Exco: Marcellus Ops Continuing As Planned

EXCO Resources, Inc. confirmed Friday that its Marcellus shale exploration and production activities, including drilling, are proceeding as planned with no interruption of its 2010 business goals.

According to EXCO's Chairman and Chief Executive Officer, Douglas H. Miller, "Our business plan for Marcellus shale development is proceeding as we projected. EXCO has drilled several Marcellus shale wells in Pennsylvania. We received all necessary permits and approvals to drill and operate our Marcellus wells, and we now have 60 drilling permits for future operations and continue to receive all such permits in a timely fashion. We have one Marcellus shale drilling rig operating in Pennsylvania today."

EXCO issued this confirmation in response to some recent media reports that incorrectly suggested EXCO had been directed to cease some of its activities. The reports referred to a letter EXCO received from a local township supervisor in which a concern was raised over the zoning designation of an area where a single EXCO vertical test well was drilled last October. After consulting with the township, EXCO learned that the letter was sent in response to a complaint made by two local residents. EXCO received all necessary permits to drill this well and met with township officials before the well was drilled. Further meetings have been scheduled to discuss the zoning area designation concern raised by these two residents. Because drilling of the well was completed months ago, the township letter has had no impact or effect on that well. EXCO's Marcellus well drilling and production in other areas of Pennsylvania were completely unaffected by this correspondence.

Chairman and CEO Douglas Miller explained, "Permits to drill and operate Marcellus shale wells in Pennsylvania are under the exclusive authority of the Pennsylvania Department of Environmental Protection. Other aspects of our operations, such as water withdrawal, can also require approvals from the appropriate River Basin Commission. EXCO works closely with all appropriate agencies to ensure all permits and approvals are obtained prior to conducting E&P activities, and every well drilled to date has been fully permitted."

There are more than 2,500 municipalities in Pennsylvania and many of these local government entities have zoning ordinances that designate conditions for development. However, the Pennsylvania Supreme Court ruled last year that the Pennsylvania Oil and Gas Act preempts municipal/township regulation of oil and gas drilling activities and prevents local government entities from regulating oil and gas E&P activities.

"As we have done from the beginning of our Marcellus shale activities in Pennsylvania, we will continue to work with township officials to provide information about our activities," said Miller. "All of our Marcellus shale wells are fully permitted by the Pennsylvania Department of Environmental Protection and all EXCO drilling operations are conducted using proven, safe methods."

EXCO Resources, Inc. is an oil and natural gas exploration, exploitation, development and production company headquartered in Dallas, Texas with principal operations in East Texas, North Louisiana, Appalachia and West Texas.