Encore Acquisition Company Announces Agreements to Acquire Mid-Continent and East Texas Producing Properties for $375 Million in Cash

FORT WORTH, Texas--(Business Wire)--
Encore Acquisition Company (NYSE: EAC) ("Encore" or the "Company") announced
today that it has entered into definitive agreements with EXCO Resources, Inc.
(NYSE: XCO) and an affiliate, EXCO Operating Company, LP to acquire oil and
natural gas properties in the Mid-Continent and East Texas for $375 million in
cash, subject to customary purchase price adjustments and closing conditions.

The Mid-Continent properties are comprised of oil and natural gas assets
primarily located in the Norge Marchand Unit in Grady County, Oklahoma. The
Norge Marchand Unit is a waterflood that produces from the Marchand Sandstone
and has estimated original oil in place of 200 million barrels. Encore`s
internal engineers have forecasted production from this large field as of the
anticipated closing date. Forecasted production is 1,955 barrels of oil
equivalent ("BOE") per day, and the field is 100 percent operated. The acquired
properties also include assets in the Texas Panhandle, southwestern Kansas, and
western Oklahoma. The Mid-Continent package has estimated proved developed
reserves of approximately 12.8 million BOE, 50 percent of which are oil and
natural gas liquids and 100 percent of which are proved developed producing. The
Norge Marchand reserves represent approximately 63 percent of the Mid-Continent
package.

The East Texas properties include long-life assets mainly in the Gladewater
field. This field produces primarily from the Cotton Valley Sands. The East
Texas properties include 495 gross wells with forecasted production of
approximately 17.3 million cubic feet equivalent of natural gas per day.
Gladewater`s estimated proved developed reserves are approximately 10.3 million
BOE, 95 percent of which are natural gas. All of the reserves are proved
developed producing.

Acquisition Parameters

Mid-Continent East Texas Total
Forecasted daily production (BOE/D) 2,906 2,889 5,795
Total proved reserves (million BOE) 12.8 11.8 24.6
Percentage proved developed 100% 100% 100%
Percentage natural gas 50% 96% 72%
Lease operating expense (per BOE) $8.43 $5.47 $6.95
Reserve-to-production ratio (in years) 12.1 11.1 11.6

Jon S. Brumley, Encore`s Chief Executive Officer and President, stated, "This
acquisition is vintage Encore. Purchasing long-life properties at a time when
prices are below long-term marginal costs has been a tried and true strategy
Encore has been practicing for the past 11 years. Acquisition opportunities like
this do not happen very often, so when they become available you must be ready.
The Norge Marchand Unit is a huge old field with over 200 million barrels of
original oil in place and the Gladewater field is a predictable but active area
in the Cotton Valley. The industry is in a state of underinvestment and with
unconventional horizontal plays becoming a larger percentage of lower 48 gas
production, we believe that the market will be ripe for prices to increase in
2010. This acquisition has a production profile that in today`s poor price
environment is much safer and more desirable than a drilling program."

Mr. Brumley went on to state, "Encore Acquisition Company and Encore Energy
Partners are making a great team. I am enthusiastic about the way both companies
complement and aid each other. Having this relationship has made each company
much more valuable."

Encore`s internal engineers have estimated that the proved developed properties
will contribute approximately $40 million in cash flow (revenues less direct
operating expenses) to the Company in 2009 and $65 million in cash flow in 2010,
including hedges entered into in conjunction with the acquisition.

The acquisition is expected to close in August 2009 and will be effective as of
April 1, 2009.

Financing and Liquidity Update

Encore intends to finance the acquisition through proceeds from the sale of
certain properties in the Rockies and Permian Basin to Encore Energy Partners LP
(NYSE: ENP) ("ENP") for $190 million in cash and borrowings under its revolving
credit facility for the remaining amount.

Encore estimates that at June 30, 2009, the Company`s long-term debt, net of
discount, will be approximately $1.2 billion, including $150 million of 6.25%
senior subordinated notes due April 15, 2014, $300 million of 6.0% senior
subordinated notes due July 15, 2015, $225 million of 9.5% senior subordinated
notes due May 1, 2016, $150 million of 7.25% senior subordinated notes due
December 1, 2017, and approximately $175 million and $195 million of outstanding
borrowings under Encore`s and ENP`s revolving credit facilities, respectively.
The estimated borrowings under Encore`s revolving credit facility at June 30,
2009 include the $37.5 million deposit related to the Mid-Continent and East
Texas acquisition. At June 30, 2009, Encore estimates that it will have
approximately $650 million of borrowing capacity under its revolving credit
facility.

Encore`s borrowing base is currently $825 million. The Company will not request
a borrowing base redetermination as a result of this acquisition. The next
borrowing base redetermination for Encore is scheduled for October 2009.

The Company`s acquisition of the Mid-Continent and East Texas properties and the
sale of properties to ENP are intended to qualify as a like-kind exchange under
the Internal Revenue Code, and as such, the gain on the sale of properties to
ENP is not expected to be taxable.

Hedging

In connection with the acquisition, Encore entered into derivative contracts on
over 90 percent of the acquisition`s proved developed producing volumes for 2010
through 2012. The Company purchased oil puts for 625 barrels per day ("Bbls/D")
at a strike price of $67 per barrel ("Bbl") for 2010 and $65 per Bbl for 2011
and 2012. Additionally, the Company entered into oil swap contracts for 625
Bbls/D at an average price of $76.21 per Bbl for 2010, $79.18 per Bbl for 2011,
and $81.04 per Bbl for 2012. With respect to natural gas, the Company entered
into swap contracts with an average NYMEX equivalent price of $6.99 per thousand
cubic feet ("Mcf") for 20,000 Mcf per day for 2010 through 2012.

The Company`s consolidated hedging positions, including the contracts discussed
above, are shown below.

Summary of Commodity Derivative Positions as of June 29, 2009:

Oil Derivative Contracts (a), (b)

Average Weighted Average Weighted Average Weighted
Daily Average Daily Average Daily Average
Floor Floor Cap Cap Swap Swap
Period Volume Price Volume Price Volume Price
(Bbls) (per Bbl) (Bbls) (per Bbl) (Bbls) (per Bbl)

June - Dec. 2009 3,130 $ 110.00 440 $ 97.75 1,000 $ 68.70

2010 880 80.00 440 93.80 1,385 75.78
2,000 75.00 3,000 74.13 1,750 64.08
8,385 62.83 500 65.60 1,000 59.70
1,000 56.00 - - - -

2011 1,880 80.00 1,440 95.41 325 80.00
1,000 70.00 - - 1,060 78.42
4,385 65.00 - - 250 69.65

2012 500 70.00 500 82.05 835 81.19
2,135 65.00 250 79.25 1,050 75.86

Natural Gas Derivative Contracts (a)

Average Weighted Average Weighted Average Weighted
Daily Average Daily Average Daily Average
Floor Floor Cap Cap Swap Swap
Period Volume Price Volume Price Volume Price
(Mcf) (per Mcf) (Mcf) (per Mcf) (Mcf) (per Mcf)

June - Dec. 2009 3,800 $ 8.20 3,800 $ 9.83 - $ -
3,800 7.20 5,000 7.45 - -
6,800 6.57 15,000 6.63 - -
15,000 5.64 - - - -

2010 3,800 8.20 3,800 9.58 25,452 6.46
4,698 7.26 - - 550 5.86

2011 3,398 6.31 - - 27,952 6.48
- - - - 550 5.86

2012 898 6.76 - - 25,452 6.47
- - - - 550 5.86

(a) Oil prices represent NYMEX WTI monthly average prices, while natural gas
prices represent various price points.

(b) In order to partially finance the cost of premiums on certain purchased
floors, the Company may sell floors with a strike price below the strike price
of the purchased floor, thereby entering into a floor spread. In the above
table, the purchased floor component of these floor spreads are shown net and
included with the Company`s other floor contracts. In addition to the floor
contracts shown for 2009, the Company has a floor contract for 1,000 Bbls/D at
$63.00 per Bbl and a short floor contract for 1,000 Bbls/D at $65.00 per Bbl.

A presentation providing maps and other data relating to the transaction is
available on the Company`s website at www.encoreacq.com.

About the Company

Encore Acquisition Company is engaged in the acquisition and development of oil
and natural gas reserves from onshore fields in the United States. Since 1998,
Encore has acquired producing properties with proven reserves and leasehold
acreage and grown the production and proven reserves by drilling, exploring,
reengineering or expanding existing waterflood projects, and applying tertiary
recovery techniques.

Cautionary Statement

This press release includes forward-looking statements, which give Encore's
current expectations or forecasts of future events based on currently available
information. Forward-looking statements in this press release relate to, among
other things, estimated reserves and production, estimated reserve-to-production
ratios, decline rates, expected lease operating expenses, expected benefits from
derivative contracts, expected risks related to the acquisition, the expected
closing of the transactions and the anticipated benefits therefrom, and any
other statements that are not historical facts. The assumptions of management
and the future performance of Encore are subject to a wide range of business
risks and uncertainties and there is no assurance that these statements and
projections will be met. Factors that could affect Encore's business include,
but are not limited to: the risks associated with drilling of oil and natural
gas wells; Encore's ability to find, acquire, market, develop, and produce new
reserves; the risk of drilling dry holes; oil and natural gas price volatility;
risks associated with derivative transactions (including the costs associated
therewith and the ability of counterparties to perform thereunder);
uncertainties in the estimation of proved, probable, and possible reserves and
in the projection of future rates of production and reserve growth; inaccuracies
in Encore's assumptions regarding items of income and expense and the level of
capital expenditures; uncertainties in the timing of exploitation expenditures;
operating hazards attendant to the oil and natural gas business; risks related
to Encore's high-pressure air injection program; drilling and completion losses
that are generally not recoverable from third parties or insurance; potential
mechanical failure or underperformance of significant wells; climatic
conditions; availability and cost of material and equipment; the risks
associated with operating in a limited number of geographic areas; actions or
inactions of third-party operators of Encore's properties; Encore's ability to
find and retain skilled personnel; diversion of management's attention from
existing operations while pursuing acquisitions or joint ventures; availability
of capital; the ability of lenders and derivative counterparties to fulfill
their commitments; the strength and financial resources of Encore's competitors;
regulatory developments; environmental risks; uncertainties in the capital
markets; uncertainties with respect to asset sales; general economic and
business conditions (including the effects of the worldwide economic recession);
industry trends; and other factors detailed in Encore's most recent Form 10-K
and other filings with the Securities and Exchange Commission. If one or more of
these risks or uncertainties materialize (or the consequences of such a
development changes), or should underlying assumptions prove incorrect, actual
outcomes may vary materially from those forecasted or expected. Encore
undertakes no obligation to publicly update or revise any forward-looking
statements.

Encore Acquisition Company, Fort Worth
Bob Reeves, Chief Financial Officer
817-339-0918
rcreeves@encoreacq.com
or
Kim Weimer, Investor Relations
817-339-0886
kweimer@encoreacq.com

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