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EXCO Resources, Inc. Schedules Earnings Release and Conference Call and Provides Update on Commodity Derivatives

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EXCO Resources, Inc. (NYSE:XCO) today announced that it will be releasing third quarter 2014 results on Tuesday, October 28, 2014, after market close.

EXCO will host a conference call on Wednesday, October 29, 2014 at 9:00 a.m. (Central Time) to discuss the contents of this release and respond to questions. Please call (800) 309-5788 and ask for the EXCO conference call ID# 24918635. The conference call will also be webcast on EXCO’s website at www.excoresources.com under the Investor Relations tab. Presentation materials related to this release will be posted on EXCO’s website prior to the conference call.

A digital recording will be available starting two hours after the completion of the conference call until November 12, 2014. Please call (800) 585-8367 and enter conference call ID# 24918635 to hear the recording. A digital recording of the conference call will also be available on EXCO’s website.

EXCO has recently entered into additional swap contracts and has added collars with short puts (“Costless Three-way Collars”) to its commodity derivatives portfolio. EXCO has historically relied on swap contracts to protect its returns on capital investment and manage its capital structure. Moving forward, EXCO’s commodity derivatives strategy anticipates utilizing swaps, Costless Three-Way Collars and unhedged volumes to provide some exposure to commodity price increases while protecting a component of future cash flows. By adding Costless Three-way Collars, EXCO maintains the opportunity to participate in the commodity price upside to the call price while gaining partial down-side protection. For example, in 2015 for 45,000 Mmbtus per day of natural gas, EXCO would receive:

  • market prices from $3.81 per Mmbtu up to the ceiling price of $4.45 per Mmbtu;
  • $3.81 per Mmbtu on market prices between $3.31 and $3.81 per Mmbtu; and
  • market prices plus $0.50 on market prices below $3.31.

As of October 1, 2014, EXCO had the following commodity derivative financial instruments in place for the volumes and prices shown below:

Q4 Year Ended
Natural Gas 2014 2015 2016
Swap contracts:
Volume (Mmbtus/d) 215,000 107,500
Price per Mmbtu $4.23 $4.22 $-
Collar contracts with short puts:
Volume (Mmbtus/d) 45,000 30,000
Price per Mmbtu:
Call $- $4.45 $4.80
Put $- $3.81 $3.90
Short put $- $3.31 $3.40
Short call contracts:
Volume (Mmbtus/d) 55,000 55,000
Price per Mmbtu $4.29 $4.29 $-
Q4 Year Ended
Crude Oil 2014 2015 2016
Swap contracts:
Volume (Bbls/d) 4,250 2,500
Price per Bbl $95.22 $93.07 $-
Short call contracts:
Volume (Bbls/d) 1,000 1,000
Price per Bbl $100.00 $100.00 $-
Basis swap contracts:
Volume (Bbls/d) 500 250
Price per Bbl $6.03 $6.10 $-

During a historically low natural gas price environment in 2012, EXCO entered into the short call contracts. In exchange for selling these options, EXCO received upfront proceeds which were used to obtain higher fixed prices on natural gas swap contracts that were entered into contemporaneously, resulting in net cashless transactions. The previous table excludes EXCO’s 25.5% proportionate interest in Compass Production Partners’ commodity derivative financial instruments.

EXCO Resources, Inc. is an oil and natural gas exploration, exploitation, acquisition, development and production company headquartered in Dallas, Texas with principal operations in Texas, North Louisiana and the Appalachia region.

Additional information about EXCO Resources, Inc. may be obtained by contacting Chris Peracchi, EXCO’s Vice President of Finance and Investor Relations, and Treasurer, at EXCO’s headquarters, 12377 Merit Drive, Suite 1700, Dallas, TX 75251, telephone number (214) 368-2084, or by visiting EXCO’s website at www.excoresources.com. EXCO’s SEC filings and press releases can be found under the Investor Relations tab.

This release may contain forward-looking statements relating to future financial results, business expectations and business transactions based on estimates and assumptions that are inherently subject to significant economic, industry and competitive uncertainties and contingencies, all of which are difficult to predict and many of which are beyond EXCO’s control. Actual results may differ materially from those predicted as a result of factors over which EXCO has no control. Such factors include, but are not limited to: estimates of reserves, commodity price changes, regulatory changes and general economic conditions. These risk factors and additional information are included in EXCO’s reports on file with the Securities and Exchange Commission. Except as required by applicable law, EXCO undertakes no obligation to publicly update or revise any forward-looking statements.

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