Exco Will Bring 18 Wells Online with $103M Budget in 2016

Exco Will Bring 18 Wells Online with $103M Budget in 2016

Exco Resources (NYSE: XCO) is an active operator in the Haynesville, Eagle Ford and Marcellus plays. XCO has cut the budget once again after finishing 2015 $23 million under the estimated budget of $300 million, budgeting $103 million for 2016. During the first half of 2016 they expect to spend $70 million on drilling and completion activities, a 59% decrease from 2015 first half spend. 

Improved Well Design in the Haynesville and Longer Laterals in East Texas

East Texas Asset Team Reducing Costs

  • 23% increase in production from Q3’15 to Q4’15
  • Drilling 7,500 foot laterals on average
  • Continuing to reduce D&C costs per lateral foot
    • Down to $1,341 per foot currently from $1,461 in 2015
  • No drilling activity planed for the first half of 2016
    • Completing 9 carry in wells during the first half of the year spending $28 million

Two Rigs Continue Drilling in Northern Louisiana

  • Production trending downward due to zero development activity during Q4’15
  • Using 2,700 pounds of proppant per lateral foot, mimicking the East Texas completion design
  • Two rig program to drill and complete 9 wells during the first half of 2016 spending $42 million 

The plot below shows well completions in the Haynesville from the start of 2015 to present and the relationship between lateral length, proppant and initial production rates. There is a clear difference between the laterals being drilled in Northern Louisiana and East Texas along with a slight increase in performance in the East Texas wells.

energent-EXCO-haynesville-well-cohort

Eagle Ford Program Paused

  • No drilling activity planed for the first half of 2016
  • Acreage position is mainly held by production
  • Production has remained flat at 7,300 Boe per day from Q3’15 to Q4’15
  • XCO has been utilizing Schlumberger for 76% of the companies frac jobs from January 2015 forward using raw sand only
  • No recent jobs completed, last job was in September of 2015

energent-EXCO-eagle-ford-activity-map

 

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