EXCO Resources, Inc. today announced a significant increase in its estimated proved reserves from prior year levels primarily attributable to continued drilling success in the Haynesville shale play.Our proved reserves at December 31, 2010 are estimated at 1.5 trillion cubic feet equivalent (Tcfe) with a pre-tax PV10, a non-GAAP measure, of $1.4 billion, calculated pursuant to SEC pricing rules, which are based on the simple average of the first of the month reference natural gas and oil prices for the prior twelve month period, adjusted for energy content, quality and basis differentials. For 2010, the reference price was $4.38 per Mmbtu for natural gas and $79.43 per Bbl for oil which resulted in an adjusted price of $4.37 per Mmbtu for natural gas and $75.83 per Bbl for oil. At year end 2010 our proved reserves were 55% proved developed and 97% natural gas. Based on our estimated full year 2010 production of 112 Bcfe, our reserve life equates to 13.4 years. Using the five year futures strip price at December 31, 2010 averaging $5.23 per Mmbtu for natural gas and $93.09 per Bbl for oil, as adjusted for energy content, quality and basis differentials our estimated proved reserves, would have been 1.6 Tcfe with a pre-tax PV10 of $2.1 billion.
We estimate our total net resource potential to be approximately 11.3 Tcfe as of December 31, 2010. Our year end proved reserves and estimated unproved resource potential do not include any effects of our previously announced Marcellus shale acquisition from Chief Oil & Gas LLC (Chief). Chief received a required waiver from a third party and on January 11, 2011, the purchase price was released from escrow. We have also entered into a definitive agreement with a private company for the purchase of additional Marcellus shale properties with associated shallow production primarily in Jefferson and Clarion counties in Pennsylvania for $95 million, which is expected to close in the first quarter of 2011. BG Group, plc (BG Group) has the right to participate for 50% of these acquisitions. The total resource potential, including proved reserves, attributable to these acquisitions is approximately 3.4 Tcfe, of which 1.7 Tcfe would be net to EXCO if BG Group elects to participate in these acquisitions.
We currently hold approximately 76,000 net acres prospective for the Haynesville and Bossier shales. Pro forma for the closing of the two previously mentioned Marcellus shale acquisitions and assuming BG Group elects to participate in these acquisitions, we will hold approximately 152,000 net acres prospective for the Marcellus shale. This acreage position across both plays would result in a total shale drilling inventory of approximately 9,300 gross potential drilling locations.
Source: Press release
Posted on 1/13/2011 / 0
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