Slide 1: 3rd Quarter 2006 Review
3 rd Quarter 2006 Review November 1, 2006
Slide 2: Management Participants
Management Participants Doug Miller Chairman and CEO Steve Smith Vice Chairman and President Doug Ramsey Vice President, CFO and CAO Hal Hickey Vice President and COO Paul Rudnicki Vice President
Slide 3: Agenda
Agenda Introduction Doug Miller Forward-looking statement Doug Ramsey Highlights Doug Miller Financial Review Steve Smith Doug Ramsey Operational Review Hal Hickey Questions and Answers All Management Participants
Slide 4: Forward Looking Statements
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 following: • our future f
Slide 5: Forward Looking Statements (continued)
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 cautioned not to place undue reli
Slide 6: 3rd Quarter 2006 Highlights
EXCO Resources, Inc. 3 rd Quarter 2006 Highlights (1) Includes the first 44 days of production from TXOK Acquisition, Inc. (2) Net income (loss) from continuing operations (3) Net income from continuing operations per share – diluted, excluding the after-tax effects of the non-cash change in fair va
Slide 7: 3rd Quarter 2006 Financial Review
3 rd Quarter 2006 Financial Review
Slide 8: Operating Results
(1) Includes the first 44 days of production from TXOK Acquisition, Inc. (2) Excludes $52,602 of derivative termination expense in Q1 2005 (3) Excludes $698 and $2,427 of stock option compensation expense in Q3 2006 and the first nine months of 2006, respectively (4) Non-GAAP measures, please see ta
Slide 9: Unit Operating Statistics
EXCO Resources, Inc. Unit Operating Statistics (1) Includes the first 44 days of production from TXOK Acquisition, Inc. (2) Does not include the effects of derivative financial instruments 2005 2006 2005 Pro Forma 2006 (1) Amount Percent Amount Percent Production volumes: Oil - Mbbls 122 241 372 649
Slide 10: Pro Forma Operating Results
EXCO Resources, Inc. Pro Forma Operating Results (1) Excludes $2,427, $35, and $2,462 of stock option compensation expense as reported, for the TXOK 44 day period, and pro forma, respectively (2) Non-GAAP measures, please see tables on slides 27 -29 for reconciliations to most comparable GAAP measur
Slide 11: Pro Forma Unit Operating Statistics
EXCO Resources, Inc. Pro Forma Unit Operating Statistics (1) Does not include effects of derivative financial instruments As Reported TXOK 44 Day Period Pro Forma Production volumes: Oil - Mbbls 611 3 8 649 Gas - Mmcf 27,637 1,890 29,527 Total - Mmcfe 31,303 2,118 33,421 Realized pricing (1) : Oil p
Slide 12: Liquidity and Financial Position
EXCO Resources, Inc. Liquidity and Financial Position (1) Excludes unamortized bond premium (In thousands) September 30, 2006 October 27, 2006 Cash 19,274 $ 41,420 $ Debt: Bank debt 404,000 $ 905,000 $ Second lien - 650,000 Senior notes (1) 444,720 444,720 Total debt 848,720 1,999,720< /font> $ Shar
Slide 13: Liquidity and Financial Position (EXCO Resources and EXCO Partners)
EXCO Resources, Inc. Liquidity and Financial Position (1) Excludes unamortized bond premium (In thousands) EXCO Resources EXCO Partners Total Cash 21,887 $ 19,533 $ 41,420 $ Debt: Bank debt 254,000 $ 651,000 $ 905,000 $ Second lien - 650,000 650,000 Senior notes (1) 444,720 - 444,720 Total debt 698,
Slide 14: Derivatives Summary – Total Pro Forma
EXCO Resources, Inc. Derivatives Summary – Total Pro Forma as of September 30, 2006 including assumed Winchester derivatives (In thousands, except prices) Q4 2006 2,640 6.26 $ 27 50.35 $ 2,640 9.48 $ 27 60.00 $ Floor Ceiling Weighted average contract price per Mmbtu Weighted average contract price p
Slide 15: Derivatives Summary – Excluding EXCO Partners, LP
EXCO Resources, Inc. Derivatives Summary – Excluding EXCO Partners, LP Pro Forma as of September 30, 2006 Q4 2006 5,021 7.88 $ 552 (0.48) $ 157 71.10 $ 2007 19,837 8.04 - - 649 69.92 2008 16,578 8.19 - - 271 62.75 2009 4,139 6.43 - - 73 60.80 2010 3,780 5.99 - - 65 59.85 2011 1,825 4.51 - - - - 2012
Slide 16: EXCO Partners, LP Derivatives Summary
EXCO Partners, LP Derivatives Summary Pro Forma as of September 30, 2006 including assumed Winchester derivatives (In thousands, except prices) Q4 2006 2,640 6.26 $ 11 50.35 $ 2,640 9.48 $ 11 60.00 $ Gas volume - Mmbtus Oil volume - Bbls Floor Weighted aver age contract price per Bbl Weighted averag
Slide 17: 3rd Quarter 2006 Operational Review
3 rd Quarter 2006 Operational Review
Slide 18: Snapshot
EXCO Resources, Inc. Snapshot (1) SEC 12/31/05 total proved reserves, pro forma for the TXOK acquisition using SEC 12/31/05 total proved reserves (2) SEC 12/31/05 total proved reserves, pro forma for the TXOK acquisition using SEC 12/31/05 total proved reserves, and including proved reserves based o
Slide 19: Winchester Acquisition
EXCO Resources, Inc. Winchester Acquisition Closed acquisition of Winchester Energy Company, Ltd. for $1.1 billion on October 2, 2006 May 1, 2006 effective date Located in Cotton Valley, Hosston and Travis Peak trends in East Texas and North Louisiana Production of approximately 72.0 Mmcfe per day f
Slide 20: 3rd Quarter 2006 Acquisitions
EXCO Resources, Inc. 3 rd Quarter 2006 Acquisitions EXCO closed two noteworthy acquisitions in the third quarter 2006, spending $76.6 million after contractual adjustments Added production and acreage in West Virginia and Wyoming In West Virginia, EXCO spent $49.1 million (after contractual adjustme
Slide 21: Current Snapshot
EXCO Resources, Inc. CurrentSnapshot (1) As of 10/15/06 (2) SEC 12/31/05 total proved reserves, pro forma for the TXOK acquisition using SEC 12/31/05 total proved reserves, and including proved reserves based on NYMEX strip pricing as of the effective date of acquisitions closed thru 9/30/06, exclud
Slide 22: Diversified Reserve Base
EXCO Resources, Inc. Diversified Reserve Base Total pro forma 3P reserves (1)(2) = 1,960 Bcfe Total pro forma proved reserves (1) = 1,313 Bcfe Appalachia 465.6 Bcfe Proved (35%) 569.9 Bcfe Total (29%) 46.0 Mmcfe/d (22%) East Texas / North Louisiana 582.4 Bcfe Proved (44%) 942.7 Bcfe Total (48%) 106.
Slide 23: Drilling Activity thru 3rd Quarter 2006
EXCO Resources, Inc. Drilling Activity thru 3 rd Quarter 2006 Total of 124 wells were spud in the third quarter (1) Includes full year activity for TXOK (2) Five of the wells completed in 2006 were drilled in 2005 Budgeted Drill Wells Wells Spud Wells Drilling Awaiting Completion Completed (2 ) Dry
Slide 24: 2006 Capital Budget
EXCO Resources, Inc. 2006 Capital Budget (1) (1) Includes a full year of TXOK budgeted capital Number of Wells /Projects Budget ($MM) Original D rilling B udget 286 13 4 Q1 – Q2 Acquisitions 111 39 Q3 Acquisitions 4 1 Winchester A cquisition 1 9 30 D rilling Total 420 204 Exploitation P rojects 184
Slide 25: 2006 Capital Budget Overview
EXCO Resources, Inc. 2006 Capital Budget Overview (1) Pro Forma Drilling and Exploitation by Region $213 million $27mm $30mm $7mm $49mm $100mm (1) Does not include $30 million of operations, IT and other corporate capital; does not include spending for Winchester acquisition Rockies & Other 3% Mid-C
Slide 26: Questions and Answers
Questions and Answers EXC EXCO Resources. Inc.
Slide 27: Non-GAAP Reconciliations: Operating Cash Flow
Non-GAAP Reconciliations Reconciliation of condensed consolidated cash flow from operating activities (Unaudited, in thousands) 2005 2006 2005 2006 Net cash provided by (used in) operating activities 2,845 $ 30,220 $ (80,844) $ 172,894 $ Net change in working capital 25,597 26,688 18,027 (20,750) Ne
Slide 28: Non-GAAP Reconciliations: EBITDA and Adjusted EBITDA
Non-GAAP Reconciliations Condensed consolidated EBITDA and adjusted EBITDA reconciliations (Unaudited, in thousands) 2005 2006 2005 2006 Net income (49,723) $ 71,745 $ 48,054 $ 139,920 $ Interest expense 9,186 13,280 26,502 41,285 Income tax expense (benefit) (32,778) 44,484 (54,010) 89,185 Deprecia
Slide 29: EBITDA and Adjusted EBITDA Definitions
(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” represents EBITDA adjusted to exclude accretion of discount on asset retir