- EXCO posted a better-than-guided second quarter.
- Still, the company’s production continued to decline while spending remained above cash flow.
- The third quarter of this year is expected to be the low point in the company’s production trajectory.
- Once the inflection point is reached, EXCO will need to demonstrate a strong recovery to justify the stock’s premium trading multiples.
- In the meantime, the stock's risk/reward profile remains skewed to the downside.