Exco Resources Inc · OTC:EXCE
Exco Resources — Debt Investor Presentation (September 2006)
29 slides from Exco Resources's debt investor presentation, Sep 11, 2006
Slide 1: Lender Presentation $750 Million Second Lien Term Loan
Lender Presentation $750 Million Second Lien Term Loan September 2006 EXCO Partners Operating Partnership, LP Exhibit 99.1
Slide 2: 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 3: Forward Looking Statements (continued)
Forward Looking Statements (continued) Our revenues, operating results, financial condition and ability to borrow funds or obtain additional capital depend substantially on prevailing prices for oil and natural gas. Declines in oil or natural gas prices may materially adversely affect our financial
Slide 4: Agenda
Welcome and Introduction Adam Bernard J.P. Morgan Securities Inc. Transaction Overview Doug Miller, Chairman and CEO Steve Smith, President Asset Overview Doug Miller Steve Smith EXCO Resources, Inc. Overview Doug Miller Steve Smith Agenda Financial Projections Paul Rudnicki, Vice President Private
Slide 5: Transaction Overview
Transaction Overview Doug Miller, Chairman and CEO Steve Smith, President
Slide 6: Transaction Overview
Transaction Overview On July 24, 2006, EXCO Resources, Inc. (“EXCO”) announced an agreement to acquire Winchester Energy Company, Ltd. (“Winchester”) from Progress Energy, Inc. for $1.2 billion EXCO Partners Operating Partnership, LP (“EPOP” or the “Borrower”) will be formed as a new subsidiary of E
Slide 7: EXCO Today
EXCO Today (1) Other areas include Mid Continent, Permian Basin and Rockies (2) Average production for June 2006 (3) Appalachia and other: SEC 12/31/05 total proved reserves, pro forma for the TXOK acquisition using SEC 12/31/05 total proved reserves, including proved reserves as of the effective da
Slide 8: EXCO Partners Operating Partnership, LP
EXCO Partners Operating Partnership, LP (1) Average daily production for June 2006 (2) Reserves effective July 1, 2006; NYMEX 6/22/06 pricing without the effects of hedges (3) Estimated annual EBITDA at current run-rate (4) Based on 10.0x EBITDA attributable to pipeline and gathering assets EXCO Eas
Slide 9: Financing Plan
Financing Plan EPOP Purchase Winchester for $1.2 billion $750 million Revolver $750 million 2 nd Lien Term Loan Contribute $475 million of EXCO Assets $200 million cash to repay EXCO debt and 52 million units (100%) Repay EPOP debt EXCO Resources, Inc. Unrestricted Subsidiary as General Partner Step
Slide 10: Sources and Uses
Sources and Uses $ Millions Sources: Senior S ecured R evolving C redit F acility (1) $6 6 7 Senior Secured Second Lien Term L oan 750 EXCO E quity I nvestment (2) 2 75 Total Sources $ 1, 6 92 Uses: Purchase of Winchester $1,200 Purchase of EXCO Assets (2) 4 75 F ees and E xpenses 1 7 T otal Uses $1
Slide 11: Asset Overview
Asset Overview Doug Miller Steve Smith
Slide 12: EPOP Snapshot
EPOP Snapshot (1) Based upon total proved reserves as of July 1, 2006 and June 2006 production annualized Net Production ( 6 /0 6 ): 111.1 Mmcfe/d 10 5 . 1 Mmcfe/d gas 994 Bbls/d oil Total Proved Reserves ( 7 /0 6 ) : 600 Bcfe ( 5 2 % PD, 96 % gas) Reserve Life (1) : 1 4 . 8 years Total Reserves: 9
Slide 13: Asset Highlights
Asset Highlights The EPOP assets are primarily located in two areas: East Texas Fields Upshur, Gregg, Smith, Shelby and Rusk Counties 308.9 Bcfe of total proved reserves 56.5 Mmcfe of daily production North Louisiana Fields Caddo and Desoto Parishes 291.0 Bcfe of total proved reserves 54.6 Mmcfe of
Slide 14: Asset Highlights (continued)
Asset Highlights (continued) (1) Does not include 1 Bcfe from miscellaneous locations outside the key fields/areas The assets are primarily located in seven key fields/areas (1) : Holly/Caspiana Desoto Parish, LA 221 Bcfe of total proved reserves Longwood/Greenwood/Various ETX Caddo Parish, LA/Vario
Slide 15: Total Oil and Gas Reserves
Total Oil and Gas Reserves(1) As of 7/06 (1) Pro forma reserves effective July 1, 2006; NYMEX 6/22/06 pricing without the effects of hedges Oil/Liq. Gas Equiv. PV 10 Net Reserve Category Mbbls MMcf MMcfe $000 Proved Developed Producing 2. 4 2 5 2. 0 266.6 $ 8 25 . 0 Proved Developed Non - Producing
Slide 16: Midstream Assets Overview
Midstream Assets Overview Pipeline assets 70 miles in East Texas 120 Mmcf/d of current gross throughput with total capacity of 180 Mmcf/d Connections to 12 interstate pipeline markets Gathering assets 451 miles in East Texas and North Louisiana 177 Mmcf/d of current gross throughput Estimated curren
Slide 17: Reserve Summary
Reserve Summary Proved Reserves by Commodity Total Reserves by Category Proved Reserves by Category Proved Reserves by Entity 44% 48% 8% PDP PUD PDNP 67% 33% Winchester EXCO 61% 34% 5% Proved Probable Possible 96% 4% Oil Natural Gas
Slide 18: Net Production Volumes
Net Production Volumes June 2006 Production Oil/Liq. Bopd Gas Mmcfpd Equiv. Mmcfcpd East Texas 513.0 53.4 56.5 North Louisiana 481.0 51.7 54.6 Total Production 994.0 105.1 111.1 68% 32% Winchester EXCO
Slide 19: Total Well Count
Total Well Count As of 6/06 Net Wells (All) Gross Wells (All) (1,097 Total) (770 Total) All Wells Operated Wells Area Gross Net Gross Net East Texas 786 5 42 707 528 North Louisiana 3 11 228 271 226 Total Well Count 1,0 97 770 978 754 58% 42% Winchester EXCO 54% 46% Winchester EXCO
Slide 20: Business Strategy
Business Strategy Grow production and reserves while maintaining free cash flow Long life reserves, onshore East Texas and North Louisiana Development potential Growth projects – probables and possibles Operating efficiencies and cost reductions Free cash flow to repay indebtedness or maximize distr
Slide 21: Investment Considerations
Investment Considerations Geographically concentrated properties with multi pay potential High working interest, more than 90% of properties are operated Midstream assets group provides timely hookups, enhanced production surveillance and operating control $14 - $16 million of estimated annual cash
Slide 22: Hedging Overview
Hedging Overview (1) July 1 - December 31, 2006 95% of proved developed production hedged from 2007 to 2010 61% of proved production hedged for 3 years near current market prices 2006 1 2007 2008 2009 2010 Gas (Mmbtus) Swaps 10, 326 , 662 2 8 , 028 , 900 2 6 , 561 , 7 00 21,566,400 3,205,200 $ 8.9 5
Slide 23: Summary Pro Forma Historical Financials and Credit Statistics
Summary Pro Forma Historical Financials and Credit Statistics Note: Historical financials are preliminary and subject to change (1) Total revenue for 2004, 2005 and 6/30/06 YTD does not include historical effects of hedging. 6/30/06 YTD Annualized data is pro forma as if the 2007 hedging profile was
Slide 24: Repayment of EPOP Debt
Repayment of EPOP Debt (1) Reflects estimated effects of potential asset sales (2) Actual and pro forma as of 6/30/06 (3) MLP EBITDA is for the 6/30/06 YTD Annualized period and is pro forma as if the 2007 hedging profile was in place for the 6/30/06 YTD period. Additionally, historical G&A expense
Slide 25: EXCO Resources, Inc. Overview
EXCO Resources, Inc. Overview Doug Miller Steve Smith
Slide 26: Company History
Company History Bought control of EXCO in December 1997 Prior to that, certain members of management grew Coda Energy from $0 to $380 million and sold Coda in November 1997 From 12/31/97 to 6/30/06 (1) : $1.7 billion of proved reserve acquisitions 1.2 Tcfe in 139 transactions Proved reserves grew fr
Slide 27: Recent Activity
Recent Activity February 2006: Completed IPO on February 14, 2006 with sale of 53.6 million shares and net proceeds of $662 million Retired $735.5 million of Equity Buyout and TXOK acquisition debt Redeemed $158.8 million of preferred stock and recorded the acquisition of TXOK properties April 2006:
Slide 28: Diversified Reserve Base
Appalachia 442.6 Bcfe Proved (63%) 546.9 Bcfe Total (56%) 42.5 Mmcfe/d (45%) Permian Basin 91.1 Bcfe Proved (13%) 213.3 Bcfe Total (22%) 13.0 Mmcfe/d (14%) Other Areas 5.1 Bcfe Proved (1%) 8.5 Bcfe Total (1%) 1.5 Mmcfe/d (2%) (1) SEC 12/31/05 total proved reserves, pro forma for the TXOK acquisition
Slide 29: Liquidity and Financial Position
(1) Pro forma for the contribution of the EXCO Assets to EPOP, which is non-recourse to EXCO and shown unconsolidated (2) Excludes unamortized bond premium (3) Pro forma borrowing base as indicated by lead lender Liquidity and Financial Position ( $ million s) June 30 , 2006 Pro Forma (1) Cash $ 39
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