Sky Petroleum (SKPI)

[OilStockReport]

Nice looking first quarter...

EXCO Resources (XCO) beat first quarter analyst earnings estimates by 18.2%. It made 13 cents per share as opposed to the 11 cents expected. XCO is determined to stick with its natural gas business. While others are shifting to higher margin oil, XCO will continue to be weighted heavy in gas. Year over year revenues are up 20%. Average daily production increased 17% and cash flow increased 7% over the same time frame. XCO operates in three locations:

Permian-Production of 21 Mmcfe/d
East Texas-Production of 430 Mmcfe/d
Appalachia-Production of 32 Mmcfe/d
XCO continues to emphasize Haynesville/Bossier horizontals with 22 rigs running. I am cautious this name and will continue to be until they increase production in the Permian. This is a liquids rich acreage with good upside for XCO. Analysts estimate earnings growth of 10.9% in 2011 and 42.3% next year

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