Tuesday, February 10, 2015

EXCO 2015 Capex Budget to Focus on Haynesville

EXCO Resources released its 2015 capital budget yesterday.  The company plans to concentrate its efforts in the Haynesville Shale this year, allocating 70% of its $215 million drilling and completion budget to the area (the total capex budget is $275 million).

Summary of 2015 EXCO Resources Capex Budget
                     
   
($MM)
Gross Wells Spud
Net Wells Spud
Net Wells Completed
Drilling & Completion Other Capital Total Capital
ETX/NLA 25 11.9 17.6 $150 $8 $158
S Texas 23 7.1 10.7 59
 
7 66
Appalachia 2 0.7 0.5 6 8 14
Corporate         37   37
Total 50   19.7   28.8   $215   $60   $275

The strategy behind the Haynesville budget is to increase reserves and maintain acreage, mostly in the Shelby area of east Texas, where EXCO will spud 22 gross wells in 2015.  From the press release:
"We believe our Shelby area in East Texas will provide significant growth opportunities for EXCO as we convert undrilled locations to proved developed producing wells and add proved undeveloped locations to our drilling inventory."  
EXCO's efforts in north Louisiana will only involve completing 15 gross wells that were drilled in 2014 and drilling and completing another three gross wells in the first half of 2015.  The company will also be evaluating its refrac program (it has performed six refracs to date, according to the company).  After that, though, it looks like they will go dark for a while in north LA.

The company is pleased with its restricted flowback techniques, which it believes is helping to lower decline rates.  It also still favors longer laterals, estimating that the estimate ultimate recoveries (EUR) for its Shelby wells will be 1.3 Bcf per 1,000 feet of lateral length.  The laterals for the planned 2015 wells will be between 6,300 and 7,500 feet.  Costs for these wells are expected to average $10.8 million per well.  

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