Slide 1: Investor Presentation March 2008
PPT-025-InvestrPres_0308 Investor Presentation March 2008
Slide 2: Disciplined Growth Strategy
EXCO Resources, Inc. 2 PPT-025-InvestrPres_0308 Disciplined Growth Strategy EXCO’s formula for creating equity value enables us to deliver strong, sustainable equity returns over the long term
Slide 3: Key Investment Highlights
EXCO Resources, Inc. 3 PPT-025-InvestrPres_0308 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) – 2.1 Tcfe proved reserves – 2.5 Tc
Slide 4: Inventory for the Future
EXCO Resources, Inc. 4 PPT-025-InvestrPres_0308 Inventory for the Future Includes over 20,000 drilling locations and 10.9 Tcfe of reserves Appalachia 5,000+ 6,000 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 Appalachi
Slide 5: Undrilled, Low-Risk Upside Totals Approximately 3.1 Tcfe
EXCO Resources, Inc. 5 PPT-025-InvestrPres_0308 Rockies Permian Basin East Texas / North Louisiana Undrilled, Low-Risk Upside Totals Approximately 3.1 Tcfe PUD Reserves = 611 Bcfe PRB Reserves = 827 Bcfe POS Reserves = 1,644 Bcfe 226 Bcfe • Lance, Fort Union, Tensleep, Frontier, Mesa Verde formation
Slide 6: Estimated Unbooked Potential Totals approximately 7.8 Tcfe
EXCO Resources, Inc. 6 PPT-025-InvestrPres_0308 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 7: Year End Total Proved Reserves
EXCO Resources, Inc. 7 PPT-025-InvestrPres_0308 Year End Total Proved Reserves Year-end 2007 SEC Proved Reserves(1) 1,865 Price Revisions to $8 gas and $60 oil(2) 37 Year-end 2007 Proved Reserves 1,902 Appalachia Acquisition(3) (closed 2/20/08) 159 Pro Forma with Appalachia Acquisition 2,061 • Year-
Slide 8: Total Reserves & Well Summary
EXCO Resources, Inc. 8 PPT-025-InvestrPres_0308 East TX / North LA Appalachia Mid-Continent Permian Rockies Total Reserves & Well Summary: Proved Reserves(1) (Bcfe) 1,005 584 316 144 12 2,061 Total Reserves(2 ) (Bcfe) 2,333 1,160 468 339 233 4,533 Potential (Bcfe) 388 6,000 100 299 1,000 7,787 Total
Slide 9: 2008 Upside Evaluation and Development
EXCO Resources, Inc. 9 PPT-025-InvestrPres_0308 2008 Upside Evaluation and Development • Appalachia - Shale – In the Marcellus shale, we hold 368,000+ net acres with 198,000+ net acres in the fairway of the play; our holdings could contain approximately 6 Tcfe of reserves(1), significantly above pre
Slide 10: Marcellus Shale Interval Thickness
EXCO Resources, Inc. 10 PPT-025-InvestrPres_0308 Marcellus Shale Interval Thickness EXCO Current Fairway Acreage as of 3-3-08 220,481 Gross 198,835 Net
Slide 11: 2008 Capital Program
EXCO Resources, Inc. 11 PPT-025-InvestrPres_0308 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 80 346 1 22 8 89 Mid-C
Slide 12: 2007 Corporate Highlights
EXCO Resources, Inc. 12 PPT-025-InvestrPres_0308 2007 Corporate Highlights • Significant growth in all financial and operational metrics: • Significant growth in low-risk upside: • Identified 4.4 Tcfe of potential, including our original estimate of 2.6 Tcfe in the Marcellus Shale • Total Marcellus
Slide 13: Operational Highlights 4th Quarter 2007 and early 2008
EXCO Resources, Inc. 13 PPT-025-InvestrPres_0308 Operational Highlights 4th Quarter 2007 and early 2008 • East Texas / North Louisiana – Vernon (Jackson Parish, LA) – Drilled and completed 10 wells with average IP of 6.5 Mmcfe/d (gross) – Last completion had highest rate since EXCO acquisition – 10.
Slide 14: Operational Highlights 4th Quarter 2007 and early 2008
EXCO Resources, Inc. 14 PPT-025-InvestrPres_0308 Operational Highlights 4th Quarter 2007 and early 2008 • Permian (Irion County, TX) – Sugg Ranch (Irion County, TX) – Increased rig count to three and increased net production from 19.7 on November 1, 2007 to 25.1 Mmcfe/d on February 25, 2008 (include
Slide 15: Operational Highlights: Appalachia
EXCO Resources, Inc. 15 PPT-025-InvestrPres_0308 • Appalachia • Acquisitions – Closed $16 million acquisition of 300 producing wells, 100+ drilling locations, 2 Mmcfe/d of production and 14.4 Bcfe of 3P reserves (12.4 proved) in Central Pennsylvania in November 2007 – Closed $388 million acquisition
Slide 16: Liquidity and Financial Position
EXCO Resources, Inc. 16 PPT-025-InvestrPres_0308 Liquidity and Financial Position (1) Excl udes unamortized bond premium (2) Excl udes $7 million in offering costs (3) Net of $4.3 million in letters of credit at both December 31, 2007 and Februar y 20, 2008 (In thousands) December 31, 2007 February
Slide 17: Current Hedge Position
EXCO Resources, Inc. 17 PPT-025-InvestrPres_0308 Current Hedge Position Mitigates market risk and locks in future cash flow for development and acquisition program • Target hedging 65-80% of production volumes for 3-5 years • Hedging program covers long term debt • Only 13% of Proved Reserves hedged
Slide 18: 2008 Guidance
EXCO Resources, Inc. 18 PPT-025-InvestrPres_0308 2008 Guidance 2008E ($ in thousands, except per unit amounts) Low High Production: Oil – Mbbls 1,980 2,020 Gas - Mmcf 131,900 135,000 Mmcfe 143,800 147,100 Per day - Mmcfe 393 402 Differentials to NYMEX: Oil per Bbl ($3.75) ($3.50) Gas per Mcf 93% 97%
Slide 19: Net Asset Value Summary
EXCO Resources, Inc. 19 PPT-025-InvestrPres_0308 Net Asset Value Summary In millions, except per share and per unit Low High Proved Reserves 2.1 Tcfe at $2.50 to $3.00 per Mcfe $5,153 $6,183 Low-risk Unproved Upside 2.5 Tcfe at $0.50 to $0.75 per Mcfe 1,236 1,854 Potential Upside 7.8 Tcfe - - Midstr
Slide 20: Regional Overviews
PPT-025-InvestrPres_0308 Regional Overviews
Slide 21: East Texas/North Louisiana Division Overview
EXCO Resources, Inc. 21 PPT-025-InvestrPres_0308 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 22: East Texas/North Louisiana Low-risk and Potential Upside
EXCO Resources, Inc. 22 PPT-025-InvestrPres_0308 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
Slide 23: Appalachia Division Overview
EXCO Resources, Inc. 23 PPT-025-InvestrPres_0308 Appalachia Division Overview Portfolio Highlights Marcellus Activity Silurian Clinton-Medina Sands Devonian Sands & Shale Reserves Locations Bcfe Gross / Net PD 372 PUD 212 1,649 / 1,467 TP 584 Prob 167 581 / 498 Poss 409 3,931 / 3,496 3P 1,160 8,165
Slide 24: Appalachia Low-risk and Potential Upside
EXCO Resources, Inc. 24 PPT-025-InvestrPres_0308 Appalachia Central PA 388,029 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 324,425 net acres 97
Slide 25: Appalachia Potential Marcellus Shale Industry Activity
EXCO Resources, Inc. 25 PPT-025-InvestrPres_0308 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 & horizon
Slide 26: Mid-Continent Area Division Overview
EXCO Resources, Inc. 26 PPT-025-InvestrPres_0308 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 3
Slide 27: Mid-Continent Low Risk and Potential Upside
EXCO Resources, Inc. 27 PPT-025-InvestrPres_0308 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 •
Slide 28: Permian Basin Division Overview
EXCO Resources, Inc. 28 PPT-025-InvestrPres_0308 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 1,38
Slide 29: Permian Low-risk and Potential Upside
EXCO Resources, Inc. 29 PPT-025-InvestrPres_0308 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 •
Slide 30: Rocky Mountains Overview
EXCO Resources, Inc. 30 PPT-025-InvestrPres_0308 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 31: Rocky Mountains Low-risk and Potential Upside
EXCO Resources, Inc. 31 PPT-025-InvestrPres_0308 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 32: Appendix
PPT-025-InvestrPres_0308 Appendix
Slide 33: Operating Results
EXCO Resources, Inc. 33 PPT-025-InvestrPres_0308 Operating Results Period-to-Period Change 4th Quarter Twelve Months 4th Quarter Twelve Months (In thousands) 2006 2007 2006 2007 Amount Percent Amount Percent Revenues and other income: Oil $ 16,778 $ 41,391 $ 57,043 $ 117,073 $ 24,613 147% $ 60,030 1
Slide 34: Unit Operating Statistics
EXCO Resources, Inc. 34 PPT-025-InvestrPres_0308 Unit Operating Statistics (1) Does not include the effects of derivative financial instruments (2) Does not include stock based compensation which would hav e increased operating costs per Mcfe by $0.06 and $0.03 f or Q4 2007 and f or the full year 20
Slide 35: Year End 2007 Reserve Detail
EXCO Resources, Inc. 35 PPT-025-InvestrPres_0308 Oil (Mbbls) Natural Gas (Mmcf) Equivalent (Mmcfe)(1) December 31, 2006 16,155 1,126,602 1,223,532 Purchase of reserves in place 10,500 770,567 833,567 New discoveries and extensions 2,469 178,248 193,062 Revisions of previous estimates (188) (78,647)
Slide 36: Quarterly 2008 Guidance
EXCO Resources, Inc. 36 PPT-025-InvestrPres_0308 Quarterly 2008 Guidance 1st Q 2008E 2ndQ 2008E 3rdQ 2008E 4thQ 2008E ($ 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 31,800 32,300 32,600 33,400 33,300 34
Slide 37: Non-GAAP Reconciliations
EXCO Resources, Inc. 37 PPT-025-InvestrPres_0308 Non-GAAP Reconciliations (Unaudited in thousands) Three months ended December 31, 2006 Three months ended December 31, 2007 Year ended December 31, 2006 Year ended December 31, 2007 Cash flow from operations, GAAP $ 54,765 $ 197,531 $ 227,659 $ 577,82
Slide 38: Non-GAAP Reconciliations
EXCO Resources, Inc. 38 PPT-025-InvestrPres_0308 Non-GAAP Reconciliations (Unaudited, in thousands) Three months ended December 31, 2006 Three months ended December 31, 2007 Year ended December 31, 2006 Year ended December 31, 2007 Net income (loss) $ (966) $ (1,995) $ 138,954 $ 49,656 Interest expe
Slide 39: Non-GAAP Reconciliations
EXCO Resources, Inc. 39 PPT-025-InvestrPres_0308 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” r
Slide 40: Forward Looking Statements
EXCO Resources, Inc. 40 PPT-025-InvestrPres_0308 Forward Looking Statements This pres entation c ontains forward-looki ng statements, as defi ned in Secti on 27A of the Sec urities Ac t and Section 21E of the Securities Exchange Act of 1934, or the Exc hange Act. T hes e forwar d-looking statements
Slide 41: Forward Looking Statements (continued)
EXCO Resources, Inc. 41 PPT-025-InvestrPres_0308 Forward Looking Statements (continued) 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 predict, or over which we have no