Exco Resources Inc · OTC:EXCE
Exco Resources — Investor Presentation (October 2008)
31 slides from Exco Resources's investor presentation, Oct 15, 2008
Slide 1: EXCO's State of the Company and Corporate Governance Discussion
PPT-058-CorpGovnc _10-15-08 EXCO’s State of the Company and Corporate Governance Discussion New York, NY October 15, 2008
Slide 2: Forward Looking Statements
EXCO Resources, Inc. 2 PPT-058-CorpGovnc _10-15-08 Forward Looking Statements This presentation contains forward-looking statements, as defined in Section 27A of the Securities Ac t and Section 21E of the Securities Exchange Act of 1934, or the Exchange Act. These forward-looking statements relate t
Slide 3: Forward Looking Statements (continued)
EXCO Resources, Inc. 3 PPT-058-CorpGovnc _10-15-08 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
Slide 4: Agenda
EXCO Resources, Inc. 4 PPT-058-CorpGovnc _10-15-08 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 Gov
Slide 5: Key Investment Highlights
EXCO Resources, Inc. 5 PPT-058-CorpGovnc _10-15-08 Key Investment Highlights • Outstanding Track Record – 40+% annualized growth in common share Net Asset Value since 1998 – 84%and 75% compounded growth rates in production and reserves since 2005 • Outstanding Reserve Base(1) – 2.2 Tcfe proved reser
Slide 6: Financial Review
PPT-058-CorpGovnc _10-15-08 Financial Review Steve Smith
Slide 7: Results of Operations
EXCO Resources, Inc. 7 PPT-058-CorpGovnc _10-15-08 Results of Operations ($ in Millions) Year Ended December 31, 2006 Year Ended December 31, 2007 Six Months Ended June 30, 2008 Second Half 2008 Guidance Midpoint(4) Estimated Full Year 2008 Oil and natural gas revenues (before effects of derivative
Slide 8: Liquidity and Financial Position
EXCO Resources, Inc. 8 PPT-058-CorpGovnc _10-15-08 Liquidity and Financial Position (1) Excludes unamortized bond premium (2) Excludes $7.7 million in offering costs (3) Book equity as of August 31, 2008 (4) Net of $3.9 and $4.5 million in letters of credit at June 30, 2008 and October 10, 2008 (in
Slide 9: Liquidity Measures
EXCO Resources, Inc. 9 PPT-058-CorpGovnc _10-15-08 Liquidity Measures • Borrowing Base Reaffirmation – Current consolidated borrowing base is $2.475 billion – Potential borrowing base is approximately $2.8 billion – EXCO has received verbal reaffirmation of current $2.475 billion borrowing base; exp
Slide 10: Current Consolidated Hedge Positions
EXCO Resources, Inc. 10 PPT-058-CorpGovnc _10-15-08 Current Consolidated Hedge Positions As of September 30, 2008 NYMEX Swaps Gas Mmcf Contract price per Mmcf Oil Mbbls Contract price per Bbl Percent Hedged(1) Q3 2008 26,910 $ 8.29 388 $ 72.18 81% Q4 2008 26,910 8.39 450 78.58 82% 2009 100,530 8.18
Slide 11: Management Team
EXCO Resources, Inc. 11 PPT-058-CorpGovnc _10-15-08 Management Team Doug Miller Chairman & Chief Executive Officer Donna Sablotny Executive Assistant Nancy DeVinny Executive Assistant Doug Ramsey VP & Chief Financial Officer Jane Smith Executive Assistant Hal Hickey VP & Chief Operating Officer Mado
Slide 12: EXCO Snapshot
EXCO Resources, Inc. 13 PPT-058-CorpGovnc _10-15-08 EXCO Snapshot Our production and reserves have doubled since late 2006 (1) SEC 12/31/06 total proved reserves, at $5.64/Mcf spot natural gas price and $60.82/Bbl spot oil price, adjusted for historical differentials and excluding hedge effects (2)
Slide 13: EXCO Areas of Operation
EXCO Resources, Inc. 14 PPT-058-CorpGovnc _10-15-08 EXCO Areas of Operation Four major operating divisions Wyoming Acreage Mocane Laverne Watonga Chickasha Golden Trend Longwood / Waskom Vernon Holly / Caspiana Gladewater Tyler Area Sugg Ranch Ackerly Northern WV Eastern OH Northwestern PA Central P
Slide 14: Long Reserve Life and Multi-Year Project Inventory Across All Regions
EXCO Resources, Inc. 16 PPT-058-CorpGovnc _10-15-08 Long Reserve Life and Multi-Year Project Inventory Across All Regions As of June 30, 2008(1) (1) Pro forma for Appalachia and East Texas acquisitions (2) Haynesville shale acreage is subset of East TX / North LA acreage (3) Appalachia shale acreage
Slide 15: Haynesville / Bossier Shale
EXCO Resources, Inc. 17 PPT-058-CorpGovnc _10-15-08 Haynesville / Bossier Shale We believe our East Texas/North Louisiana assets contain 2 - 6 Tcfe of potential shale reserves EXCO acreage in areas shaded yellow Total Haynesville shale acreage – 142,000 gross – 120,000 net • 2008 Haynesville plans –
Slide 16: EXCO Midstream Operations
EXCO Resources, Inc. 18 PPT-058-CorpGovnc _10-15-08 EXCO Midstream Operations East Texas / North Louisiana – Positioned for growth • Q2 2008 EBITDA - $12 million • 2009E EBITDA $50 - $60 million Talco and Vernon Systems • 779 miles of gathering lines supported by long-term contracts with producers •
Slide 17: Marcellus and Huron Shale Fairways
EXCO Resources, Inc. 19 PPT-058-CorpGovnc _10-15-08 Marcellus and Huron Shale Fairways We believe our Appalachian Division assets contain 7 - 12 Tcfe of potential shale reserves EXCO acreage in counties shaded yellow Marcellus • Total Marcellus shale acreage – 443,000 gross – 395,000 net • Marcellus
Slide 18: 2008 Capital Program
EXCO Resources, Inc. 20 PPT-058-CorpGovnc _10-15-08 2008 Capital Program Area Gross Wells (#) Drilling & Completion (Net $ MM) Exploitation (Net $ MM) Land (Net $ MM) Operations & Other (Net $ MM) Total 2008 Capital Forecast (Net $ MM)(1) EXT/NLA Cotton Valley 141 $297 $26 $10 $58 $391 Haynesville/B
Slide 19: Corporate Governance
PPT-058-CorpGovnc _10-15-08 Corporate Governance Doug Ramsey
Slide 20: Board Composition
EXCO Resources, Inc. 22 PPT-058-CorpGovnc _10-15-08 Board Composition • Experience – Average 29 years of collective business experience • 11 Member Board – 2 inside directors, 9 outside directors • High Ownership by Directors – 35.4% of common stock owned by directors • Independence – 8 of 9 outside
Slide 21: Board Members
EXCO Resources, Inc. 23 PPT-058-CorpGovnc _10-15-08 Board Members • Independent Directors – Jeff Benjamin, 47 • Senior Advisor to Cyrus Capital Partners, LP – Vince Cebula, 44 • Managing Director, Jefferies Capital Partners – Earl Ellis, 67 • Chairman and CEO, Whole Harvest Products • Former Managin
Slide 22: Board Members continued
EXCO Resources, Inc. 24 PPT-058-CorpGovnc _10-15-08 Board Members continued • Other Outside Director – Boone Pickens, 80 • Chairman and CEO, BP Capital LP • Inside Directors – Doug Miller, 61 • Chairman and CEO, EXCO Resources, Inc. • Former Chairman and CEO of Coda Energy, Inc. – Steve Smith, 67 •
Slide 23: Corporate Governance
EXCO Resources, Inc. 25 PPT-058-CorpGovnc _10-15-08 Corporate Governance • ISS Corporate Governance Quotient (CGQ) at October 8, 2008 – Outperform 83.6% of the Russell 3000 – Outperform 76.2% of the Energy group • Corporate Governance Enhancements Completed in 2007 – Minimum 1 year performance perio
Slide 24: Ownership Table
EXCO Resources, Inc. 26 PPT-058-CorpGovnc _10-15-08 Ownership Table As of October 10, 2008 Executive Position Direct 0’Affiliated(2) Total 0’%(3) Granted Vested Doug Miller Chairman and CEO 4,563,782 0 4,563,782 2.2% 1,845,000 1,755,000 Steve Smith Vice Chairman and President 577,512 0 577,512 0.3%
Slide 25: Board Compensation
EXCO Resources, Inc. 27 PPT-058-CorpGovnc _10-15-08 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
Slide 26: Management Compensation
EXCO Resources, Inc. 28 PPT-058-CorpGovnc _10-15-08 Management Compensation Executive Position Current Base Salary Bonus at 2007 Annualized Rate of 20%(1) No. of Options Granted Value of Options(2) Doug Miller Chairman and CEO $800,000 $160,000 1,845,000 $0 Steve Smith Vice Chairman and President $6
Slide 27: Stock Options
EXCO Resources, Inc. 29 PPT-058-CorpGovnc _10-15-08 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
Slide 28: Employee Benefits
EXCO Resources, Inc. 30 PPT-058-CorpGovnc _10-15-08 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 co
Slide 29: Non-GAAP Reconciliations
EXCO Resources, Inc. 32 PPT-058-CorpGovnc _10-15-08 Non-GAAP Reconciliations (Unaudited in thousands) Year ended December 31, 2006 Year ended December 31, 2007 Six months ended June 30, 2008 Cash flow from operations, GAAP $ 227,659 $ 577,829 $ 512,234 Net change in working capital (21,226) 36,139 3
Slide 30: Non-GAAP Reconciliations
EXCO Resources, Inc. 33 PPT-058-CorpGovnc _10-15-08 Non-GAAP Reconciliations (in thousands, except per share) Year ended December 31, 2006 Year ended December 31, 2007 Six months ended June 30, 2008 Net income (loss), GAAP $ 138,954 $ 49,656 $ (425,753) Adjustments: Non-cash mark-to-market (gains) l
Slide 31: Non-GAAP Reconciliations
EXCO Resources, Inc. 35 PPT-058-CorpGovnc _10-15-08 Non-GAAP 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. “Adjusted EBITDA
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