EXCO Resources (NYSE:XCO) is remaining a public company and recently announced the end of the company's review of strategic alternatives. This review was initiated in January 2011 after EXCO Resources received a buyout offer at $20.50 per share from the CEO of the company. (To help understand why some companies go private, read Why Public Companies Go Private.)
TUTORIAL: Financial Statements
Now that it's certain that EXCO Resources will continue to be a public company for a while longer, it seems a good time to review the company's oil and gas assets, along with its recent progress on developing those properties.
EXCO Resources reported proved reserves of 1.5 Tcfe at the end of 2010, utilizing the commodity pricing levels mandated by the Securities and Exchange Commission (SEC). The company reported net production of 514 million cubic feet of natural gas equivalents per day as of the first week of July 2011.
EXCO Resources expects net production in 2011 to average between 501 and 534 million cubic feet of natural gas equivalents per day. The company is also forecasting significant growth through 2015 and expects production to reach between 1.01 and 1.14 billion cubic feet of natural gas equivalents per day by that year.
EXCO Resources will spend $976 million in capital in 2011 to develop oil and gas properties, with a focus on the Haynesville Shale, Marcellus Shale and various properties in the Permian Basin.
EXCO Resources has 152,000 net acres under lease in Louisiana and Texas, with approximately 76,000 net acres prospective for the Haynesville Shale. The company is currently operating 22 rigs here and participated in 20.4 net wells during the second quarter of 2011.
Other operators active in the Haynesville Shale include Petrohawk Energy (NYSE:HK), which has 225,000 net acres under lease. (For more on how these companies profit, see Unearth Profits In Oil Exploration And Production.)
EXCO Resources has 379,000 net acres under lease in the Appalachian Basin, with approximately 140,000 net acres of this leasehold prospective for the Marcellus Shale. The company is currently operating three rigs here and participated in 2.7 net wells during the second quarter of 2011. EXCO Resources will add rigs into the Marcellus Shale during the balance of the year and plans to end the year with as many as six rigs.
Other operators active in the Marcellus Shale include Range Resources (NYSE:RRC), which is putting 86% of its 2011 capital budget into developing this play.
EXCO Resources has also shifted capital towards more oil development and is involved with the development of the Canyon Sands and other shallow oil formations in the Permian Basin. The company participated in 18 gross wells during the second quarter of 2011.
EXCO Resources was not the only exploration and production company to consider going private. Quicksilver Resources (NYSE:KWK) formed a transaction committee to review a buyout offer after receiving an inquiry from a large shareholder. The committee has since disbanded after the shareholder group did not make an offer.
The Bottom Line
EXCO Resources officially ended its review of strategic alternatives and will stay public after a buyout offer from the CEO of the company was not accepted. The company is active in developing oil and gas assets in the onshore portion of the United States. (To learn more about oil and gas, check out Oil And Gas Industry Primer.)
Use the Investopedia Stock Simulator to trade the stocks mentioned in this stock analysis, risk free!
EconomicsAfter the Paris attacks investors are focusing on central bank policy and its potential for divergence: tightened by the Fed while the ECB pursues easing.
Stock AnalysisLearn the biggest potential risks that may affect the price of Pfizer's stock, complete with a fundamental analysis and review of other external factors.
Stock AnalysisA summary of what Allstate Insurance sells and whom it sells it to including recent mergers and acquisitions that have helped boost its bottom line.
Chart AdvisorCopper prices have been under pressure lately and based on these charts it doesn't seem that it will reverse any time soon.
Options & FuturesInvesting during an economic downturn simply means changing your focus. Discover the benefits of defensive stocks.
MarketsLearn how this simple calculation can help you determine a stock's earnings potential.
Stock AnalysisLearn about large changes to Berkshire Hathaway's portfolio. See why Warren Buffett has invested in a commodity company even though he does not usually do so.
Investing BasicsHeld onto a stock for too long? Selling at a loss is never ideal, but it is possible to minimize the damage. Here's how.
InvestingWe look at the meaning of two terms that often get confused, duration and maturity, to set the record straight.
EconomicsWill remaining calm and staying long present significant risks to your investment health?
Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
There are several hedge funds that invest in commodities. Many hedge funds have broad macroeconomic strategies and invest ... Read Full Answer >>
When a company has low working capital, it can mean one of two things. In most cases, low working capital means the business ... Read Full Answer >>
Nonprofit organizations continuously face debate over how much money they bring in that is kept in reserve. These financial ... Read Full Answer >>
A company's working capital turnover ratio can be negative when a company's current liabilities exceed its current assets. ... Read Full Answer >>
Working capital is a commonly used metric, not only for a company’s liquidity but also for its operational efficiency and ... Read Full Answer >>