EXCO Resources, Inc. operates as an independent oil and natural gas company.
The company engages in the exploration, exploitation, acquisition, development and production of onshore U.S. oil and natural gas properties with a focus on shale resource plays. The company’s principal operations are conducted in certain key U.S. oil and natural gas areas, including Texas, Louisiana and the Appalachia region.
Development and Exploitation Project Areas
East Texas and North Louisiana
The company’s op...
EXCO Resources, Inc. operates as an independent oil and natural gas company.
The company engages in the exploration, exploitation, acquisition, development and production of onshore U.S. oil and natural gas properties with a focus on shale resource plays. The company’s principal operations are conducted in certain key U.S. oil and natural gas areas, including Texas, Louisiana and the Appalachia region.
Development and Exploitation Project Areas
East Texas and North Louisiana
The company’s operations in East Texas and North Louisiana focus on the Haynesville and Bossier shales, which are primarily located in Shelby, Harrison, Panola, San Augustine and Nacogdoches counties in Texas; and DeSoto and Caddo Parishes in Louisiana. The company’s acreage in this region is primarily held-by-production. The Haynesville shale is located at depths of 12,000 to 14,500 feet and is being developed with horizontal wells that have 4,500 to 10,000 foot laterals.
North Louisiana
The company’s position in the Holly area of North Louisiana consists of 30,800 net acres in DeSoto Parish and 11,700 net acres in Caddo Parish, which are primarily held-by-production. As of December 31, 2018, the company had a total of 434 gross (236.5 net) operated wells flowing to sales. The company’s development activities in North Louisiana during 2018 primarily focused on the completion of 13 gross (7.4 net) operated wells drilled in prior year and drilling of 6 gross (3.6 net) operated wells. Including non-operated volumes, the company’s average natural gas production was approximately 163 net million cubic feet of natural gas equivalent (Mmcfe) per day during December 2018.
The company plans to drill 1 gross (0.6 net) operated well in the Haynesville shale during the first quarter of 2019 and complete 11 gross (6.2 net) operated wells in the Haynesville shale during the first three quarters of 2019. In addition, the company plans to perform refracs on 3 gross (1.5 net) wells utilizing an improved design that includes a cemented liner and increased proppant volumes.
East Texas
The company’s operations in East Texas focus on the Haynesville and Bossier shales. The company’s acreage is primarily located in Harrison, Panola, Shelby, San Augustine and Nacogdoches counties in Texas; and is primarily held-by-production. The Haynesville and Bossier shales in East Texas are being developed with horizontal wells that have 6,000 to 7,500 foot laterals.
The company’s position in the Shelby area of East Texas primarily consists of 30,400 net acres and includes approximately 9,700 net acres subject to continuous drilling obligations.
As of December 31, 2018, the company had a total of 102 gross (45.9 net) operated wells flowing to sales. The company’s development in this region during 2018 was limited to the participation in certain non-operated wells. Including non-operated volumes, the company’s average natural gas production was approximately 24 net Mmcfe per day during December 2018.
The company’s plans for 2019 include the participation in non-operated wells that would satisfy its continuous drilling obligation in the southern portion of the region. In addition, the company plans to participate in certain non-operated wells to appraise its position in Harrison and Panola counties. The company’s position in Harrison and Panola counties consists of 5,400 net acres.
South Texas
The company’s position in this region includes approximately 48,500 net acres, of which approximately 95% are held-by-production. The company’s South Texas acreage covers portions of Zavala, Dimmit and Frio counties. The company’s acreage in the Eagle Ford shale is in the oil window and averages 375 feet in gross thickness at true vertical depths ranging from 5,400 to 6,800 feet. The company’s lateral lengths range from 5,000 to 10,000 feet and the total measured depth averages 14,600 feet. The company’s acreage in the area also includes additional upside in formations, such as the Austin Chalk, Buda, Georgetown and Pearsall formations.
As of December 31, 2018, the company had a total of 236 gross (107.9 net) operated horizontal wells flowing to sales. Including non-operated volumes, the company’s average oil production in South Texas was approximately 4,700 net barrels of oil equivalent per day during December 2018.
The company’s development program during 2018 focused on the Eagle Ford shale, which included drilling 14 gross (11.3 net) operated wells and completing 16 gross (12.9 net) operated wells. The company plans to drill 26 gross (8.5 net) and turn-to-sales 23 gross (7.4 net) operated wells in the Eagle Ford shale during 2019. In addition, the company’s plans for 2019 include the construction of an electrical distribution network over the core development area.
Appalachia
The company’s operations in the Appalachia region have primarily included testing and selectively developing the Marcellus shale with horizontal drilling. As of December 31, 2018, the company held approximately 339,800 net acres in the Appalachia region, including approximately 234,800 net acres prospective for the Marcellus shale and approximately 69,000 net acres prospective for the dry gas window of the Utica shale in Pennsylvania.
Drilling, completion and production activities in Pennsylvania target the Marcellus shale, as well as deeper formations, including the Utica shale at depths ranging from 5,000 to approximately 12,000 feet.
As of December 31, 2018, the company operated a total of 116 gross (83.3 net) horizontal wells in the Marcellus shale. During 2018, the company turned-to-sales 1 gross (0.9 net) operated Marcellus shale well in Northeast Pennsylvania that was previously awaiting the connection of a pipeline. Including non-operated volumes, the company’s production in the Appalachia region was approximately 51 net Mmcfe per day during December 2018.
The company’s plans for 2019 include drilling and turning-to-sales 2 gross (1.9 net) operated Marcellus shale wells in Northeast Pennsylvania. The company’s plans for 2019 also include drilling and turning-to-sales 1 gross (1.0 net) operated appraisal well targeting the dry gas window of the Utica shale in Central Pennsylvania.
Hydraulic Fracturing Activities
The company’s hydraulic fracturing activities are primarily focused in the Eagle Ford shale in South Texas, Haynesville and Bossier shales in East Texas and North Louisiana and Marcellus shale in the Appalachia region. Primarily all of the company’s proved reserves are associated with shale assets in these areas.
Customers
The company’s natural gas customers primarily include natural gas marketing companies.
Oil and Natural Gas Reserves
As of December 31, 2018, the company’s proved reserves were approximately 660.6 billion cubic feet equivalent, of which approximately 52% were located in the Haynesville/Bossier shales, 34% in the Marcellus shale, and 14% in the Eagle Ford shale.
Strategy
The company’s primary strategy focuses on the exploitation and development of its shale resource plays and the pursuit of leasing and acquisition opportunities.
Regulation
With regard to the company’s physical sales of natural gas and oil, its gathering of any of these energy commodities, and any related hedging activities that the company undertakes, the company is required to observe these anti-market manipulation laws and related regulations enforced by the Federal Energy Regulatory Commission and/or the Commodity Futures Trading Commission.
In the event that the company conducts operations on federal, state or tribal oil and natural gas leases, such operations must comply with various regulatory restrictions, including various nondiscrimination statutes, royalty and related valuation requirements, and certain of these operations must be conducted pursuant to certain on-site security regulations and other appropriate permits issued by the Bureau of Land Management, Bureau of Ocean Energy Management, Bureau of Safety and Environmental Enforcement or other appropriate federal, state or tribal agencies.
The pipelines that the company uses to gather and transport its oil and natural gas in interstate commerce are subject to regulation by the U.S. Department of Transportation (DOT) under the Hazardous Liquid Pipeline Safety Act of 1979, as amended with respect to oil; and the Natural Gas Pipeline Safety Act of 1968, as amended (NGPSA) with respect to natural gas.
The pipelines used to gather and transport natural gas being produced by the company are also subject to regulation by the DOT under the NGPSA; the Pipeline Safety Act; and the Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011, which was signed into law in January 2012.
Federal environmental statutes to which the company’s domestic activities are subject include, but are not limited to, the Oil Pollution Act of 1990; the Clean Water Act of 1972; the Rivers and Harbors Act of 1899; the Comprehensive Environmental Response, Compensation and Liability Act, as amended; the Resource Conservation and Recovery Act; the Clean Air Act; the Safe Drinking Water Act; the Toxic Substances Control Act of 1976; the Endangered Species Act of 1973; and the National Environment Policy Act of 1969.
To the extent that the company’s exploration and development plans include leases on federal lands, the National Environment Policy Act of 1969 requirements have the potential to delay or impose additional conditions upon the development of oil and natural gas projects.
To the extent not preempted by other applicable laws, the company is subject to the requirements of the federal OSHA and comparable state statutes, where applicable. The OSHA hazard communication standard, the United States Environmental Protection Agency community right-to-know regulations under Title III of the Comprehensive Environmental Response, Compensation and Liability Act, as amended and similar state statutes, where applicable, require that the company maintains and/or discloses information about hazardous materials used or produced in its operations.
History
EXCO Resources, Inc. was founded in 1955.