U.S. natural gas producer, EXCO Resources Inc, announced on Tuesday it has suspended oil exploration in the Eagle Ford shale of South Texas.
Related: Shale Industry Shake-Up
EXCO released its third quarter financial and operational results that showed several areas of growth for its Eagle Ford operations:
- Production increased by 26% over Q3 2014
- Average drill time of 11.2 days with average total measured depth of 15,900 feet
- Improved cost structure with average drilling cost of approximately $5.5 million per well
- Drilled 4 gross (2.8 net) operated horizontal wells
But theses gains are not enough to counter the low prices that have been too much for the struggling company.
“As a result of continued depressed oil prices, EXCO has suspended its development program in the South Texas region for the remainder of 2015. The Company’s acreage in the South Texas region is approximately 81% held-by-production, which allows EXCO flexibility in the timing of development of this region.”
EXCO is in the middle of a strategic restructuring led by turnaround expert and former TXU Corp Chief Executive John Wilder. Going forward, the company plans to implement a new strategy focusing on 1) liability management, 2) operational performance, 3) capital deployment, 4) risk management, 5) portfolio repositioning, and 6) performance management.
Company-wide Q3 Highlights
- Drilled 9 gross (5.2 net) and turned-to-sales 9 gross (4.6 net) operated horizontal wells
- Produced 340 Mmcfe per day
- Production decreased 6%, from the Q2
- Adjusted EBITDA was $62 million, 10% below adjusted EBITDA for the Q2
- Progress with cost savings for gathering, transportation, lease operating and administrative costs