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Permalink Reply by JMan on June 30, 2015 at 4:15

This touches on the issue.  Perhaps it will help a little.

https://www.fitchratings.com/gws/en/fitchwire/fitchwirearticle/Mine...

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Permalink Reply by kittycatmama on June 30, 2015 at 9:50

Thank you JMan. Very interesting.

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Permalink Reply by kittycatmama on July 2, 2015 at 2:47

Does anyone have an opinion on EXCO? They are taking a beating in the stock market. We have one our properties leased with them and they have been the best company to deal with, but I am worried about them with their stock prices so low

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Permalink Reply by kittycatmama on July 2, 2015 at 4:16

So if they file, what happens to royalties? Are they in limbo for awhile?

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Permalink Reply by tc on July 2, 2015 at 3:56

Bankruptcy can be bad and good.  Bad in the short term as the company won't have much capital to do new drilling, most likely they also haven't been doing much drilling leading up to the bankruptcy.  The good is if a better capitalized company buys the assets then more drilling may happen in the future.

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Permalink Reply by Skip Peel - Mineral Consultant on July 2, 2015 at 4:29

I think if I were to run the numbers EXCO has drilled more HA LA wells by market cap than any other HA operator.  In fact I don't think it would be close.  In a declining price environment here are EXCO's LA totals by year:  2010 - 139, 2011 - 121, 2012 - 50, 2013 - 42, 2014 - 35.  Keep in mind this is LA only and EXCO has drilled a good number of E TX HA wells.  In fact their drilling program has been E TX focused since 2014.  EXCO has 3 rigs drilling in E TX as of last Friday.

Although we would all like to see improving NG prices that prospect seems more possible next decade.  Most new NG demand will not be on line until 2019/2020, depending on which projects actually get built and when.  Smaller companies can excel at upstream operations and have good reputations for treating their royalty interests fairly.  I don't hear much complaint about EXCO excepting those who would rather keep their reserves in the ground.  And I hear occasional complements from EXCO's mineral lessors. 

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Permalink Reply by JMan on July 2, 2015 at 4:33

If you didn't hear, EXCO just merged with Bluescape Resources who was mostly an Eagle Ford player.  It's surprising since Bluescape's Eagle Ford acreage was absolutely horrible in NW Frio.  

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Permalink Reply by Skip Peel - Mineral Consultant on July 2, 2015 at 4:48

EXCO does have one rig currently running in Zavala County.  Has there been an official announcement of the merger?

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Permalink Reply by JMan on July 2, 2015 at 4:49

Yes.

http://www.excoresources.com/single-news-release.htm?regid=2031332

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Permalink Reply by Skip Peel - Mineral Consultant on July 2, 2015 at 4:55

Bluescape also has Zavala acreage and this "Services and Investment Agreement" may provide a financial life line to EXCO while bringing in more experienced upstream talent to run development for the merged companies.  EXCO is a very good operator.  Maybe they can improve well results in Bluescape's acreage.  Thanks for the heads up, JMan.

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Permalink Reply by JMan on July 2, 2015 at 4:57

EXCO purchased their Zavala acreage from CHK and that acreage isn't great by any means.  Bluescape's owner is a bit loony I hear so it seems EXCO may have lucked out in terms of short term finances and found some "dumb money".  

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Permalink Reply by Skip Peel - Mineral Consultant on July 2, 2015 at 5:01

JMan, is the news release date a misprint or was this actually announced April 1.  I must say someone wasn't thinking when if they chose April Fool's Day for a major corporate announcement.

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