Douglas H. Miller, EXCO's Chief Executive Officer, commented, "Our strong operating performance continued during the third quarter with record average production of 397 Mmcfe per day, which would have exceeded 400 Mmcfe per day excluding the effects of Hurricane Ike. Present production is approximately 406 Mmcfe per day. Revenues and cash flows were also strong due to favorable pricing of oil and natural gas during the quarter. Even though oil and natural gas prices began declining during the quarter and have continued to weaken, our significant hedge position in 2008 and 2009 is serving to greatly reduce the impact of the lower prices.



"We continue to drill in all significant areas of our portfolio with increased emphasis in the Haynesville, Marcellus and Huron shale areas. We have begun to release rigs in certain conventional drilling areas and expect reductions in planned drilling expenditures in the fourth quarter of 2008 of approximately 10-15%. Including these reductions in our expected drilling activity for the fourth quarter of 2008 and completion of our leasing and midstream capital projects, our total capital spending in the fourth quarter will be a reduction of approximately 35% from the third quarter of 2008 levels. The results of our shale drilling programs are very encouraging, and we look forward to the first horizontal Haynesville results in the next two to three weeks.



"We are evaluating the sale of non-core assets throughout our portfolio and have begun a formal sales process for certain East Texas assets. Due to current market conditions, we have terminated the joint venture process announced in July; however, we may pursue certain joint ventures in the future if market conditions warrant.



"On October 20, 2008, we received a reaffirmation of our $2.5 billion borrowing base under our revolving credit agreement from our lenders. We are in discussions with our lenders to refinance, renew and extend our $300 million Term Loan, which we expect to complete on or before the existing maturity date. This refinancing, renewal and extension requires approval by a majority of the lenders under the EXCO Operating Company revolving credit agreement.



"We are currently finalizing our capital spending plans for 2009. We will continue to set our budget at an amount which can be fully funded within our projected cash flow. Obviously, commodity prices are a significant factor in setting and maintaining capital spending. However, we expect our discipline of not spending more than our cash flow and our hedge position to provide adequate capital to exploit our significant inventory of drilling locations with particular emphasis on the Haynesville and Marcellus shale assets."


People please!!!! read and think!

Buck