EXCO Resources Inc. (EXCE, Financial) (“EXCO”)
In early July 2019, the company emerged from bankruptcy and the 1.75 lien term loans were converted to 28.38 equity shares for every US$1,000 in par value, after netting out certain adjustments. The equivalent price was US$9.51 per share of EXCO.
Since it is a private company, I am not at liberty to divulge the latest financial statements but what I can tell you is that my calculation of its PV-10 value was approximately US$1.5 billion (roughly $30 per share) based on New York Mercantile Exchange (NYMEX) forward pricing as of December 31, 2021, and the net proved reserves was 2.6 trillion cubic feet equivalent. The value for PV-10 is considerably higher for June 30, 2022 and can be roughly calculated if one uses the New York Mercantile Exchange (NYMEX) forward pricing for June 30, 2022. Its number of shares outstanding was 51,341,478. We estimate that its EBITDA for the year ending 2022 will be approximately US$225 million.
As a comparison, in 2018, the PV-10 value was US$750 million.
Although a substantial portion of EXCO’s oil & gas production is hedged for the year 2022, we believe that EXCO can fetch much higher prices as the hedges have started to roll off.
From Francis Chou (Trades, Portfolio)'s Chou Associates Fund semiannual 2022 letter.
