Wednesday, December 18, 2013

EXCO 2014 Capital Budget Announced

EXCO Resources announced its 2014 capital budget yesterday.  The company will spend $368 million, $294 million of which will be spent on drilling and completion.  Of the D&C figure, $173 million (59%) will be spent on the Haynesville, where the company plans to run 4 rigs.  Another $11 million will be spent in the Haynesville outside of D&C.  In 2014 EXCO plans to spud 42 gross Haynesville wells (32% of the company's total), which represents 20.5 net wells (57% of total).  Most of that budget, 70%, will be spent in the Holly area of DeSoto Parish.  The plan there is to develop seven units on 107 acre spacing with 4,200 foot laterals and 14 frac stages.

EXCO also plans to complete eight gross wells (3.2 net) in the Shelby area of San Augustine Co., TX, where it will use longer laterals (~7,000 feet) with more proppant per completed lateral foot and a more restricted flowback technique.  The Texas wells are a test that the company believes might yield strong returns in a low natural gas price environment and might be a platform for future development.

These figures show that while the company has interests elsewhere, the Haynesville is still its most significant asset.  EXCO is only planning to spud two gross wells in the Marcellus Shale (0.5 net) in 2014.  The company will run five rigs in the Eagle Ford Shale targeting 90 gross wells, but that figure only represents 15.2 net EXCO wells (17% of gross), compared to the Haynesville where EXCO's wells are 49% net owned.

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