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    EXCO plans $976M budget for 2011

    EXCO Resources (NYSE: XCO) plans to spend $768.9 million on drilling and completions in 2011 as part of a $976.2 million total budget. 

    The plan contemplates 22 operated drilling rigs running in the Haynesville Shale play, split between north Louisiana (15 rigs) and the Shelby Trough area (7 rigs) in east Texas, 4 rigs drilling in the company’s Appalachian JV with BG Group, and 2 rigs drilling in the Permian. 

    East Texas/North Louisiana JV
    The company plans to spend $757 million net to EXCO within its East Texas/North Louisiana JV with BG Group, of which $683.0 million will be spent for drilling and completion costs, $29.8 million for lease acquisitions, $41.8 million for operations projects, and $2.4 million for seismic data acquisition.

    The Haynesville drilling program is expected to satisfy the company’s lease obligations during 2011. No detailed production guidance is given but the company cites a 40% production growth target. 

    Permian Division

    Roughly $53.4 million will be spent in the Permian Division. Within this budget, $48 million will be spent to drill and complete 72 gross (69.8 net) operated wells. The target zones include Clearfork, Wolfcamp, Canyon and Fusselman formations. The company's net oil production in the region has grown by more than 30% during 2010. 

    Appalachia JV
    The capital budget program net to EXCO for the Appalachia JV with BG Group totals $82.7 million, of which $37.8 million will be spent to drill and complete 52 gross (16.7 net) operated horizontal Marcellus shale wells and drill 12 gross (6.0 net) horizontal Marcellus shale appraisal wells. Other spending includes $25 million for lease acquisitions, $13.5 million for operations projects, and $6.4 million for seismic data acquisition.

    Source:  EXCO Resources, Global Hunter Securities

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