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EXCO Resources, Inc. Reports Fourth Quarter And Full Year 2012 Results

TGGT's capital spending for the fourth quarter of 2012 was $18 million, while the full year 2012 spending totaled $126 million. TGGT expects its capital budget for 2013 will be approximately $40 million, which is primarily associated with field infrastructure pipelines to support drilling activity in North Louisiana and East Texas. The substantial reduction in capital expenditures in 2013 compared to 2012 reflects the completion of all major facility projects coupled with reduction in drilling activities.

Proved Reserves

Our estimated proved reserves as of December 31, 2012, were 1.0 Tcfe with a pre-tax PV-10 of $696 million calculated pursuant to SEC pricing rules. For 2012, the reference price was $2.76 per Mmbtu for natural gas and $94.71 per Bbl for oil which resulted in an adjusted price of $2.54 per Mcf for natural gas and $89.84 per Bbl for oil. For 2012, we began separately reporting NGL reserves. The average price of NGL used in our Proved Reserves computation was $46.57 per barrel and was computed using the average realized price for NGL during the year. Using the average of the ten year futures strip price at December 31, 2012, as adjusted for energy content, quality and basis differentials, of $4.45 per Mcf for natural gas and $82.58 per Bbl of oil, our estimated Proved Reserves would have been 1.6 Tcfe with a pre-tax PV-10 of $1.8 billion.

During 2012, we added 102 Bcfe of Proved Reserves through the drill bit and produced 190 Bcfe. The impact of price declines for natural gas during 2012 resulted in downward revisions to Proved Reserves of 467 Bcfe while performance related revisions increased our Proved Reserves by 246 Bcfe. In addition, the impact of low natural gas prices resulted in reclassification of Proved Reserves to unproved reserves totaling 9 Bcfe as the projects did not meet the five year drilling schedule required by SEC rules. Positive reserve revisions were taken in our Haynesville shale and reflected upward adjustments to production curves arising from more historical data to confirm type curves and lower drilling and completion costs. The following table presents the details of our changes in proved reserves:

       

 

 

Natural gas liquids

Equivalent natural

Oil (Mbbls)

Natural gas (Mmcf)

(Mbbls)

gas (Mmcfe)

Proved Developed Reserves 4,371 917,326 4,784 972,256
Proved Undeveloped Reserves 1,199   18,806   1,855   37,130  
Total Proved Reserves 5,570   936,132   6,639   1,009,386  
 
The changes in reserves for the year are as follows:
January 1, 2012 6,354 1,291,464 1,329,588
Purchase of reserves in place
Discoveries and extensions 492 96,615 424 102,111
Revisions of previous estimates:
Reclassification to unproved reserves (1) (437 ) (6,114 ) (8,736 )
Changes in price (110 ) (466,238 ) (466,898 )
Other factors (26 ) 205,898 6,724 246,086
Sales of reserves in place (2,837 ) (2,837 )
Production (703 ) (182,656 ) (509 ) (189,928 )
December 31, 2012 5,570   936,132   6,639   1,009,386  

(1) Represents Proved Undeveloped Reserves reclassified to unproved pursuant to the five year development rule established by the SEC. This reclassification was a result of decisions not to commit development capital in the current commodity price environment. While these locations qualify as Proved Undeveloped Reserves as they directly offset a proved location, our planned capital programs do not support development at this time, resulting in the reclassification.

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