Tuesday, November 30, 2010

EXCO 2011 Capital Budget

Yesterday, EXCO Resources announced its 2011 capital budget.  The total capital budget will be $976.2 million, of which $781.8 million, or 80%, will be spent in east Texas and north Louisiana primarily targeting the Haynesville Shale.  Of the $781.8 million Haynesville budget, $683.0 million will be spent for drilling and completion costs, $29.8 million for lease acquisitions, $41.8 million for operations projects (i.e. water resources, roads, etc.), and $2.4 million for seismic data acquisition.

EXCO is not wilting in the face of low commodity prices, as the company expects to increase production 40% over 2010 levels.  But the company did caution that 14 of its current 25 rigs (27 rigs in 2011) are on short term contracts and can be idled if commodity prices are too low (although it did not specify where the 14 short-term rigs are located).

In the Haynesville Shale, EXCO plans to maintain 22 rigs to drill 163 gross wells (58.7 net):

  • Louisiana: 15 rigs will drill in the Holly field in DeSoto and Caddo Parishes, where the company will continue to drill at 80 acre spacing on multi-well pads with the goal of driving production rather than holding leases.  
  • Texas: seven rigs will drill in the Shelby Trough area of Nacogdoches, San Augustine and Shelby Counties with the goal of holding leases and better defining the play's boundaries in the southwest extension.   
The company will also participate in 70 gross non-operated wells (7 net).  By the end of 2011, EXCO expects to have all of its leases held by production (at least all the leases it wants to keep).

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