EXCO Resources Inc. (NYSE: XCO) said March 30 its lenders have cut its borrowing base by 13% to $325 million amid a slump in oil prices.
EXCO has decided to significantly reduce its drilling activity in 2016 with plans to defer a significant amount of its drilling inventory until commodity prices improve, the release said.
The company has reduced its total 2016 capital budget to $85 million, a reduction of $192 million, or 69%, as compared to its 2015 capex of $277 million.
The Dallas-based company's principal operations are in Texas' Eagle Ford Shale, North Louisiana's Haynesville and Bossier shales and Appalachia's Marcellus Shale.
EXCO currently plans on drilling seven gross wells and completing 15 gross wells in 2016. Development activities will focus on natural gas drilling and completion activities in the Haynesville and Bossier shales.
Small- and mid-sized oil and gas companies are expected to see large cuts to their credit lines when banks reassess reserve-based loans this spring in the backdrop of a 60% drop in oil prices, a Reuters report said.
EXCO's borrowing base cut comes two days after larger producer Whiting Petroleum Corp. (NYSE: WLL) said its base was slashed to $2.75 billion from $4 billion.
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