Replies to This Discussion

Permalink Reply by jffree1 on September 23, 2009 at 4:12

Thans Les.

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Permalink Reply by Spring Branch,mineral owner on September 23, 2009 at 4:24

Thanks Les. Exco apparently didn't identify their two most recent wells so that you could add them to the HOF list. I have a feeling the list is about to grow by leaps and bounds. Do you take the yellow part of the map on page 62 to be their take on the prospective Middle Bossier? If so, it differs substantially from Petrohawk's interpretation of the Middle Bossier.

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Permalink Reply by Les Bamburg on September 23, 2009 at 4:30

SB, actually I took the yellow to be the Haynesville and the red outline to be the total Bossier Shale - not just the Middle Bossier.

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Permalink Reply by Martin on September 23, 2009 at 4:29

There's a lot of information in this report. Very interesting -- i would like to hear what Skip Peel and Jay think about this. Normal puffery for the stockholders?

Exco says that they've had 13 fracture stages on several HS wells. Also interesting comments about the impact on US market of lNG imports -- not to worry for the moment. There is also the observation that the USA is the only country that does not tie NG price to crude oil price -- 10 -15% (I guess that's based on BTU equivalent) here we're currently ~5% of crude oil price. Also some interesting HS well production graphs.

Give it a shot! A lot of information for those of us not in the industry.
Thanks for the post, Les B

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Permalink Reply by Les Bamburg on September 23, 2009 at 5:18

Jay, I still don't think refrac's in horizontal wells are likely to occur due to technical and economic issues. In the past refrac's were used in vertical wells to create fractures with a different horizontal orientation.

Most operators have stated the Bossier Shale will require separate wellbores for horizontal completions.

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Permalink Reply by Catfish on September 23, 2009 at 5:24

Wow, good mailbox money!About what does a refrac job cost

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Permalink Reply by Skip Peel - Mineral Consultant on September 23, 2009 at 9:01

Martin. As to "normal puffery", I give you my favorite excerpt from the standard "Forward Looking Statements" declaration:

"You are cautioned not to place undue reliance on a forward-looking statement. When considering our forward-looking statements, keep in mind the risk factors and other cautionary statements in this presentation, and the risk factors included in the Annual Reports on Form 10-K and our Quarterly Reports on Form 10-Q.
Our revenues, operating results, financial condition and ability to borrow funds or obtain additional capital depend substantially on prevailing prices for oil and natural gas, the availability of capital from our revolving credit facilities and liquidity from capital markets. Declines in oil or natural gas prices may materially adversely affect our financial condition, liquidity, ability to obtain financing and operating results. Lower oil or natural gas prices also may reduce the amount of oil or natural gas that we can produce economically. A decline in oil and/or natural gas prices could have a material adverse effect on the estimated value and estimated quantities of our oil and natural gas reserves, our ability to fund our operations and our financial condition, cash flow, results of operations and access to capital. Historically, oil and natural gas prices and markets have been volatile, with prices fluctuating widely, and they are likely to continue to be volatile.

In other words, "if everything goes our way, we may come close to achieving the results we predict". LOL! Obviously there is a lot of information contained in the report and I have only skimmed it but here is what catches my attention. Every mid-size to major nat gas company has to make a choice regarding its focus going forward. EXCO, like CHK and HK, seems to be going all in for a focus on shale gas (page 14). Not every company is doing so as SandRidge appears headed in the opposite direction and Indigo recently purchased much of CHK's shallow rights in the Play. This report comes hard on the heels of HK's report where they announce the sale of their Permian Basin assets and issue more stock to raise the money they need to compete for shale positions. I suspect much of that capital will also go to reduce debt as HK needs available credit and was unlucky that most of their credit previously came from Lehman Bros. (RIP). EXCO's JV with BG Group and it's 75% carry on deep drilling and completion costs echos CHK's deal with PXP (page 18). Bottom line, "Go Shale or Go Home"! EXCO has decided to make the HS their near term focus and will invest in expanded leasehold acquisition as well as increased drilling. Good News.

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Permalink Reply by JeffNParis on September 26, 2009 at 5:36

Skip...do you have an e-mail address I can write to you on?

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Permalink Reply by Skip Peel - Mineral Consultant on September 27, 2009 at 14:30

Jeff. I sent it to your personal page.

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Permalink Reply by w.r. frank on September 23, 2009 at 9:56

The 30.1 mmcfd IP well is Lucille Yearling et al 22, S22, 14N, 12W (#239,732).

The 29.6 mmcfd IP well is Moran 33, S33, 14N, 13W (#239,879).

It was also reported that Moran 34 (not named in the meeting) was completed and put on line Monday, September 21, and was still "cleaning up," but will easily exceed 20 mmcfd. Currently doing 18+ mmcfd in cleanup with 7,950# FCP..

All IP rates for XCO are based on 24 hour rate. The Moran 34 completion makes 16 operated DeSoto wells, all with 24 hour IP rates over 20 mmcfd.

XCO will have 14 rigs running by 12/31 and plans to drill 100 HA wells in 2010.

After cleanup, all XCO wells are choked back to 20/64 for production.

XCO will spud its first horizontal mid-Bossier well by 12/31 (all executives just refer to this as "the Bossier," not the mid-Bossier. XCO has been producing gas from Bossier verticals for three years.

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Permalink Reply by Les Bamburg on September 23, 2009 at 10:10

WR, thanks for the additional details.

So does EXCO just have this pegged technically or are they just fortunate enough to have some great acreage? Maybe a little of both. Either way they are definitely cranking out the best wells. Can't wait to see their 1st Mid-Bossier Shale horizontal completions.

Congrats to Mr. H for all their success.

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Permalink Reply by w.r. frank on September 23, 2009 at 13:03

Both I think. 11 of top 25 wells are XCO and 100% are in DeSoto. HK has 7 of top 25, and CHK has 3. HK has drilled 40+ wells, CHK has drilled 60 + and XCO has drilled 16. Pretty impressive!!!

It is a very experienced management team. On their last three wells, the spud to rig release was 46 days, down from 73 days for first three wells, and 58 days for mid-three wells.

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