Tue, 16 Dec 2008|
Welcome to the Houston energy financial forum. My name is -- hours and editor -- gas financial journal. I'm here with -- -- Felder who is president of San Antonio based Exco Resources. Gary can you tell our. Viewers hear what message you hope to. Get to the analysts and investors -- conference tonight. Well first of all -- thank you very much for inviting us to the conference I think we participated last year and we that we come back injury much. And we tend to make five or six of these a year where a relatively small company based in San Antonio we need the exposure. In these bigger venues cities like Houston and so on to get to get our message that we feel that we have a strong message for relatively small company and we like to tell -- Can you continue I'll tell us a little bit about where you operate -- -- you're in the maverick basin is that your main area of operation. So you were predominately in the maverick basin we do hold an extremely large acreage position there -- -- well over a million acres. We're pursuing two key shale plays right now both legal for in the pure soft shell you may have heard about our success. Successful well in the pure soft shell about a month or so ago and we've got to to follow up wells in the deal for the look very good we're currently drilling one well onlookers saw one -- on the -- for. Okay right. Can you tell us if your company or how your company has been affected by the current economic downturn. Well as most companies our size we depend almost entirely on our cash flow to drill with -- cash -- like everyone else has been cut about 40% -- -- commodity price downturns. We will adjust our cash our capital spending. The rest of this year and and -- and accordingly we're expecting about it. 35 to 40% decrease and the month span through I don't. We do expect prices to go up however we're sort of targeting mid mixtures -- the pressure. So what is it was an -- drilling budget how -- -- -- cut back there. Are but there was roughly -- 120 you're -- 130 million dollars this year I think it'll be cut down to around eighty million ambulance just that 40% difference. Well look looking at what would like to accomplish in 2000. Well we're very excited about our shale plays. -- -- a lot of potential there we have well over a several TCF's of gas exposure -- to the company. That's a definitely a company maker for us we will focus -- drilling on those two plays at the same time we're continuing our pilot programs -- are heavy oil project the San Miguel. Heavy oil sands. Those two pilots will reached -- meaningful status of -- production probably -- next year again that represents a very large reserve growth of the company. What do you see as your biggest obstacle to achieving. The -- to wants and emotional well continued price declines won't help -- all I know that half. If prices continue to stay where they are now and and don't improve over the next year that will be that -- -- drilling down. And it wouldn't be able to accelerate -- -- we do look for alternate means of financing. And -- several opportunities out there we would of course pursuit. -- let me ask you do you have how do you go about recruiting. Good qualified people for your company's well of course people are very hard to find now. They're premium -- the workforce in this businesses aging. I just you conceive are greater that the having said that I think that there are some young people out there in fact just this year we hired a new college graduate out of University of Texas and San Antonio. Fresh graduate geologist. I think he will. He will mature into someone that will be helpful to the company and a short time. But it is hard -- -- people. The industry is seen a kind of shaking out of the people -- several years ago that that retired took took some retirement packages. I think that. You know it's it's a difficult problem it's probably not enough people in this business right now. Well the the good news I was talking with someone with -- -- minds recently and they said enrollment is up there. So if this downturn doesn't last too long maybe it'll stay -- What we have recruited a young engineer from Texas a and -- in the last few years and hand that we would continue to do that. You know experienced people are difficult -- though we've we've gone to a few service companies recently and are some people away from them. We might continue to do that on the engineering -- -- Gary thank you very much to think in -- -- to thank you done.