Thursday, February 26, 2009

Exco Resources: Two Big Wells

This week, Exco Resources discussed its first two Haynesville horizontal wells on its quarterly conference call (transcript). Exco has 92,000 net acres in the Haynesville Play and drilled its first two wells in DeSoto Parish, LA (see map below). The Oden 30H #6 was completed on December 3. It had initial production of 22.9 Mmcfe/day and average production of 15 Mmcfe/day. Lattin 24 #4 had initial production of 24.2 Mmcfe/day and average production of approximately 17 Mmcfe/day. Exco is expecting completion of another well shortly. The company has four rigs working in the Haynesville Play and estimates that it has total potential of 4.5 Tcfe of resources.

Additionally, the company discussed its plans to expand its pipeline capacity in the Haynesville Play for both its own product and that of other companies. Exco will invest $108 million in takeaway capacity of 450 Mmcfe/day that can be expanded to 1.0 Bcfe/day with compression. Unlike the Tiger Pipeline, which has to go through a process before it starts construction, Exco has already received delivery of much of the pipe and is beginning construction.

On the call, Exco indicated that it had drilled test wells in different sites in Texas and Louisiana and is finding that the shale is thickest and the pressures are highest in DeSoto and Caddo Parishes and Harrison County (in the acreage that Exco has leased). Among those three areas, the shale is reported to be thickest in Caddo.

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