Wednesday, November 4, 2009

Exco Results

Exco Resources released quarterly results yesterday. Exco has been a surprisingly big player in the Haynesville Shale with many of the top performing wells to date, at least in terms of intial production.

Because of this success as well as its recent joint venture agreement with Britain's BG Group, the company announced that it will increase the total number of Haynesville wells spudded in 2009 to 43 (up from 27) and complete 27 of those (up from 20). The 2009 capital budget will come in around $535 million. To date, the company has 17 wells flowing, having completed eight in the third quarter, and as of October 16 is producing 213 MMcf/day from the Haynesville play.

In 2010, Exco plans to run 14 rigs (it currently runs ten, with the recent addition of three) and dill 125 wells (including non-operated). The company expects to complete 24 wells in the first quarter of 2010.

Exco is also looking at the Mid-Bossier Shale. It has some core samples and plans to drill a Mid-Bossier well in the fourth quarter of 2009. In analyzing test results, the company notes that the Mid-Bossier thickness is around 1,500 feet, compared to 300 to 400 feet for the Haynesville. The company did not mention any porosity, permeability or other geologic results in its releases, so thickness is not much to go on. We will look for the results from the Mid-Bossier well in Q1 2010. If I'm reading it correctly, the company's take on the size of the Bossier Shale is considerably different (and bigger) than its competitors'.

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