Exco said that, out of the total budget allocation, $150 million has been reserved for the exploitation of its Marcellus shale position in Appalachia and $25 million is for additional Appalachian shallow drilling related to its recently acquired shallow natural gas properties.

The $150 million earmarked for the Marcellus shale area in Appalachia will fund leasing of additional acreage beyond the current company Marcellus shale holdings, drilling of both horizontal and vertical wells, and development of infrastructure to support future growth of this resource opportunity.

The company plans to begin drilling Marcellus shale wells in the second quarter of 2008. The revised 2008 capital spending budget of $800 million is expected to be fully funded through cash flow from operations.