fourth quarter and full year 2010 review

8/7/2019 Fourth Quarter and Full Year 2010 Review

1/19

PPT 193 2010 Full Year Review

Fourth Quarter and Full Year 2010 Review

February 24, 2011


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EXCO Resou rc es, Inc .


2

Management Participants

Doug Miller

Steve Smith

Hal Hickey

Paul Rudnicki

Chairman and CEO

President and CFO

Vice President and COO

Vice President


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3

2010 In Review

Pro forma Q4 2009 to Q4 2010 production growth of 70% During 2010 grew production from 212 Mmcfe/d to 385 Mmcfe/d

Replaced 576% of production Increased Proved Reserves by 56% to 1.5 Tcfe (SEC case) at an attractive all-in F&D cost of $0.54

per Mcfe

Continued success in our Haynesville shale program Commenced multi-well pad, 80 acre development in the Holly area Acquired second core position in Shelby area; strong initial results Added 24,000 net acres to our Shelby position

Entered into joint venture with BG Group in Appalachia Concentrated in 2 areas for immediate development; adding acreage in each Accelerating appraisal across remaining acreage


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Results and Corporate Highlights

Steve Smith


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5

Corporate Highlights

(inthousands,exceptpershareandpr oduction) Amount PerShare(5) Amount PerShare(5)Oilandnaturalgas revenues 134,898$ 515,226$

Cashsettlementsofderivatives 50,795$ 217,455$

Oilandnaturalgas revenuesincludingderivatives 185,693$ 732,681$

Adjustednetincome(1)

24,279$ 0.11$ 137,359$ 0.64$

AdjustedEBITDA(1)

114,410$ 478,022$

Cashflowfromoperations(1)(2)

106,304$ 0.49$ 433,877$ 2.01$

AveragedailyproductionMmcfe/d 350 307

DirectF&DCost(3)

0.54$

F&DCost(4)

0.49$

AllinF&DCost 0.54$

Q42010Actuals FullYear2010Actuals

Fourth quarter 2010 production of 350 Mmcfe/d represents a 70% increase over pro forma Q4 2009

Direct all-in F&D of $0.54 per Mcfe includes the benefit of $351 million of BG carry; direct all-in

F&D cost of $1.03 per Mcfe excluding the carry

(1) Non-GAAP measure, please see the Investor Relations section of our website (www.excoresources.com) under the tab Non-GAAP reconciliations

(2) Cash flow from operations before changes in working capital and including settlements of derivative financial instruments with a financing element(3) Direct F&D cost excludes revisions(4) F&D Cost includes revisions other than price(5) Calculated using diluted shares of 216,125,000 for Q4 2010 and 215,735,000 for full year 2010


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6

Liquidity and Financial Position

(1) Includes $161.7 million of JV restricted cash at 12/31/10(2) Excludes bond discount(3) Net of $15.5 million in letters of credit(4) 12/31/10 pro forma debt adjustments include reduction of $229.7 million for BGs reimbursement of 50% of the Chief acquisition, reduction of $125.0 million for distribution from TGGT, reduction of $21.6 million for BG

acreage reimbursements, increase of $42.8 million related to pending Appalachia acquisition, and an increase of $45.0 million due to post close Appalachia JV adjustment

Completed offering of $750 million 7 % Senior Notes due 2018; portion of proceeds used torepay existing $445 million 7 % Senior Notes due 2011

Current pro forma liquidity of ~$630 million

Closed $500 million TGGT credit facility in January; received $125 million distribution fromTGGT in January

$inthousands 12/31/2010ProForma

12/31/2010(4)

Cash(1) 205,946$ 205,946$

Bankdebt(LIBOR+2%to3%) 849,000 560,450

Seniornotesdue2018(71/2%)(2) 750,000 750,000

Totaldebt 1,599,000 1,310,450

Netdebt 1,393,054$ 1,104,504$

Borrowingbase 1,000,000$ 1,000,000$

Unusedborrowingbase(3) 135,498$ 424,050$

Unusedborrowingbasepluscash(1)(3) 341,444$ 629,996$

RatingAgencyStandingCorporate Rating S&P Moody's

November 2010 BB- B1

Bond Rating S&P Moody's

November 2010 B B3


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8/19


Financial Review

Paul Rudnicki


9/19


10/19


11/19



11

Reserves With Without

Total Proved Reserves F&D Costs Added BG Carry BG Carry

(dollars in thousands, except per Mcfe) Incurred Mmcfe Per Mcfe(2) Per Mcfe

Haynesville 166,980$ 565,099 0.30$ 0.92$Conventional 65,998 38,218 1.73 1.73Exploratory 113,617 42,310 2.69 2.69

Total development and exploration 346,595$ 645,627 0.54$ 1.08$

Revisions - other than price - 66,383 - -Subtotal 346,595$ 712,010 0.49$ 0.98$

Leasehold additions 37,518 - - -Total 384,113$ 712,010 0.54$ 1.03$

Reserves With Without

Total Proved Developed Reserves F&D Costs Added BG Carry BG Carry

(dollars in thousands, except per Mcfe) Incurred Mmcfe Per Mcfe(5) Per Mcfe

Haynesville 124,431$ 190,451 0.65$ 1.98$

Conventional 65,998 19,246 3.43 3.43

Development(3) 190,429$ 209,697 0.91$ 2.11$

Exploratory(4) 103,699 28,077 3.69 3.69

Total development and exploration 294,128$ 237,774 1.24$ 2.30$

Year End SEC Total Proved Reserves(1)

Development costs

(1) Year end 2010 SEC reserve estimate pricing of $4.38 per Mcf for natural gas and $79.43 per Bbl for crude oil

(2) Haynesville adjusted for the benefit of $351 million of BG carry associated with our Haynesville shale total proved reserve additions(3) Excludes $42.5 million of costs primarily associated with future proved developed reserve additions(4) Excludes $9.9 million of costs associated with future proved developed reserve additions(5) Haynesville adjusted for the benefit of $253 million of BG carry associated with our Haynesville shale proved developed reserve additions


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EXCO Resou rc es, Inc . 12


Hedge Position and Strategy(1)

Tables include the following natural gas trades added since YE 2010

Mmcf Strike

2011 30,060 4.69$

2012 25,620 5.06$

Annual NYMEX Contract Contract Contract

natural gas price per NYMEX oil price per Equivalent price per

Mmcf Mcf Mbls Bbl Mmcfe Equivalent Guidance(1)

2011 86,635 5.30 547 111.32 89,917 5.78 45%2012 53,070 5.37 275 95.70 54,717 5.69 23%

2013 5,475 5.99 - - 5,475 5.99 2%

Total 145,180 5.35$ 822 106.10$ 150,109 5.75$

Per Day NYMEX Contract Contract Contract

natural gas price per NYMEX oil price per Equivalent price per

Mmcf/d Mcf Mbls/d Bbl Mmcfe/d Equivalent Guidance(1)

2011 237 5.30 1.5 111.32 246 5.78 45%

2012 145 5.37 0.8 95.70 150 5.69 23%

2013 15 5.99 - - 15 5.99 2%

Total 398 5.35$ 2.3 106.10$ 411 5.75$

% Hedged

% Hedged

(1) As of 12/31/2010 pro forma for trades entered into during January 2011; Q4 2011 guidance midpoint held flat beyond 2011

%ofExpectedProductionHedged(1)

%ofExpectedProductionHedged(1)


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Operational Review

Hal Hickey


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Premier Asset Base Focused on Shale Resources

9,000+ drilling locations in the Haynesville/Bossier and Marcellus shale plays

Permian

East Texas / North Louisiana

Texas Louisiana

Pennsylvania

WestVirginia

EXCO Operations Area

Proved Reserves = 1.6 Tcfe3P Reserves = 2.8 Tcfe3P+ Reserves = 13.3 TcfeNet Production(2) = 389 Mmcfe/d

Net acreage(3)

: 614,000Total Employees: 927

Proved Total: 0.1 Tcfe3P Reserves = 0.1 Tcfe3P+ Reserves = 0.2 Tcfe

Net Production: 22 Mmcfe/dNet acreage: 83,000Division Employees: 34

Proved Total: 0.2 Tcfe3P Reserves = 0.4 Tcfe3P+ Reserves = 6.1 TcfeNet Production: 34 Mmcfe/dNet acreage: 379,000Division Employees: 287

Proved Total: 1.3 Tcfe3P Reserves = 2.3 Tcfe3P+ Reserves = 7.0 TcfeNet Production: 333 Mmcfe/dNet acreage: 152,000Division Employees: 232

Appalachia

(1) The reserve and acreage estimates are pro forma for 50% of the Chief acquisition and other pending Appalachian acquisition, both effective as of 12/31/10 using the management price deck,adjusted for differentials and excluding hedge effects

(2) Average production for the week ended 1/5/11, pro forma for 50% of the Chief acquisition and other pending Appalachian acquisition(3) Haynesville and Marcellus acreage is net to EXCOs interest in the JVs; assumes BG Group exercises their option to purchase 50% of recently acquired acreage

1.6 Tcfe of Proved Reserves(1)

0.8 Tcf of shale assets booked asproved with potential for significant

future reserve adds

Current net production of 389Mmcfe/d(2)

Proved reserve life of 11.3 yearsand 57% Proved Developed

Significant Unproved Upside ~300,000 gross acres in ETX/NLA

(~152,000 net), with ~76,000 netacres with Haynesville/Bossiershale potential

~815,000 gross acres inAppalachia (~379,000 net), with

~140,000 net acres with Marcellusshale potential

Total resource base of 13.3 Tcfe

NYMEX 2011 2012 2013 2014 After

NG 4.50$ 5.00$ 5.25$ 5.50$ 6.00$

Oil 90.00$ 90.00$ 90.00$ 90.00$ 90.00$


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2010 Results and Accomplishments

Replaced 576% of production with a direct F&D cost of $0.54 per Mcfe

Strong results driven by the Haynesville

Increased production 33% during 2010

Replaced production monetized in 2009 and2010 divestitures and JV transactions

Ramped up Haynesville development andbolstered position

Increased operated rigs to 22 from 11 at YE 2009and moved to manufacturing mode

Established second core position inHaynesville/Bossier through two acquisitionstotaling ~$400 million in Shelby area

Completed $940(1) million Appalachia JV with BGGroup ($790 million cash plus $150 million carry)

2010

Operatedspuds # 194

Production Bcfe 112

F&D $/Mcfe 0.54$

PDF&D $/Mcfe 1.24$

DevelopmentCAPEX $MM 347$

TotalCAPEX $MM 503$

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

12.31.09Reserves

Ext & Disc Revisions Acq&Div Pricing BG JV Production 12.31.10Reserves

Reserves(Bcfe)

EXCO YE2009 YE2010 Proved Reserve Adjustments

Total Proved Developed

6720

53

(112)

1499

822643

959

646

(133)

12/31/09Reserves

12/31/10Reserves

Note: YE 2009 SEC reserve estimate pricing of $3.87 per Mcf for natural gas and $61.18 perBbl for crude oilNote: YE 2010 SEC reserve estimate pricing of $4.38 per Mcf for natural gas and $79.43 perBbl for crude oil

Year end 2010 estimated SEC proved reservesincreased by 56% to 1.5 Tcfe

Development drilling success has given us the

ability to book proved reserves on 80-acrespacing in core DeSoto Parish area

Increased our proved reserves per section from26.4 Bcfe to 48.8 Bcfe per section at YE 2010

Adjusting for the $351 million of BG carry, our all-in F&D cost would have been $1.03 per Mcfe

EXCO YE 2009 YE 2010 SEC Proved Reserve Adjustments

(1) Subject to final adjustments in 2011

66


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Appalachia Map

Control of Midstream Allows Timely Well Hook-Ups and Market Access

Current TGGT midstream throughput of approximately 1.2 Bcf/d

TGGT System

Legacy TGGT Optimize System Emphasis on 3rd party

Shelby Early Cycle Building header Building facilities

Formulate takeaway plans

Holly Mid Cycle Focus on well

hookups Minor expansions

Appalachia has a limited amount ofinfrastructure in place relative to the size ofthe play but we are initiating construction tomatch development


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19/19

fourth quarter and full year 2010 review

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