EXCO Resources, Inc. Announces Acquisition of Natural Gas Properties in East Texas
2008-07-15 11:16:00
DALLAS–(EMWNews)–EXCO Resources, Inc. (NYSE:XCO) today announced it has closed an
acquisition of producing oil and natural gas properties, acreage and
other assets in Gregg, Rusk, and Upshur Counties, Texas for
approximately $252 million from private sellers, subject to customary
post-closing purchase price adjustments. EXCO’s
average working interest in the properties is approximately 94% with an
average net revenue interest of 72%. EXCO’s
estimate of net proved reserves acquired is 109 Bcfe and estimated total
net reserves (proved, probable and possible) exceed 370 Bcfe exclusive
of Bossier/Haynesville shale potential, discussed below, all based on
NYMEX strip pricing at the contract effective date of March 1, 2008.
The assets include producing properties with more than 15 Mmcfe per day
of net production from 83 producing wells and approximately 11,000 gross
acres. Also included in the assets is a 50 mile gathering system with
compressors, a dehydration unit and a refrigeration plant. EXCO
estimates that there are more than 500 additional drilling locations in
the Cotton Valley and Travis Peak formations, of which 92 are proved.
EXCO will operate the field and estimates a capital budget of $20
million to drill 9 wells during the remainder of 2008. The current
primary productive formations in the field are the Upper Cotton Valley,
Pettet and Travis Peak. A majority of the acquired leasehold covers
rights to all depths, including the Bossier/Haynesville shale. In prior
years, two vertical wells were drilled into the Bossier/Haynesville
shale on this acreage and logged pay potential in these horizons. Recent
industry activity in the vicinity of the acquired acreage has confirmed
the presence of shale potential. EXCO plans to drill at least one
vertical well in 2008 to further delineate potential of the
Bossier/Haynesville, and EXCO estimates that there could be more than
100 potential shale locations across the acquired acreage.
The acquisition of these properties will be financed with a $300 million
Senior Unsecured Term Loan due December 15, 2008, at our unrestricted
subsidiary, EXCO Operating Company, LP, formerly known as EXCO Partners
Operating Partnership, LP.
EXCO Resources, Inc. is a public oil and natural gas acquisition,
exploitation, development and production company headquartered in
Dallas, Texas with principal operations in Texas, Louisiana, Oklahoma,
Ohio, Pennsylvania, and West Virginia.
Additional information about EXCO Resources, Inc. may be obtained by
contacting EXCO’s Chairman, Douglas H. Miller,
or its President, Stephen F. Smith, at EXCO’s
headquarters, 12377 Merit Drive, Suite 1700, Dallas, TX 75251, telephone
number (214) 368-2084, or by visiting our website at www.excoresources.com.
Our SEC filings and press releases can be found under the Investor
Relations tab.
This release may contain forward-looking statements relating to
future financial results or business expectations. Business plans
may change as circumstances warrant. Actual results may differ
materially from those predicted as a result of factors over which EXCO
has no control. Such factors include, but are not limited to: acquisitions,
recruiting and new business solicitation efforts, estimates of reserves,
commodity price changes, the extent to which EXCO is successful in
integrating recently acquired businesses, regulatory changes and general
economic conditions. These risk factors and additional
information are included in EXCO’s reports on
file with the Securities and Exchange Commission.
The SEC has generally permitted oil and natural gas companies, in
filings made with the SEC, to disclose only proved reserves that a
company has demonstrated by actual production or conclusive formation
tests to be economically and legally producible under existing economic
and operating conditions. We use the terms “probable,”
“possible,” or “unproved”
to describe volumes of reserves potentially recoverable through
additional drilling or recovery techniques that the SEC’s
guidelines prohibit us from including in filings with the SEC. These
estimates are by their nature more speculative than estimates of proved
reserves and accordingly are subject to substantially greater risk of
being actually realized by the company. While we believe our
calculation of unproved drillsites and estimations of unproved reserves
have been appropriately risked and are reasonable, such calculations and
estimates have not been reviewed by third party engineers or appraisers.
Investors are urged to consider closely the disclosure in our Annual
Report on Form 10-K for the year ended December 31, 2007 available on
our website at www.excoresources.com
under the Investor Relations tab or by calling us at (214) 368-2084.
EXCO Resources, Inc. F. Smith, 214-368-2084 |
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