EXCO Resources, Inc. provides certain operational information regarding its fourth quarter and full year ended December 31, 2010.

Oil and natural gas production was 32.2 Bcfe for the fourth quarter 2010, or 350 Mmcfe per day, which represents a 70% increase from pro forma fourth quarter 2009 production of 19.0 Bcfe, or 206 Mmcfe per day. EXCO currently estimate net production to average between 520-580 Mmcfe per day for the full year 2011, and expect to exit 2011 with net production in excess of 600 Mmcfe per day.

The increased production highlights the success of the company's Haynesville shale drilling program where EXCO produced 19.0 Bcf (206 Mmcf per day), representing 59% of total production during the fourth quarter 2010 compared with 4.3 Bcf (47 Mmcf per day), or 23% of total production, in the pro forma fourth quarter 2009. During the fourth quarter 2010, EXCO production was impacted by 1.9 Bcf (21 Mmcf per day) of net shut-in production primarily due to shut-in producing wells as they drilled and completed offset wells. EXCO anticipate that as they implement their manufacturing mode of development, certain planned shut-ins will continue. Gross operated Haynesville production increased from an average of 7 Mmcf per day in the fourth quarter of 2008 to 723 Mmcf per day as of December 31, 2010. EXCO achieved this significant production growth primarily by drilling and completing 115 operated wells from the fourth quarter 2008 to December 31, 2010. Including non-operated volumes, the company exited 2010 with a net Haynesville production rate of 234 Mmcf per day and approximately 11 Mmcf per day net shut-in.

In Appalachia, EXCO closed the acquisition of acreage and producing assets from Chief Oil & Gas, LLC (Chief) for $459 million on January 11, 2011. The company recently completed the best Marcellus shale well in their portfolio on this acreage and this well is currently producing approximately 10 Mmcf per day with flowing casing pressure in excess of 3,900 psi. EXCO have 10 additional wells awaiting completion and plan to begin a two rig drilling program on this acreage early in 2011. Pursuant to their joint development agreement, BG Group has the right to participate for 50% of this acquisition.

Year end 2010 estimated proved reserves increased by 56% to 1.5 Tcfe. EXCO replaced 576% of their production with a finding and development cost of $0.54 per Mcfe through the drill bit. Adjusting for the benefit of $351 million of BG carry, "all-in" finding and development cost would have been $1.03 per Mcfe. EXCO's development drilling success has given them the ability to book proved reserves on 80-acre spacing in their core DeSoto Parish Haynesville shale development area.

EXCO's jointly-owned midstream entity with BG Group in East Texas and North Louisiana, TGGT Holdings, LLC (TGGT), had average throughput of 1.0 Bcf per day during the fourth quarter 2010. TGGT expects further increased throughput due to continued development of the company's DeSoto Parish acreage and a major expansion to gather and treat volumes from their upstream assets in the Shelby Trough in East Texas.

The company have entered into additional derivative contracts since the end of the third quarter 2010. Currently, EXCO have 89.9 Bcfe hedged for 2011 at a weighted average price of $5.78 per Mcfe, representing 42-47% of expected production.

Tags: EXCO Resources