.09 Drilling and Completion Costs Realizing significant improvements in well costs with more to come Haynesville Horizontals - Days vs Depth 1st Three Haynesville Wells • Cost reductions primarily Mid Three Haynesville Wells Last Three Haynesville Wells due to decreased drillin
Slide 30: Bossier
PPT-125-DecInvestor.12.09 Bossier The next frontier Top Bossier +/- 10,000’ Top Haynesville +/- 11,500’ Top Limestone +/- 11,900’ • Potential net gas in place on the JV acreage is ~17 Tcf • Recovery factor to be determined 30
Slide 31: EXCO Midstream Operations
PPT-125-DecInvestor.12.09 EXCO Midstream Operations East Texas / North Louisiana – Positioned for growth • Finalized first stage of 36 inch diameter Haynesville header system • Adding high pressure flow lines to gather production; all of our operated wells continue to flow to sales during initial te
Slide 32: Appalachia
PPT-125-DecInvestor.12.09 Appalachia Division Overview Portfolio Highlights Producing wells: 6,189 gross / 5,620 net Reserves Locations Devonian Sands & Shale Bcfe Gross Net PD 237 PA PUD 96 771 762 Total Proved 333 OH Probable 88 641 604 Possible 76 713 602 3P 497 2,125 1,968 Potential 6,992 - 12,6
Slide 33: Marcellus Opportunity
PPT-125-DecInvestor.12.09 Marcellus Opportunity • Largest areal extent of the major Marcellus Fairway shale plays – EXCO has 348,000 net acres in the play • Approximately 223,000 net acres in the over-pressured Marcellus Fairway fairway • 70% of acreage is HBP PA • Key PA average WI 100%, OH average
Slide 34: Marcellus Development Strategy
PPT-125-DecInvestor.12.09 Marcellus Development Strategy Identified six distinct geologic regions Marcellus Leasehold Geologic Regions of the Marcellus • Southwest – 53,000 net acres • Southeast – 18,000 net acres • Central – 69,000 net acres N NE • North – 41,000 net acres NW • Northeast – 42,000 n
Slide 35: Marcellus Development Strategy
PPT-125-DecInvestor.12.09 Marcellus Development Strategy Measured ramp up to achieve excellence – Test and hold acreage Vertical – Determine best landing zone Program – Determine best drilling and completion practices for each area – Evaluate rock properties Core Explore – Determine gas in place and
Slide 36: Current Marcellus Activity
PPT-125-DecInvestor.12.09 Current Marcellus Activity Preparing to implement horizontal program • Drill to test the play: – Obtain additional reservoir data (core, 2009 Drilling Program pressure data, etc.) – Test drilling, completion, and production techniques – Identify horizontal drilling targets
Slide 37: Development Issues
PPT-125-DecInvestor.12.09 Development Issues Identifying solutions to potential development issues • Land – 70% HBP allows us to dictate pace of development – Holding our limited term acreage through timely drilling • Size of play – “Plays within the Play” requires regional delineation efforts – Foc
Slide 38: Forward Looking Statements
PPT-125-DecInvestor.12.09 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, among other things, the
Slide 39: Forward Looking Statements (continued)
PPT-125-DecInvestor.12.09 Forward Looking Statements (continued) 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 caution
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