EXCO Restructuring Plan: New Board Members, Hammer Midstreamers

EXCO.jpgLast week MDN told you that the board at EXCO Resources, a company in financial trouble, is considering “restructuring”–coded language for bankruptcy (see EXCO Resources Board Looks at “Restructuring” – Stock Nosedives). Yesterday EXCO provided an update on their efforts. We learn that the board itself is getting “streamlined”–meaning some board members have been fired and some new board members appointed (from investors who hold a lot of EXCO’s outstanding debt). The company also says it will “target an aggressive restructuring of gathering and transportation contracts”–which means the company is about to threaten midstream companies who have the misfortune of providing services to EXCO, that either those companies will reduce the price of their services, or risk not getting paid at all. Such is life in the rough and tumble world of oil and gas these days…
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EXCO Resources Board Looks at “Restructuring” – Stock Nosedives

EXCO.jpgEXCO Resources was once a sizable player in the Marcellus. They still have 145,000 net acres in the Marcellus, with 124 horizontal Marcellus wells drilled and in production. However, EXCO, as we pointed out in March, has pretty much abandoned the Marcellus at this point (see EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting). Things are getting bleaker at the company. On Friday EXCO announced they’ve formed a special committee from their board of directors to evaluate “options” for the company’s future. One of those options on the table for discussion is “restructuring,” which is coded language for bankruptcy. As soon as the news hit last Friday the companies stock went down even further. It pretty much went over a cliff–from $1.81 last Thursday to $0.72 this morning (down 60%). Here’s the announcement which details which kinds of options are under consideration by the board…
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EXCO Resources 1Q16: Marcellus Production Up w/o New Drilling?

EXCO.jpgEXCO Resources, once a sizable player in the Marcellus–with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells–has pretty much abandoned the Marcellus at this point (see EXCO Reaffirms No New Marcellus Drilling in 2016, Capex Cut 69%). Yesterday EXCO issued its first quarter 2016 update. The update shows the company continues to ignore the Marcellus and instead concentrate on other areas. They drilled 5 wells in Louisiana during 1Q16. EXCO did increase production in the Marcellus from 4Q15 (although down from 1Q15, year over year). The reason for more production although they didn’t drill or complete any new wells? They had been shutting in production due to low prices. The prices went up a bit, and EXCO eased off a bit on the shut-in wells, resulting in a slight bump in production. Here are select portions of yesterday’s EXCO update…
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EXCO Resources – Personnel Changes & Prospects for the Future

EXCO.jpgAs MDN pointed out earlier this month, EXCO Resources, once a sizable player in the Marcellus–with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells–has pretty much abandoned the Marcellus at this point (see EXCO Reaffirms No New Marcellus Drilling in 2016, Capex Cut 69%). Even so, they remain a major player in our region and will return to drilling when the price (one day) goes up again. So we keep an eye on them. Recently there was a personnel change at EXCO to update you on. Also, one of our favorite energy analysts, Richard Zeits (writes for Seeking Alpha), has done a deep dive into EXCO and its prospects for emerging from the current down market intact. He provides some key insights…
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EXCO Reaffirms No New Marcellus Drilling in 2016, Capex Cut 69%

On March 1 EXCO Resources issued a press release with fourth quarter and full year 2015 results. In the release EXCO, once a sizable player in the Marcellus with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells, said there would be no new Marcellus drilling in 2015 (see EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting). Last week EXCO reaffirmed that sentiment, saying they are cutting capital expenditures by 69% in 2016 over what they spent in 2015. EXCO spent $277 million last year, and now plans to spend $85 million this year. The only place they plan to spend money on drilling is a few wells in the Haynesville Shale. Also of note, their borrowing base went down…
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EXCO: No Marcellus Drilling in 2015/2016, NYSE Threatens Delisting

EXCO Resources, once a sizable player in the Marcellus–with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells–has pretty much abandoned the Marcellus at this point. The company filed its fourth quarter and full year 2015 financial and operational update yesterday. In picking through the report, we find that EXCO didn’t drill a single new well in the Marcellus in 2015, and has no plans to do so in 2016. Instead, the company is concentrating their meager $103 million 2016 budget on drilling new wells in North Louisiana and East Texas. According to EXCO they get their highest rate of return (35%) in that area. Buried (and we mean buried) in the report is the news that the New York Stock Exchange has threatened the company with delisting its stock (share price is averaging under $1). The company’s proposed “fix” for the low stock price is a reverse split, combining 10 shares of existing stock into one share of new stock. Zooming out to focus on the company’s financial health, EXCO shows a $1.2 billion loss for 2015–but as with other companies, most of it was a paper loss due to impairments or write-downs of the value for its assets, rather than out-of-pocket money loss. Here’s selected portions of yesterday’s update…
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Top 20 Marcellus Drillers – Ranked by Environmental Impact

top 20Last Friday MDN brought you the news about a professor who devised a clever formula for evaluating the overall environmental impact of 20 Marcellus drillers (see Mirror Mirror on the Wall, Who’s the Best Driller of Them All?). At the time we only knew who the top and bottom companies are in the list. CONSOL Energy took top honors, while ExxonMobil was last or “least” environmentally friendly as compared with the others. We now have the entire list (below). Where does your favorite driller fall in the list?…
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The Dismal Outlook for Marcellus/Utica Drilling in 2016

Yes, it’s bad out there and getting worse–at least in the short term–when it comes to drilling in the Marcellus and Utica Shale. Several major drillers in the northeast have announced cuts–big cuts–and those cuts will impact not only the employees at those companies, but also the many supply chain companies that provide goods and services to them. There were a paltry 19 rigs operating in Pennsylvania last Friday. In January 2014, just two years ago, there were 55 active rigs working in the PA Marcellus. Here’s a recap of who’s cutting how much in 2016 (and perhaps beyond)…
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EXCO Resources Director Buys Another 630K Shares of Stock

As we have previously reported, EXCO Resources board of directors member John Wilder is contractually obligated to buy $40 million worth of EXCO stock within a year of closing a deal between Wilder’s company (Bluescape Resources) and EXCO. Bluescape essentially runs EXCO. Wilder has been a busy beaver (see EXCO Resources Director Continues Stock Buying Spree). He’s just done it again. Last week Wilder purchased another 629,581 shares of EXCO Resources stock worth $579,214.52. He (and his company Bluescape) now own 14,745,961 shares of EXCO stock…
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EXCO Resources Director Continues Stock Buying Spree

Last month MDN told you about EXCO Resource board member John Wilder and his stock buying bender–snapping up large amounts of EXCO stock, which is very cheap right now at $1.08 per share (see EXCO Board Member Goes on Company Stock Buying Bender). A sharp MDN reader pointed out that Wilder, who is Executive Chairman of Bluescape Resources, which essentially runs EXCO, is contractually obligated to buy $40 million worth of EXCO stock within a year after the deal they closed with EXCO. So it’s no surprise that Wilder continues to buy EXCO stock at a brisk pace. The latest round came last week when he grabbed another 540,000 shares for $685,800…
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EXCO Board Member Goes on Company Stock Buying Bender

[Note: This story was updated on Nov. 19, see note below.]

EXCO Resources’ Board of Directors member John Wilder, Jr. has been on a one-man stock-buying bender over the past couple of weeks. You may recall Wilder purchased 297,100 shares of EXCO stock for ~$315,000 at the end of October (see EXCO Stock Short Selling Goes Up; Board Member Buys 297K Shares). Last Friday and again on Monday Wilder purchased another ~$830,000 worth of company stock (~793,000 shares), for a grand total of $1.14 million worth of stock (1,090,063 shares). Why the sudden purchases?…
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EXCO Stock Short Selling Goes Up; Board Member Buys 297K Shares

EXCO Resources is an exploration and production company operating in East Texas/North Louisiana (the Haynesville Shale), South Texas (the Eagle Ford Shale), and in the Marcellus Shale region–in Pennsylvania and West Virginia. EXCO has a sizable Marcellus presence with 145,000 net acres in the Marcellus, having drilled and now operating 124 horizontal Marcellus wells. They’re also a company facing stiff challenges. We’ve enumerated those challenges for more than a year (see our EXCO stories here). Recently there’s been an uptick in “short selling” of EXCO stock. What does that mean? In essence, it means an increasing number of investors believe the price of EXCO’s stock will head lower than it is right now (see our short selling tutorial, “Short Selling” – An Important Signal for Marcellus-Related Companies). Below is the news about an increase in EXCO stock short selling, with a preface to put it in context, so you know how to think about it. Also below is news that John Wilder, an EXCO board member, has just purchased 297,100 shares of EXCO stock for $314,926…
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EXCO’s Top Mgmt Talks About Shutting in Production in Marcellus

shutdownEarlier this week MDN brought you EXCO Resources’ third quarter update, with the news that they have a “strategic plan” to turn things around at the troubled company (see EXCO Resources 3Q15: $42M Loss, Plan to Turn Things Around). EXCO has a sizable Marcellus presence with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells. However, with natgas prices in the northeast the lowest in the country, EXCO is not drilling any new Marcellus wells save one appraisal well earlier this year. On Wednesday EXCO’s top management hosted a quarterly earnings call with analysts. We went fishing through the call transcript to find references to the Marcellus/Utica–to see if there was anything new in their thinking about the northeast. Here’s what we found…
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EXCO Resources 3Q15: $42M Loss, Plan to Turn Things Around

pretty pleaseEXCO Resources is an exploration and production company operating in East Texas/North Louisiana (the Haynesville Shale), South Texas (the Eagle Ford Shale), and in the Marcellus Shale region–in Pennsylvania and West Virginia. EXCO has a sizable Marcellus presence with 145,000 net acres in the Marcellus and having drilled and operating 124 horizontal Marcellus wells. EXCO is also a company in trouble. Their stock price has gone so low the New York Stock Exchange is threatening to de-list them (see More Trouble for EXCO Resources – NYSE Threatens to De-List Stock). In August we pointed out the company’s stock had dropped 96% during the last 5 years, 71% since the beginning of this year, and 86% during the last 12 months (see EXCO Resources #1 Stockholder and his “Distressing” Investment). Moody’s Investors Service isn’t all that impressed either (see Moody’s Downgrades EXCO Resources Credit Profile to the Basement). So it comes as no surprise that EXCO, in issuing their third quarter update, leads off with their “strategic plan” to turn things around (a “pretty please don’t drive us into bankruptcy just yet” plan). Of interest to MDN–EXCO’s Marcellus/Utica program has flatlined this year–no new drilling whatsoever in the northeast…
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Moody’s Downgrades EXCO Resources Credit Profile to the Basement

We don’t mean to be piling on EXCO Resources–honest. We just report what we notice. We’ve been reporting for some time that EXCO appears to be in financial trouble (see our EXCO stories here). Just yesterday we brought you information about EXCO’s #1 stockholder, Wilbur L. Ross, Jr. (see EXCO Resources #1 Stockholder and his “Distressing” Investment). Today we noticed an investment bulletin issued by Moody’s Investors Services, one of the top two or three such credit ratings agencies that evaluate the credit worthiness of companies, governments, even countries. Moody’s issued a notice yesterday about EXCO–essentially downgrading the company’s credit risk to one of Moody’s lowest ratings categories–Caa1 and Caa3…
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EXCO Resources #1 Stockholder and his “Distressing” Investment

EXCO Resources, a sizable independent driller with operations in several shale plays including the Marcellus Shale, is a company in trouble. The price of EXCO’s stock has dropped 96% during the last 5 years, 71% since the beginning of this year, and 86% during the last 12 months. EXCO appeared on David Fessler’s “Death List” of oil and gas companies earlier this year (see 19 Oil/Gas Companies on “Death List” – 8 are in Marcellus/Utica). In April, EXCO experienced a major shake-up and saw the installation of new leadership managing the company and new members on the board of directors (see Bluescape Pulls Strings Installs New CEO, COO at EXCO Resources). The numbers for second quarter weren’t so hot (see EXCO 2Q15: Marcellus Production Down 23%; Net Income Down 1,991%), and the New York Stock Exchange has put the company on notice their stock is about to be de-listed (see More Trouble for EXCO Resources – NYSE Threatens to De-List Stock). We ran across an interesting reference to who owns the most stock in EXCO. Turns out the #1 stockholder is Wilbur L. Ross, Jr., founder of private equity firm WL Ross & Co.–someone known for investing in “distressed” companies. How much EXCO stock does Ross own and how much value has that stock lost for Ross?…
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