EXCO Resources, Inc. Closes $725 Million Partnership with Harbinger Group Inc. Related to Conventional Oil and Natural Gas Properties in Texas and Louisiana

Fri Feb 15, 2013 9:00am EST

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DALLAS--(Business Wire)--
EXCO Resources, Inc. (NYSE: XCO) ("EXCO") announced today that it closed its
conventional oil and natural gas partnership (the "Partnership") with Harbinger
Group Inc. (NYSE: HRG) ("HGI"), effective February 14, 2013, and received net
proceeds of $573.3 million, after preliminary closing adjustments. The cash
proceeds received by EXCO were used to repay a portion of its revolving credit
facility. EXCO`s revolving credit facility now has a $900 million borrowing base
with $541 million drawn. 

The Partnership holds conventional oil and natural gas assets previously owned
by EXCO in West Texas, including and above the Canyon Sand formation, as well as
in the Danville, Waskom, Holly and Vernon fields in East Texas and North
Louisiana, including and above the Cotton Valley formation. Under the terms of
the definitive agreements announced on November 5, 2012, the Partnership
acquired the oil and natural gas assets from EXCO for $725 million of total
consideration. The purchase by the Partnership was funded with approximately
$225 million of bank debt, $348.3 million (after preliminary closing
adjustments) in cash contributed from HGI and $119.2 million (after preliminary
closing adjustments) in oil and natural gas properties and related assets being
contributed by EXCO. EXCO has a 50% interest in the general partner of the
Partnership and a 24.5% limited partnership interest in the Partnership. After
giving effect to the 2% general partner interest in the Partnership, EXCO and
HGI own an economic interest in the Partnership of 25.5% and 74.5%,
respectively. The Partnership will be governed by a Board of Directors of the
general partner consisting of two EXCO directors and two HGI directors. EXCO
will continue to manage and operate the assets as contract operator of the
properties and provide services pursuant to contract operating and
administrative service agreements with the Partnership. 

EXCO and HGI intend to opportunistically add incremental cash flow to the
Partnership through the acquisition of other mature, conventional assets over
time. On February 14, 2013, the Partnership agreed to acquire certain
conventional oil and natural gas assets in the Danville, Waskom and Holly fields
in East Texas and North Louisiana, including and above the Cotton Valley
formation, from an affiliate of BG Group plc for $132.5 million, with an
economic effective date of January 1, 2013 and subject to customary closing
adjustments. These properties represent an incremental working interest in
properties that EXCO contributed to the Partnership. This transaction is
expected to close in March 2013. The Partnership intends to fund the acquisition
using its revolving credit agreement. In connection with this acquisition, EXCO
and BG Group plc agreed to remove these assets from their East Texas/North
Louisiana joint venture arrangement, including the termination of the area of
mutual interest that was previously applicable to shallow rights acquisitions in
the East Texas/North Louisiana area. 

Douglas H. Miller, EXCO`s Chief Executive Officer, commented, "We are pleased to
finalize the private partnership transaction with Harbinger Group and look
forward to a long and profitable association. This partnership vehicle allows
our companies the opportunity to capitalize on a robust market for conventional
assets and to build a very substantial entity over the next few years. We are
appreciative of the efforts of our collective teams in getting this transaction
closed." 

The foregoing summary does not purport to be a complete description of the
transaction and related agreements. Interested parties should read EXCO`s other
announcements and public filings regarding this transaction and related
agreements by reviewing EXCO`s filings with the Securities and Exchange
Commission (www.sec.gov). We will provide additional financial and operating
data in connection with our 2012 earnings release scheduled for February 20,
2013 and the related conference call on February 21, 2013. 

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

Harbinger Group Inc. (HGI) is a diversified holding company. HGI`s principal
operations are conducted through subsidiaries that offer life insurance and
annuity products, and branded consumer products such as batteries, personal care
products, small household appliances, pet supplies, and home and garden pest
control products. HGI is principally focused on acquiring controlling and other
equity stakes in businesses across a diversified range of industries and growing
its existing businesses. 

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 our website at www.excoresources.com. Our
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 ("SEC"). EXCO undertakes no obligation to
publicly update or revise any forward-looking statements.

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

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