EXCO Resources, Inc. Announces Agreement with BG Group for Joint Development of Its Haynesville Shale and Other Operations in East Texas/North Louisiana

DALLAS--(Business Wire)--
EXCO Resources, Inc. (NYSE:XCO) ("EXCO") today announced that it has reached a
definitive agreement with BG Group plc (LSE:BG.L) ("BG Group") for the joint
development and operation of EXCO`s Haynesville shale and certain other related
natural gas assets located in East Texas/North Louisiana. In addition, EXCO and
BG Group have reached an agreement in principle regarding the joint development
and operation of EXCO`s midstream assets in East Texas/North Louisiana.

Pursuant to a purchase and sale agreement ("PSA"), EXCO will sell BG Group a 50%
interest in its producing and nonproducing assets in a large area of mutual
interest ("AMI") which encompasses most of EXCO`s holdings in East Texas/North
Louisiana, excluding the Vernon Field in Jackson Parish, Louisiana, the Redland
Field in Bossier and Webster Parishes, Louisiana and the Gladewater and Overton
Fields in Gregg, Rusk and Smith Counties in East Texas. The parties will enter
into a joint development agreement at closing with respect to the Haynesville,
Bossier and other deep horizons as well as the Cotton Valley, Hosston and other
shallow horizons. EXCO will continue serving as operator of the joint
development subject to oversight from a Joint Development Operating Committee.

EXCO and BG Group will each own 50% of the acreage, production and reserves
within the AMI. The existing assets within the AMI include approximately 120,000
net acres with approximately 65,000 net acres in East Texas and 55,000 net acres
in Louisiana. Approximately 84,000 net acres are prospective for Haynesville
shale development, and most of this acreage is in the core Haynesville shale
areas of DeSoto and Caddo Parishes in Louisiana and Harrison County, Texas. Also
included is net production of approximately 95 Mmcfe/d from the Cotton Valley
and other shallower horizons and approximately 60 Mmcf/d from the Haynesville
shale. As of December 31, 2008, the Cotton Valley and other shallow rights
included approximately 414 Bcfe of net proved reserves and approximately 445
Bcfe of net probable and possible reserves, based on year-end SEC pricing. The
Haynesville/Bossier shale acreage is under development, and EXCO estimates that
its current acreage position, most of which is held by shallow production,
includes over 1,600 undrilled Haynesville locations containing net potential
reserves of 4 to 6 Tcfe, with significant additional potential in the Bossier
shale. EXCO and BG Group plan an aggressive development program, particularly in
the Haynesville shale, for the remainder of 2009 and in future years. EXCO`s
Haynesville shale results to date have been outstanding as 8 horizontal
Haynesville wells have been drilled and completed in DeSoto Parish with average
gross initial production rates in excess of 23 Mmcf/d on restricted chokes.
These well results will allow booking a significant amount of proved reserves.
The full year 2009 budget calls for a minimum of 34 horizontal Haynesville wells
to be drilled, 27 of which will be operated by EXCO.

EXCO will receive $655 million in cash at closing pursuant to the upstream joint
development transaction, subject to customary closing adjustments. In addition,
BG Group has agreed to fund $400 million of capital development on EXCO`s
behalf, with BG Group paying 75% of EXCO`s drilling and completion costs on the
deep rights until the $400 million commitment is satisfied. The drilling and
completion cost commitment is expected to be satisfied in 2011 or 2012. EXCO and
BG Group will share equally in additional leasehold and asset acquisitions
within the AMI.

In addition to the PSA signed for the upstream assets in East Texas/North
Louisiana, EXCO and BG Group have also reached an agreement in principle whereby
EXCO will sell BG Group a 50% interest in its midstream business (exclusive of
the Vernon Field midstream assets) in the area for $249 million in cash. In
concert with the planned Haynesville shale development, there will be an effort
to develop and grow the midstream business. EXCO currently owns in excess of 700
miles of pipeline and gathering assets in the area and is constructing a 29
mile, 36" diameter header system to transport its Haynesville gas production.
Throughput in the midstream business to be contributed to the joint venture is
approximately 440 Mmcf/d of which approximately 50% is EXCO gas and 50% is third
party gas.

The PSA signed today is subject to normal pre- and post-closing purchase price
adjustments and subject to customary closing conditions, customary regulatory
approval and the consummation of the midstream joint development transaction.
The upstream and midstream joint development transactions are expected to close
in the third quarter of 2009, and both transactions have an effective date of
January 1, 2009.

The total unadjusted cash proceeds to EXCO of $904 million will be used to repay
EXCO Operating Company, LP`s $300 million Senior Unsecured Term Loan with the
remainder to be applied to the outstanding balances under EXCO`s credit
facilities.

Douglas H. Miller, EXCO`s Chief Executive Officer, commented, "We are very
pleased and excited about our joint venture with BG Group. BG Group is a world
leader in developing and marketing natural gas. With its strong technical and
business capabilities in finding and commercializing reserves in 27 countries on
five continents, BG Group will bring considerable expertise to the development
of our Haynesville/Bossier shale assets. In addition, BG Group markets
approximately 3.5 Bcf of natural gas per day through 66 major interstate and
intrastate pipelines serving markets throughout the Midwest and Eastern United
States. BG Group will be an extremely valuable partner in our gas marketing
efforts. EXCO and BG Group are both committed to increasing the leasehold
position and accelerating the drilling and completion efforts in the Haynesville
and Bossier shales in East Texas/North Louisiana. This transaction is a
significant event for EXCO, both in terms of the ability to aggressively pursue
the Haynesville opportunities and in terms of strengthening our balance sheet to
be in a position to capitalize on future opportunities in our core areas. We
look forward to a long, mutually profitable relationship with our new partner."

EXCO was advised by Goldman, Sachs & Co. in these transactions.

EXCO Resources, Inc. is an oil and natural gas exploration, exploitation,
development and production company headquartered in Dallas, Texas with principal
operations in East Texas, North Louisiana, Appalachia, West Texas and the
Mid-Continent.

EXCO will host a conference call on Tuesday, June 30, 2009 at 9:00 a.m. (Dallas
time) to discuss the contents of this release and respond to questions. Please
call (800) 309-5788 if you wish to participate and ask for the EXCO conference
call ID# 17987368. The conference call will also be webcast on EXCO`s website at
www.excoresources.com under the Investor Relations tab. Presentation materials
related to this release will be posted on EXCO`s website on Tuesday, June 30,
2009, before market open.

A digital recording will be available starting two hours after the completion of
the conference call until 11:59 p.m., July 13, 2009. Please call (800) 642-1687
and enter conference call ID# 17987368 to hear the recording. A digital
recording of the conference call will also be available on EXCO`s website.

Additional information about EXCO Resources, Inc. may be obtained by contacting
EXCO`s Chairman, Douglas H. Miller, or its President, Stephen F. Smith, at
EXCO`s headquarters, 12377 Merit Drive, Suite 1700, Dallas, TX 75251, telephone
number (214) 368-2084, or by visiting EXCO`s website at www.excoresources.com.
EXCO`s SEC filings and press releases can be found under the Investor Relations
tab.

This release may contain forward-looking statements relating to future financial
results, business expectations and business transactions.Business plans may
change as circumstances warrant.Actual results may differ materially from those
predicted as a result of factors over which EXCO has no control.Such factors
include, but are not limited to: estimates of reserves, commodity price changes,
regulatory changes and general economic conditions.These risk factors and
additional information are included in EXCO`s reports on file with the
Securities and Exchange Commission.EXCO undertakes no obligation to publicly
update or revise any forward-looking statements.

The SEC has generally permitted oil and natural gas companies, in filings made
with the SEC, to disclose only proved reserves that a company has demonstrated
by actual production or conclusive formation tests to be economically and
legally producible under existing economic and operating conditions.We use the
terms "probable," "possible," "unproved," or "potential" to describe volumes of
reserves potentially recoverable through additional drilling or recovery
techniques that the SEC`s guidelines prohibit us from including in filings with
the SEC.These estimates are by their nature more speculative than estimates of
proved reserves and accordingly are subject to substantially greater risk of
being actually realized by the company.While we believe our calculation of
unproved drillsites and estimations of unproved reserves have been appropriately
risked and are reasonable, such calculations and estimates have not been
reviewed by third party engineers or appraisers.Investors are urged to consider
closely the disclosure in our Annual Report on Form 10-K for the year ended
December 31, 2008 available on our website at www.excoresources.com under the
Investor Relations tab or calling us at 214-368-2084.

EXCO Resources, Inc.
Douglas H. Miller, 214-368-2084
Chairman
or
Stephen F. Smith, 214-368-2084
President

Copyright Business Wire 2009