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EXCO Resources Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: November 2, 2011 02:28PM

EXCO Resources Inc. (XCO) filed Quarterly Report for the period ended 2011-09-30. Exco Resources has a market cap of $2.54 billion; its shares were traded at around $11.88 with a P/E ratio of 20.2 and P/S ratio of 4.9. The dividend yield of Exco Resources stocks is 1.4%.



Highlight of Business Operations:

For the three months ended September 30, 2011, oil and natural gas revenues were $207.3 million, a 58.2% increase from the oil and natural gas revenues of $131.0 million for the three months ended September 30, 2010. The increase in revenues is primarily a result of the overall increased production in our Haynesville shale operations and an increase in equivalent oil prices, offset by lower natural gas prices. Our average sales price of oil per Bbl, excluding the impact of derivative financial instruments, increased from $72.85 per Bbl for the three months ended September 30, 2010 to $85.69 per Bbl for the three months ended September 30, 2011, or 17.6%. Our average natural gas sales price, excluding the impact of derivative financial instruments, was $3.95 per Mcf for the three months ended September 30, 2011 compared with $4.15 per Mcf for the three months ended September 30, 2010, a decrease of 4.8%.

For the nine months ended September 30, 2011, oil and natural gas revenues were $575.3 million, a 51.3% increase from the oil and natural gas revenues of $380.3 million for the nine months ended September 30, 2010. The increase in revenues is primarily a result of the overall increased production in our Haynesville shale operations and an increase in oil prices, offset by lower natural gas prices. The average sales price of oil per Bbl, excluding the impact of derivative financial instruments, increased from $74.13 per Bbl for the nine months ended September 30, 2010 to $91.53 per Bbl for the nine months ended September 30, 2011, or 23.5%. Our average natural gas sales price, excluding the impact of derivative financial instruments, was $4.08 per Mcf for the nine months ended September 30, 2011 compared with $4.47 per Mcf for the nine months ended September 30, 2010, a decrease of 8.7%.

Production and ad valorem taxes for the three months ended September 30, 2011 increased by $3.6 million, or 120.7%, over the same period in 2010. For the nine months ended September 30, 2011, production and ad valorem taxes decreased to $18.7 million from $19.4 million for the nine months ended September 30, 2010, or 3.6%. On a percentage of revenue basis, before the impact of derivative financial instruments, production and ad valorem taxes were 3.2% of gross oil and natural gas sales for the three months ended September 30, 2011 compared with 2.3% during the same period in the prior year, and 3.3% of gross oil and natural gas sales for the nine months ended September 30, 2011 compared with 5.1% during the same period in the prior year. In our East Texas/North Louisiana area, we are presently receiving severance tax holidays on certain Haynesville shale wells which reduce the effective rate of these taxes.

Our total cash settlements for the three months ended September 30, 2011 increased revenue by $32.9 million, or $0.66 per Mcfe, compared to $43.1 million, or $1.46 per Mcfe, for the same period in 2010. Our total cash settlements for the nine months ended September 30, 2011, including derivatives settled early, increased revenue by $83.1 million, or $0.63 per Mcfe, compared to cash settlements increasing revenues by $166.7 million, or $2.09 per Mcfe, for the same period in 2010. As noted above, the significant fluctuations between settlements of receipts on our derivative financial instruments demonstrates volatility in prices.

The primary factors impacting our cash flows from operations generally include: (i) levels of production from our oil and natural gas properties, (ii) prices we receive from sales of oil and natural gas production, including settlement proceeds or payments related to our oil and natural gas derivatives, (iii) operating costs of our oil and natural gas properties and (iv) costs of our general and administrative activities. Net cash provided by operations for the nine months ended September 30, 2011 was $355.3 million compared with $276.0 million for the nine months ended September 30, 2010. The increase in the current year is due primarily to increases in our oil and natural gas producing operating margins compared with the 2010 period, offset by reductions in cash settlements on our derivatives and higher interest costs. As of October 27, 2011, our cash and cash equivalent balance was $78.4 million and our restricted cash account, which is principally used for Haynesville/Bossier shale development operations, was $152.5 million.

Read the The complete Report



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