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.

Summary
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.

Haynesville Shale
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.)

Marcellus Shale
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.

Permian Basin
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.

Buyouts
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!

Related Articles
  1. Chart Advisor

    Watch This ETF For Signs Of A Reversal (BCX)

    Trying to determine if the commodity markets are ready for a bounce? Take a look at the analysis of this ETF to find out if now is the time to buy.
  2. Investing News

    What You Can Learn from Carl Icahn's Mistakes

    Carl Icahn has been a stellar performer in the investment world for decades, but following his lead these days could be dangerous.
  3. Stock Analysis

    Analyzing Dish Network's Return on Equity (ROE) (DISH, TWC)

    Analyze Dish Network's return on equity (ROE), understand why it has vacillated so greatly in recent years and learn what factors are influencing it.
  4. Investing Basics

    The Importance of Commodity Pricing in Understanding Inflation

    Commodity prices are believed to be a leading indicator of inflation, but does it always hold?
  5. Fundamental Analysis

    5 Must-Have Metrics For Value Investors

    Focusing on certain fundamental metrics is the best way for value investors to cash in gains. Here are the most important metrics to know.
  6. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  7. Fundamental Analysis

    4 Predictions for Oil in 2016

    Learn four predictions for oil markets in 2016 including where prices are heading and the key fundamental factors driving the market.
  8. Fundamental Analysis

    Performance Review: Commodities in 2015

    Learn how commodities took a big hit in 2015 with a huge variance in performances. Discover how the major commodities performed over the year.
  9. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  10. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
RELATED FAQS
  1. When does a growth stock turn into a value opportunity?

    A growth stock turns into a value opportunity when it trades at a reasonable multiple of the company's earnings per share ... Read Full Answer >>
  2. What is the formula for calculating EBITDA?

    When analyzing financial fitness, corporate accountants and investors alike closely examine a company's financial statements ... Read Full Answer >>
  3. How do I calculate the P/E ratio of a company?

    The price-earnings ratio (P/E ratio) is a valuation measure that compares the level of stock prices to the level of corporate ... Read Full Answer >>
  4. How do you calculate return on equity (ROE)?

    Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Full Answer >>
  5. How do you calculate working capital?

    Working capital represents the difference between a firm’s current assets and current liabilities. The challenge can be determining ... Read Full Answer >>
  6. What is the formula for calculating the current ratio?

    The current ratio is a financial ratio that investors and analysts use to examine the liquidity of a company and its ability ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center