EXCO Resources (XCO)

Q4 2010 Earnings Call

February 24, 2011 10:00 am ET

Executives

W. Clarke - Chief Compliance Officer and Assistant General Counsel

Douglas Miller - Chairman of the Board, Chief Executive Officer, Chairman of EXCO Holdings, Chief Executive Officer of EXCO Holdings

Paul Rudnicki - Vice President of Financial Planning & Analysis

Harold Hickey - Chief Operating Officer and Vice President

Stephen Smith - Vice Chairman, President and Secretary

Analysts

Jack Aydin - KeyBanc Capital Markets Inc.

Sachin Shah - ICAP

Presentation

Operator

Compare to:
Previous Statements by XCO
» EXCO Resources Management Discusses Q3 2010 Results - Earnings Call Transcript
» EXCO Resources, Inc. Q2 2010 Earnings Conference Call Transcript
» EXCO Resources, Inc. Q1 2010 Earnings Call Transcript

Good morning. My name is Michelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Fourth Quarter 2010 Earnings Release Conference Call. [Operator Instructions] Mr. Miller, you may begin your conference.

Douglas Miller

Thank you very much. Welcome everybody to our fourth quarter and year end conference call. Before I get started, one of our lawyers is going to have to read our disclaimer. So go ahead, Justin.

W. Clarke

Please note that you can go to our website at excoresources.com to access the presentation slides we'll discuss on today's call. The statements that may be made on the call regarding future expectations, plans or forecasts including future financial and operational performance, business strategies, market prices and derivative financial instrument activities and other statements that are not historical facts are forward-looking as defined in our U.S. Federal Securities laws. You are cautioned not place undue reliance on those forward-looking statements because our business plans and forecasts may change. Please refer to Slide 18 to 19 of the presentation for a complete text of our forward-looking statements.

In addition, our website for the earnings release, which contains additional information regarding the preparation of our financial disclosures including reconciliations of certain non-GAAP financial measures will be discussed on today’s call. Doug?

Douglas Miller

We did have a great quarter. We've got everybody in the room here, so when we get into the questions, we can answer quite a few questions but I just want to tell you that we have been very busy. We are in the throes of a go-private and the only things I can even talk about are what that of public domain so keep that in mind when you're asking questions and we'll get started.

Slide 3. They narrowed me down to one slide, I usually have 10 or 15 but they do one in the hook.

Fourth quarter production grew year-over-year 70%, and I think you've heard me talk in the past that we have certain targets this year. We wanted to exit first quarter at 450, second quarter at 500, third quarter at 550 and fourth quarter of '11 at 600. We're on target. Actually, we have -- what were we counting our shut-ins, we do have about -- how much shut in?

Stephen Smith

A little over 30 million.

Douglas Miller

30 million a day shut ins and we're producing today about 415. So we're at about 445 if we can turn those on. But we'll get into the shut-in feature of our reserves here in a little while at some parts come up and ensure. But again, production growth was on target or slightly better.

Reserves replaced 576%. I want everybody to know that we spent more time on our reserves than we have in my 30 year history. March's team, for the last three months, we've been working this things within you SEC rules are scrubbed as much you can scrub a reserve. So up 56% to 1.5, F&D cost, it says $0.54 here but that includes the carry. We'll get over that slide here in a minute.

Haynesville, we started 80-acre spacings. It's been very successful and we'll get it operationally where are plants are, but we did also make a couple of acquisitions down in that and what consider a similar rocky area down in the Shelby Trough. Initial results have been very good, Harold will get into that, we are trying to add in both areas.

We did venture, BG joint venture in Appalachia. We have two or three targeted areas up there. We did close one transaction since, even since we announced to go private and achieve. We do have a program going on, only one week, but some pretty good results so far up there. Again, we're looking at per additional acquisitions up there.

We're still running the company, we're not standing still. An acquisition, like look at it, when we do the deal, if we weren't going private, if the answer is yes and would we do the deal if we were private and the answer is yes, we'll continue to do.

So we continue to look at deals. We're very busy around here.

And anyhow, we'll get into our operational success. And it's quite exciting. Steve, I want you take over.

Stephen Smith

Let's go to Slide 5 which is just a snapshot of the financial aspects of the quarter and the year. We were at $114 million of adjusted EBITDA for the quarter, which is about the same as it was from the third quarter, even though we had about $0.25 less average gas price. So good solid quarter in all respects. On the full year again, we're up into the close to $500 million of EBITDA. Adjusted EBITDA is $478 million. We're expecting that to be in excess of $675 million or so for the year. I think we're forecasting that toward $683 million, which is would be a 4.3% increase.

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