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EXCO Resources Inc. Message Board

  • rbacker9 rbacker9 Dec 6, 2013 4:46 PM Flag


    EXCO Resources Could Be Sitting In The Buda Sweet Spot
    Dec 6 2013, 15:59 | 2 comments | about: XCO, includes: CHK, ENCP, MCF


    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. (More...)

    EXCO Resources (XCO) recently acquired 55,000 net acres and farm in rights for an additional 147,000 net acres from Chesapeake Energy (CHK) in the Eagle Ford. The deal includes a complex partnership with Kohlberg, Kravis, & Roberts. The market doesn't seem to like the deal and has sold off EXCO Resources stock, causing the company to accept the CEO's resignation. EXCO Resources has a current market cap of $1.1 billion.

    But unbeknown to most, EXCO Resources could be sitting in the heart of the Buda sweet spot, as detailed in the article Contango Is Sitting On A Buda Oil Bonanza In South Texas. The Buda sits below the Eagle Ford and requires natural fractures to make commercial oil wells. These fractures occur near fault lines, and a large fault line called the Zavala Syncline runs along the Dimmit side of the Zavala and Dimmit border. Because the wells do not need expensive fracture stimulation jobs, they cost less than $4 million to drill and complete.

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