EXCO Resources, Inc. (NYSE: XCO) (“EXCO”) today announced third quarter results for 2012.
- Adjusted net income, a non-GAAP measure adjusting for non-cash gains and losses from derivative financial instruments (derivatives), non-cash ceiling test write-downs and items typically not included by securities analysts in published estimates, was $0.13 per diluted share for the third quarter 2012.
- GAAP results were a net loss of $346 million, or $1.62 per diluted share for the third quarter 2012. The third quarter 2012 includes a $318 million pre-tax non-cash ceiling test write-down of oil and natural gas properties.
- Oil, natural gas and natural gas liquids (NGLs) production was 47 Bcfe, or 512 Mmcfe per day, for the third quarter 2012 compared with 550 Mmcfe per day in the second quarter 2012 and 544 Mmcfe per day in the third quarter 2011. As forecast, for the third quarter 2012, Haynesville/Bossier production declined 8% from the third quarter 2011 as we have reduced our operated drilling rig count from 22 in 2011 to five currently. However, due to increased drilling in the Marcellus shale during 2011 and into 2012, year over year production increased 35% in our Appalachia region. Permian production was flat compared to the second quarter 2012 and third quarter 2011.
- Oil, natural gas and NGL revenues, before cash settlements on derivatives, for the third quarter 2012 were $142 million compared with third quarter 2011 revenues of $207 million. Our average sales price per Mcfe decreased by 27% in the third quarter 2012 to $3.01 from $4.14 in the prior year's quarter. When the impacts of cash settlements from derivatives are considered, oil and natural gas and NGL revenues were $192 million for the third quarter 2012.
- Adjusted earnings before interest, taxes, depreciation, depletion and amortization, ceiling test write-downs and other non-cash income and expense items (adjusted EBITDA, a non-GAAP measure) for the third quarter 2012 were $123 million, compared with $163 million in the prior year's quarter.
- Our direct operating costs were $0.37 per Mcfe for the third quarter 2012 compared with $0.42 per Mcfe for the third quarter 2011. We continue taking significant steps in reducing our operating costs in all of our operating areas in response to the low natural gas price environment. Specific actions implemented during 2012 include shutting in certain marginal producing wells, reducing compressor rentals, renegotiating water disposal arrangements and modifying chemical treatment programs.
- TGGT’s average throughput was approximately 1.5 Bcf per day during the third quarter 2012. Our 50% share of TGGT’s adjusted net income in the third quarter 2012 was $14 million, after adjustments for certain non-cash items during the quarter.
Douglas H. Miller, EXCO’s Chief Executive Officer, commented, "During the third quarter, we met our production goals and, because of increases in average commodity prices, exceeded our revenue expectations. We continued our strong cost containment efforts and achieved reductions in drilling and completion costs, operating expenses and general and administrative expenses. We also exceeded our cash flow goals. So far in 2012, we have experienced cash flow in excess of our capital expenditures and reduced our outstanding debt under our revolving credit agreement.
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