EXCO Resources, Inc. Reports Fourth Quarter and Full Year 2012 Results

Wed Feb 20, 2013 4:01pm EST

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DALLAS--(Business Wire)--
EXCO Resources, Inc. (NYSE: XCO) ("EXCO") today announced fourth quarter and
full year operating and financial results for 2012.

* Adjusted net income, a non-GAAP measure adjusting for non-cash gains and
losses from derivative financial instruments (derivatives), non-cash ceiling
test write-downs and items typically not included by securities analysts in
published estimates, was $0.17 per diluted share for the fourth quarter 2012
compared to $0.09 per diluted share for the fourth quarter 2011. Adjusted net
income for the full year 2012 was $0.38 per diluted share compared to $0.56 per
diluted share for the full year 2011. 
* GAAP results were a net loss of $269 million, or $1.25 per diluted share, for
the fourth quarter 2012 and a net loss of $1.4 billion, or $6.50 per diluted
share, for the full year 2012. The fourth quarter and full year 2012 include a
$324 million and $1.3 billion, respectively, pre-tax non-cash ceiling test
write-down of oil and natural gas properties. 
* Oil, natural gas and natural gas liquids (NGL) revenues, before cash
settlements on derivatives, for the fourth quarter 2012 were $152 million
compared with fourth quarter 2011 revenues of $179 million. Our average sales
price per Mcfe decreased to $3.47 per Mcfe for the fourth quarter 2012 from
$3.49 in the prior year's quarter. When the impacts of cash settlements from
derivatives are considered, oil, natural gas and NGL revenues were $192 million
for the fourth quarter 2012, compared with $231 million in the fourth quarter
2011. Oil, natural gas and NGL revenues for the full year 2012, excluding
derivatives, were $547 million and $749 million when settlements from
derivatives are included. Revenues for the full year 2011 were $754 million,
excluding derivatives, and $890 million inclusive of cash settlements from
derivatives. 
* Adjusted earnings before interest, taxes, depreciation, depletion and
amortization, ceiling test write-downs and other non-cash income and expense
items (adjusted EBITDA, a non-GAAP measure) for the fourth quarter 2012 was $122
million compared with $151 million in the prior year's quarter and $468 million
for the full year 2012 compared with $605 million for the full year 2011. 
* Oil, natural gas and NGL production was 44 Bcfe, or 477 Mmcfe per day, for the
fourth quarter 2012 compared with 512 Mmcfe per day in the third quarter 2012
and 556 Mmcfe per day in the fourth quarter 2011. The declines in production
reflect the impacts of our reduced drilling program. At the end of 2011, we had
24 operated drilling rigs throughout our operating regions. During 2012, we
reduced that operated rig count to five. Fourth quarter 2012 production from our
Haynesville/Bossier shale was 334 Mmcf per day compared with 407 Mmcf per day in
the prior year's quarter. Year over year production increased 5% in our
Haynesville/Bossier shale area. Fourth quarter 2012 production in our Appalachia
region was 50 Mmcfe per day, a 22% increase from fourth quarter 2011. Year over
year production increased 30% in our Appalachia region. The increase reflects
impacts from our horizontal drilling of Marcellus shale wells. Permian
production was flat year over year and compared to prior quarters. 
* Our direct operating costs were $0.41 per Mcfe for the fourth quarter 2012
compared with $0.47 per Mcfe for the fourth quarter 2011. We continue taking
significant steps in reducing our operating costs in all operating areas in
response to the low natural gas price environment. Specific actions implemented
during 2012 include shutting in certain marginal producing wells, reducing
compressor rentals, renegotiating water disposal arrangements and modifying
chemical treatment programs. 
* TGGT`s average throughput was approximately 1.4 Bcf per day during the fourth
quarter 2012, compared with 1.5 Bcf per day during the fourth quarter 2011. Our
50% share of TGGT`s adjusted net income in the fourth quarter 2012 was $13
million, after adjustments for certain non-cash items during the quarter,
compared to $10 million during the fourth quarter 2011. 
* On February 14, 2013, we formed a partnership with Harbinger Group Inc. (HGI).
Pursuant to the definitive agreements governing the transaction, we contributed
our conventional non-shale assets in East Texas and North Louisiana and our
shallow Canyon Sand and other assets in the Permian Basin in West Texas to the
partnership in exchange for cash consideration of $573 million, after customary
preliminary purchase price adjustments, a 24.5% limited partner interest and a
50% interest in the general partner of the partnership. After giving effect to
the 2.0% general partner interest in the partnership, we own an economic
interest of 25.5% in the partnership. Proceeds received from the formation of
the partnership were used to reduce outstanding borrowings under our credit
agreement. The partnership has its own credit facility with an initial borrowing
base of $400 million to fund its operations and seek accretive acquisitions.
Following are selected operating data and financial metrics for 2012 reflecting
the pro forma impacts to EXCO for the full year 2012 from the formation of the
partnership with HGI:

                                                                                                                                                      
                                                                        Pro forma adjustments                                                         
 (dollars in thousands, except per unit rate)    Historical EXCO        Total Partnership               EXCO's 25.5% share        Pro forma EXCO      
 Reserves (as of December 31, 2012):                                                                                                                  
 Total proved (Mmcfe)                                      1,009,386            (404,789  )                         103,221                 707,818   
 Production:                                                                                                                                          
 Total production (Mmcfe)                                  189,928              (36,647   )                         9,345                   162,626   
 Average production (Mmcfe/d)                              519                  (100      )                         26                      445       
 Revenues:                                                                                                                                            
 Revenues, excluding derivatives                 $         546,609      $       (159,447  )             $           40,659        $         427,821   
 Average realized price ($/Mcfe)                           2.88                 4.35                                4.35                    2.63      
 Expenses:                                                                                                                                            
 Direct operating costs                                    77,127               (46,824   )                         11,940                  42,243    
 Per Mcfe                                                  0.41                 1.28                                1.28                    0.26      
 Production and ad valorem taxes                           27,483               (18,956   )                         4,834                   13,361    
 Per Mcfe                                                  0.14                 0.52                                0.52                    0.08      
 Gathering and transportation                              102,875              (12,841   )                         3,275                   93,309    
 Per Mcfe                                                  0.54                 0.35                                0.35                    0.57      
 Excess of revenues over operating expenses      $         339,124      $       (80,826   )             $           20,610        $         278,908   
                                                                                                                                                      


Douglas H. Miller, EXCO`s Chief Executive Officer, commented, "We recognized
that 2012 would be a difficult year in terms of natural gas prices so we
undertook actions to position ourselves to meet the challenges low prices
present. We reduced our drilling rig count from 24 rigs at year-end 2011 to five
at the end of 2012. We reduced our employee headcount by 16% and our contractor
headcount by 62%. We took other aggressive cost cutting measures as well,
reducing our capital spending by 48%, our direct operating expenses by 11% on a
per Mcfe basis, and our general and administrative costs by 23% on a per Mcfe
basis, year over year. In spite of the decreased drilling and spending, our
production increased 3% year over year. 

"In addition to significant cost reductions, we also negotiated and entered into
a private limited partnership with Harbinger Group, Inc. which provided us with
$573 million to reduce our debt as well as a 25.5% ongoing interest and a
vehicle to conduct conventional asset acquisitions in the future. 

"We intend to pursue producing property acquisitions during 2013 across core and
new areas, and also plan to engage partners to provide financial support for
undrilled locations and drilling costs associated with future acquisitions. We
are convinced that the economics of producing property acquisitions are
presently superior to drill bit economics. 

"We are encouraged that natural gas prices have increased since the 2nd quarter
2012 and are optimistic about the future of the natural gas industry in general
and our prospects for the future. We begin 2013 with significant liquidity, a
much better price than the average realized in 2012 and an acquisition strategy
which should produce stronger results. 

"We appreciate the tremendous efforts of our employees and contractors during
the difficult year just completed, we are grateful for the support of our
Directors and Shareholders, and we look forward to implementing our strategy
during 2013 and beyond to improve our results." 

Net income

Our reported net income (loss) shown below, a GAAP measure, includes certain
items not typically included by securities analysts in their published estimates
of financial results. The following table provides a reconciliation of our net
income (loss) to the non-GAAP measure of adjusted net income:

                                                                                                                                                                                                                                                                                       
                                                                                             Three Months Ended                                                                            Years Ended                                                                                 
                                                                                             December 31, 2012                               December 31, 2011                             December 31, 2012                                December 31, 2011                          
 (in thousands, except per share amounts)                                                    Amount                   Per share              Amount                   Per share            Amount                     Per share             Amount                  Per share          
 Net income (loss), GAAP                                                                     $    (269,029  )                                $    (166,652  )                              $    (1,393,285  )                               $    22,596                                
 Adjustments:                                                                                                                                                                                                                                                                          
 Non-cash mark-to-market (gains) losses on derivative financial instruments, before taxes         (8,394    )                                     (36,425   )                                   135,945                                          (84,313  )                            
 Non-cash write down of oil and natural gas properties, before taxes                              324,040                                         233,239                                       1,346,749                                        233,239                               
 Adjustments included in equity income                                                            5,405                                           -                                             27,088                                           -                                     
 Non-recurring other operating items                                                              8,200                                           118                                           17,928                                           27,660                                
 Deferred finance cost amortization acceleration                                                  -                                               1,689                                         3,000                                            1,689                                 
 Income taxes on above adjustments (1)                                                            (131,700  )                                     (79,448   )                                   (612,284    )                                    (71,310  )                            
 Adjustment to deferred tax asset valuation allowance (2)                                         107,612                                         66,661                                        557,314                                          (9,036   )                            
 Total adjustments, net of taxes                                                                  305,163                                         185,834                                       1,475,740                                        97,929                                
 Adjusted net income                                                                         $    36,134                                     $    19,182                                   $    82,455                                      $    120,525                               
                                                                                                                                                                                                                                                                                       
 Net income (loss), GAAP (3)                                                                 $    (269,029  )         $     (1.25  )         $    (166,652  )         $     (0.78  )       $    (1,393,285  )         $     (6.50  )        $    22,596             $     0.11         
 Adjustments shown above (3)                                                                      305,163                   1.42                  185,834                   0.87                1,475,740                   6.88                 97,929                   0.46         
 Dilution attributable to stock options (4)                                                       -                         -                     -                         -                   -                           -                    -                        (0.01  )     
 Adjusted net income                                                                         $    36,134              $     0.17             $    19,182              $     0.09           $    82,455                $     0.38            $    120,525            $     0.56         
                                                                                                                                                                                                                                                                                       
 Common stock and equivalents used for earnings per share (EPS):                                                                                                                                                                                                                       
 Weighted average common shares outstanding                                                       214,672                                         214,137                                       214,321                                          213,908                               
 Dilutive stock options                                                                           816                                             1,479                                         -                                                2,797                                 
 Shares used to compute diluted EPS for adjusted net income                                       215,488                                         215,616                                       214,321                                          216,705                               


(1) The assumed income tax rate is 40% for all periods.
(2) Deferred tax valuation allowance has been adjusted to reflect the assumed
income tax rate of 40% for all periods.
(3) Per share amounts are based on weighted average number of common shares
outstanding.
(4) Represents dilution per share attributable to common stock equivalents from
in-the-money stock options. 

Cash flow

Our cash flow from operations before changes in working capital was $105 million
for the fourth quarter 2012. We use our cash flow and available borrowing
capacity in our credit agreement to fund our drilling and development programs
and acquire producing properties.

                                                                                                                                                                                                                  
                                                                                                                              Three Months Ended                           Years Ended                            
                                                                                                                              December 31,                                 December 31,                           
 (in thousands)                                                                                                               2012                    2011                 2012                     2011          
 Cash flow from operations, GAAP                                                                                              $    100,009            $    73,209          $    514,786             $    428,543  
 Net change in working capital                                                                                                     (2,621   )              64,551               (126,937  )              103,973  
 Non-recurring other operating items                                                                                               8,000                   (474     )           16,625                   21,339   
 Cash flow from operations before changes in working capital and non-recurring other operating items, non-GAAP measure (1)    $    105,388            $    137,286         $    404,474             $    553,855  


(1) Cash flow from operations before working capital changes and non-recurring
other operating items are presented because management believes it is a useful
financial indicator for companies in our industry. This non-GAAP disclosure is
widely accepted as a measure of an oil and natural gas company`s ability to
generate cash used to fund development and acquisition activities and service
debt or pay dividends. Operating cash flow is not a measure of financial
performance pursuant to GAAP and should not be used as an alternative to cash
flows from operating, investing, or financing activities. Non-recurring other
operating items have been excluded as they do not reflect our on-going operating
activities. 

Operations activity and outlook

We spent $77 million on development and exploitation activities, drilling and
completing 43 gross (18.9 net) operated wells in the fourth quarter 2012,
compared with 38 gross (18.2 net) operated wells during the third quarter 2012.
In addition, we participated in 1 gross (0.2 net) well operated by others (OBO)
during the fourth quarter 2012. We had an overall drilling success rate of 98%
for the fourth quarter 2012. Our total capital expenditures, including leasing
and net of acreage reimbursements from BG Group, were approximately $125 million
in the fourth quarter 2012 and approximately $500 million for the full year
2012. We spent $403 million of net capital on full year 2012 development and
exploration activities as we drilled and completed 175 gross (76.0 net) wells
during 2012. 

Our actual capital expenditures for the fourth quarter 2012, the full year 2012
and our 2013 capital budget are presented in the following table:

                                                                                                   
                                       2012 Actuals                                                
 (in thousands)                        Fourth Quarter           Full Year         2013 Budget      
 Capital expenditures:                                                                             
 Development capital                   $         76,678         $      403,342    $       214,000  
 Gas gathering and water pipelines               39                    1,044              1,000    
 Lease acquisitions and seismic (1)              37,925                47,025             17,000   
 Capitalized interest                            5,317                 23,809             25,000   
 Corporate and other                             5,264                 24,494             16,000   
 Total                                 $         125,223        $      499,714    $       273,000  


(1) Net of acreage reimbursements from BG Group totaling $2.1 million during
2012. 

The 2013 capital budget, as approved by our Board of Directors, is highly
dependent upon natural gas prices and is therefore subject to change. Further,
our renewed focus on acquisitions of producing properties and our interest in
obtaining outside participation in certain of our drilling activities and
acquisitions of drilling locations could have an impact on the 2013 approved
capital budget. We will update our capital spending plans on a quarterly basis
during the year. 

Haynesville/Bossier Shale

Our horizontal Haynesville shale development program continues to be a
significant asset for EXCO and continues to yield strong results. As of December
31, 2012, our Haynesville/Bossier shale operated production was 1,096 Mmcf per
day gross (328.1 Mmcf per day net) and with the addition of production from our
OBO wells, we had 353.0 Mmcf per day net of total Haynesville/Bossier shale
production. In response to low natural gas prices, we have significantly reduced
our drilling program. In 2011, we had 22 operated rigs in the
Haynesville/Bossier shale play at our peak. We began to reduce our rig count in
late 2011 and currently have three operated rigs drilling in the play. We will
continue to assess product pricing and project economics to make further
decisions on rig count. Our development drilling program for 2012 focused in
DeSoto Parish, Louisiana where we continued our 80-acre spacing manufacturing
program. We currently have 34 units fully developed in the Haynesville in DeSoto
Parish. During 2012, we drilled 58 gross (21.8 net) operated wells in the
Haynesville/Bosser shale play. We drilled and completed 20 gross (5.9 net)
operated Haynesville horizontal wells and participated in 1 gross (0.2 net) OBO
Haynesville horizontal well during the fourth quarter 2012. We utilized an
average of five operated rigs and spud 10 operated horizontal wells during the
quarter. We currently have no OBO rigs drilling. In total, we have 378 operated
horizontal wells and 178 OBO horizontal wells flowing to sales. 

During 2013, we plan to drill 26 gross (15.5 net) operated wells with a three
rig program. We plan to complete and turn to sales 42 gross wells (22.1 net),
including completions carried into 2013 from wells drilled in late 2012. 

The average initial production rate from our operated Haynesville horizontal
wells completed in the fourth quarter 2012 in DeSoto Parish was 12.7 Mmcf per
day with an average 7,550 psi flowing casing pressure on an average 18/64ths
choke. This maximum choke size is indicative of our modified restricted choke
management program in DeSoto Parish. We have completed 69 wells in 11
development units in 2012 in DeSoto Parish and all of the wells were managed
with this modified choke program. Our well performance has been very consistent.
The average initial production rate for all 71 wells completed in 2012 in DeSoto
Parish was 12.7 Mmcf per day with an average 7,784 psi flowing casing pressure
on an average 18/64ths choke. 

Our cost reduction and efficiency program is delivering positive results. We
continue to see improvements in drilling times, stimulation costs and overall
capital efficiency. Our DeSoto Parish well costs in the fourth quarter 2011
averaged $9.5 million per well. With the changes implemented to date, our
current estimated well cost in the DeSoto Parish area is $8.0 million,
approximately $1.5 million or 16% less than actual costs at year end 2011. The
largest factors in our cost reduction efforts to date are fracture stimulation
market conditions, fracture stimulation design changes, modified tubing design
and changes to the installation procedure, reduced drilling times and overall
improved management of all rental items. We have realized significant
improvements in lease operating cost efficiencies since year end 2011. From the
fourth quarter 2011 to current, we have realized a 32% reduction in total direct
lease operating costs. Our new restricted choke program has contributed to this
reduction in operating expenses by reducing water production volumes and
lowering our flowing gas temperatures. The repair and maintenance costs have
been reduced by reallocating work schedules through company personnel and
reducing third party services. Our operations control room in our Dallas
headquarters plays a significant role in our well surveillance process. We have
reduced our overall production downtime to approximately 4% through better
coordination and scheduling of all aspects of our field activities. From this
control room, we have the ability to continuously monitor and remotely control
natural gas flow 24 hours per day, 365 days per year. 

Cotton Valley, Hosston, Travis Peak, Pettet

Our conventional Cotton Valley, Hosston, Travis Peak and Pettet assets were
contributed to the partnership with HGI on February 14, 2013. The Vernon Field
in Jackson Parish, Louisiana is the most significant producing field in this
group of assets as its production averaged approximately 48 Mmcf per day of net
natural gas volumes from the lower Cotton Valley and Bossier Sand formations at
depths ranging from 12,000 to 15,000 feet for the month of December 2012. With
current low commodity prices, the primary focus in the Vernon Field is to
minimize our operating expense while maintaining production. We have
successfully mitigated the production decline rate in the field over the last
two years. We have additional acreage and production in Caddo and DeSoto
Parishes, Louisiana, primarily in four fields-Holly, Kingston, Caspiana and
Longwood. We also have acreage and production in Harrison, Panola, and Gregg
Counties in Texas, primarily across three fields-Carthage, Waskom, and Danville.
Production from these areas is primarily from Cotton Valley sands at depths
ranging from 10,400 to 11,000 feet and the Travis Peak and Hosston Sands at
7,800 to 10,000 feet. Due to low commodity prices, we are not actively drilling
in these formations. Capital spending will be focused on maintaining a strong
emphasis on base production performance. We typically run multiple service rigs
replacing tubing, changing pumps, cleaning out fill and implementing general
repairs to maintain optimum production levels. The partnership with HGI
currently has 915 wells flowing to sales with a total gross operated production
rate of approximately 124.1 Mmcfe per day (67.0 Mmcfe per day net). During the
first quarter 2013, the partnership expects to close on the acquisition from BG
Group of their shallow interests in the East Texas/North Louisiana JV area. 

Marcellus Shale

Our gross Marcellus shale production as of December 31, 2012, was approximately
157 Mmcf per day (43.2 Mmcf per day net), which represents an increase of more
than 73% since the end of 2011. As of December 31, 2012, we had more than 19.7
Mmcf per day (4.0 Mmcf per day net) of production shut in due primarily to
offset drilling and completion activities. During 2012, we drilled and completed
38 gross (11.4 net) wells in our Marcellus area. We implemented a development
program in Northeast Pennsylvania and an appraisal program in Central
Pennsylvania. In West Lycoming and Central Pennsylvania, several of our most
recent completions have averaged initial production rates in excess of 7.0 Mmcf
per day, representing some of our best well performance to date. Most of our
drilling activity during 2013 will be in Lycoming County, Pennsylvania where we
are realizing some of our highest returns in the Marcellus shale. We are
currently drilling with one operated rig due to low natural gas prices. During
2012, we realized significant cost reductions across operational functions with
drilling costs down 46%, completion costs down 11% and operating costs down 39%.
When natural gas prices recover, we plan to actively implement development
drilling. 

During the fourth quarter 2012, we spud 4 new operated wells and drilled and
completed 13 gross (3.3 net) operated wells in the Marcellus shale. These 13
completed wells were all in Northeast Pennsylvania. During 2012, we also focused
on building our field infrastructure, particularly water handling lines, storage
and disposal facilities, in support of our expected future levels of activity. 

Permian

We drilled and completed 10 gross (9.8 net) wells in our Sugg Ranch area during
the fourth quarter 2012 with 90% drilling success. For the year, we drilled and
completed 37 gross (36.1 net) wells with 95% drilling success. Economics for
this drilling activity typically have rates-of-return in excess of 50%. In the
fourth quarter, our production averaged approximately 3,900 barrels per day of
net oil equivalents. This average production rate consisted of 1,450 net barrels
of oil, 6,400 net Mcf of natural gas, and 1,340 net barrels of natural gas
liquids per day. The shallow Permian assets were contributed to the partnership
with HGI. The partnership expects to run one operated rig and drill and complete
36 gross (34.9 net) wells at Sugg Ranch in 2013. 

Based on industry results surrounding our Permian acreage position, we are
continuing to evaluate our shale potential. We have tested both the Wolfcamp and
Cline shale formations vertically in several wells and continue to collect and
analyze core samples. The Wolfcamp and Cline shale rights were not contributed
to the partnership with HGI. 

TGGT

Our jointly held midstream company, TGGT, had total throughput which averaged
approximately 1.4 Bcf per day during the fourth quarter of 2012 and averaged
approximately 1.5 Bcf per day for full year 2012. TGGT's adjusted EBITDA was $38
million for the fourth quarter of 2012 and $158 million for full year 2012, a
41% increase over adjusted EBITDA of $112 million for full year 2011. 

TGGT's capital spending for the fourth quarter of 2012 was $18 million, while
the full year 2012 spending totaled $126 million. TGGT expects its capital
budget for 2013 will be approximately $40 million, which is primarily associated
with field infrastructure pipelines to support drilling activity in North
Louisiana and East Texas. The substantial reduction in capital expenditures in
2013 compared to 2012 reflects the completion of all major facility projects
coupled with reduction in drilling activities. 

Proved Reserves

Our estimated proved reserves as of December 31, 2012, were 1.0 Tcfe with a
pre-tax PV-10 of $696 million calculated pursuant to SEC pricing rules. For
2012, the reference price was $2.76 per Mmbtu for natural gas and $94.71 per Bbl
for oil which resulted in an adjusted price of $2.54 per Mcf for natural gas and
$89.84 per Bbl for oil. For 2012, we began separately reporting NGL reserves.
The average price of NGL used in our Proved Reserves computation was $46.57 per
barrel and was computed using the average realized price for NGL during the
year. Using the average of the ten year futures strip price at December 31,
2012, as adjusted for energy content, quality and basis differentials, of $4.45
per Mcf for natural gas and $82.58 per Bbl of oil, our estimated Proved Reserves
would have been 1.6 Tcfe with a pre-tax PV-10 of $1.8 billion. 

During 2012, we added 102 Bcfe of Proved Reserves through the drill bit and
produced 190 Bcfe. The impact of price declines for natural gas during 2012
resulted in downward revisions to Proved Reserves of 467 Bcfe while performance
related revisions increased our Proved Reserves by 246 Bcfe. In addition, the
impact of low natural gas prices resulted in reclassification of Proved Reserves
to unproved reserves totaling 9 Bcfe as the projects did not meet the five year
drilling schedule required by SEC rules. Positive reserve revisions were taken
in our Haynesville shale and reflected upward adjustments to production curves
arising from more historical data to confirm type curves and lower drilling and
completion costs. The following table presents the details of our changes in
proved reserves:

                                                                                                                                                       
                                                                                                     Natural gas liquids       Equivalent natural      
                                                         Oil (Mbbls)       Natural gas (Mmcf)        (Mbbls)                   gas (Mmcfe)             
 Proved Developed Reserves                               4,371             917,326                   4,784                     972,256                 
 Proved Undeveloped Reserves                             1,199             18,806                    1,855                     37,130                  
 Total Proved Reserves                                   5,570             936,132                   6,639                     1,009,386               
                                                                                                                                                       
 The changes in reserves for the year are as follows:                                                                                                  
 January 1, 2012                                         6,354             1,291,464                 -                         1,329,588               
 Purchase of reserves in place                           -                 -                         -                         -                       
 Discoveries and extensions                              492               96,615                    424                       102,111                 
 Revisions of previous estimates:                                                                                                                      
 Reclassification to unproved reserves (1)               (437    )         (6,114      )             -                         (8,736      )           
 Changes in price                                        (110    )         (466,238    )             -                         (466,898    )           
 Other factors                                           (26     )         205,898                   6,724                     246,086                 
 Sales of reserves in place                              -                 (2,837      )             -                         (2,837      )           
 Production                                              (703    )         (182,656    )             (509        )             (189,928    )           
 December 31, 2012                                       5,570             936,132                   6,639                     1,009,386               


(1) Represents Proved Undeveloped Reserves reclassified to unproved pursuant to
the five year development rule established by the SEC. This reclassification was
a result of decisions not to commit development capital in the current commodity
price environment. While these locations qualify as Proved Undeveloped Reserves
as they directly offset a proved location, our planned capital programs do not
support development at this time, resulting in the reclassification. 

Most of our proved reserves in the Haynesville/Bossier shales are booked in our
DeSoto Parish area. We believe that booking of proved reserves in the Shelby
Area and in the Marcellus shale will follow the history of the development of
DeSoto Parish. Over the last four years, we transitioned from exploration to
testing and delineation and, ultimately, to development in DeSoto Parish. As
such, we booked much of the area on a proved basis at year-end 2010. Our
drilling activities during 2012 in the Haynesville/Bossier shales were dominated
by drilling in the DeSoto Parish area, the vast majority of which resulted in
converting proved undeveloped reserves into proved developed reserves. During
2012, we completed a significant spacing test in the Shelby Area to fully
develop the Haynesville and Bossier shales across two units. EXCO and an offset
operator drilled 14 new horizontal wells during 2011. These wells were completed
and turned to sales in the first quarter 2012. We will continue to evaluate this
spacing pilot before proceeding with additional development as natural gas
prices improve. In Appalachia, our drilling activities in 2012 were focused on
establishing a development program in Northeast Pennsylvania and continuing to
appraise our Central Pennsylvania assets. 

We believe that an analysis of our total proved finding and development costs,
primarily for our shale operations, is most relevant on an inception to date
basis, defined as January 1, 2009 through December 31, 2012, as yearly
computations for development of proved undeveloped locations are subject to
significant volatility due to timing of booking Proved Reserves when pad
development operations are conducted. Our drilling and development spending
totaled $1.8 billion from 2009 to 2012 resulting in a finding and development
cost of $1.54 per Mcfe. Including revisions other than price, our inception to
date finding and development cost was $1.33 per Mcfe. Including $397 million of
proved property and leasehold acquisitions, our "all-in" finding and development
cost was $1.51 per Mcfe. Adjusting for the benefit of $537 million of BG Group
carries attributable to our joint ventures, our finding and development cost
would have been $1.87 per Mcfe. As of December 31, 2012, the carrying value of
our undeveloped leasehold costs associated with future proved reserve addition
potential was $392 million. These undeveloped locations, which represent
approximately 80,000 net undeveloped acres, are the result of several
significant acquisitions in the Haynesville/Bossier and Marcellus shale resource
plays in 2009 and 2010. The following table details the components of our
inception to date finding and development costs:

                                                                                               
                                            2009 through 2012                                  
 (dollars in thousands, except per Mcfe)    Cost                 Mmcfe           Per Mcfe      
 Haynesville (1)                            $    1,074,317       887,032         $      1.21   
 Marcellus (2)                                   85,867          78,367                 1.10   
 Total Shale                                     1,160,184       965,399                1.20   
 Conventional (3)                                267,944         101,147                2.65   
 Total development                               1,428,128       1,066,546              1.34   
 Exploratory (4)                                 408,678         124,386                3.29   
 Total development and exploration               1,836,806       1,190,932              1.54   
 Revisions - other than price                    -               187,996                -      
 Subtotal                                        1,836,806       1,378,928              1.33   
 Proved acquisitions                             176,810         100,601                1.76   
 Leasehold additions                             219,946         -                      -      
 Total                                      $    2,233,562       1,479,529       $      1.51   


(1) Adjusting for the cumulative benefit of $353 million of BG Group carry
associated with our Haynesville development drilling, our inception to date
finding and development cost would have been $1.61 per Mcfe.
(2) Adjusting for the benefit of $63 million of BG Group carry associated with
our Marcellus development drilling, our inception to date finding and
development cost would have been $1.91 per Mcfe.
(3) Primarily development of our Permian assets which have high oil and NGL
production.
(4) Adjusting for the cumulative benefit of $121 million of BG Group carries in
Haynesville and Marcellus exploratory drilling, our inception to date finding
and development cost would have been $4.26 per Mcfe. 

During 2012, we added 207 Bcfe to our proved developed reserves resulting in a
finding and development cost of $1.60 per Mcfe. Adjusting for the benefit of $49
million of BG Group carry associated with our proved developed reserve additions
in 2012, our finding and development cost would have been $1.84 per Mcfe. The
following table details the components of our 2012 proved developed additions:

                                                                                       
                                            2012                                       
 (dollars in thousands, except per Mcfe)    Cost             Mmcfe       Per Mcfe      
 Haynesville                                $    232,660     141,076     $      1.65   
 Marcellus                                       62,008      51,334             1.21   
 Total Shale                                     294,668     192,410            1.53   
 Conventional                                    34,345      12,861             2.67   
 Total development                               329,013     205,271            1.60   
 Exploratory                                     3,450       2,049              1.68   
 Total development and exploration (1)      $    332,463     207,320     $      1.60   


(1) Excludes $13 million of rig termination fees, $20 million of field
operations capital and $38 million of fourth quarter leasehold and development
costs which are not directly associated with future proved developed reserve
additions. 

Financial Data

Our consolidated balance sheets as of December 31, 2012 and December 31, 2011
and consolidated statements of operations for the three months and full year
ended December 31, 2012 and 2011, and consolidated statements of cash flows for
the year ended December 31, 2012 and 2011, are included on the following pages.
We have also included reconciliations of non-GAAP financial measures referred to
in this press release which have not been previously reconciled. 

EXCO will host a conference call on Thursday, February 21, 2013 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#90683761. 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, after market close, on EXCO`s
website on Wednesday, February 20, 2013. 

A digital recording will be available starting two hours after the completion of
the conference call until 11:59 p.m., March 7, 2013. Please call (800) 585-8367
and enter conference ID#90683761 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. 

We believe that it is important to communicate our expectations of future
performance to our investors.However, events may occur in the future that we are
unable to accurately predict, or over which we have no control.You are cautioned
not to place undue reliance on a forward-looking statement.When considering our
forward-looking statements, keep in mind the risk factors and other cautionary
statements in this press release and the risk factors included in our Annual
Report on Form 10-K for the year ended December 31, 2011, and after February 21,
2013, our Annual Report on Form 10-K for the year ended December 31, 2012, and
our other periodic filings with the SEC.

Our revenues, operating results, financial condition and ability to borrow funds
or obtain additional capital depend substantially on prevailing prices for oil
and natural gas.A decline in oil and/or natural gas prices could have a material
adverse effect on the estimated value and estimated quantities of our oil and
natural gas reserves, our ability to fund our operations and our financial
condition, cash flow, results of operations and access to capital.Historically,
oil and natural gas prices and markets have been volatile, with prices
fluctuating widely, and they are likely to continue to be volatile.

The SEC permits oil and natural gas companies in filings made with the SEC to
disclose 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. The SEC permits optional disclosure
of "probable" and "possible" reserves in its filings with the SEC. EXCO may use
broader terms to describe additional reserve opportunities such as "potential,"
"unproved," or "unbooked potential," to describe volumes of reserves potentially
recoverable through additional drilling or recovery techniques that the SEC`s
guidelines strictly prohibit us from including in filings with the SEC. These
estimates are by their nature more speculative than estimates of proved,
probable or possible reserves and accordingly are subject to substantially
greater risk of actually being realized by the company. While we believe our
calculations of unproved drillsites and estimation 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, 2011, and after February 21, 2013, our Annual Report
on Form 10-K for the year ended December 31, 2012, which is available on our
website at www.excoresources.com under the Investor Relations tab.

                                                                                                                                            
                                                                                                                                            
 EXCO Resources, Inc.                                                                                                                       
 Consolidated balance sheets                                                                                                                
                                                                                                                                            
                                                                                      December 31,                December 31,              
 (in thousands)                                                                       2012                        2011                      
                                                                                                                                            
 Assets                                                                                                                                     
 Current assets:                                                                                                                            
 Cash and cash equivalents                                                            $      45,644               $      31,997             
 Restricted cash                                                                             70,085                      155,925            
 Accounts receivable, net:                                                                                                                  
 Oil and natural gas                                                                         84,348                      88,518             
 Joint interest                                                                              69,446                      170,918            
 Other                                                                                       15,053                      28,488             
 Inventory                                                                                   5,705                       8,345              
 Derivative financial instruments                                                            49,500                      164,002            
 Other                                                                                       22,085                      29,815             
 Total current assets                                                                        361,866                     678,008            
 Equity investments                                                                          347,008                     302,833            
 Oil and natural gas properties (full cost accounting method):                                                                              
 Unproved oil and natural gas properties and development costs not being amortized           470,043                     667,342            
 Proved developed and undeveloped oil and natural gas properties                             2,715,767                   3,392,146          
 Accumulated depletion                                                                       (1,945,565  )               (1,657,165  )      
 Oil and natural gas properties, net                                                         1,240,245                   2,402,323          
 Gas gathering assets                                                                        130,830                     136,203            
 Accumulated depreciation and amortization                                                   (34,364     )               (29,104     )      
 Gas gathering assets, net                                                                   96,466                      107,099            
 Office, field and other equipment, net                                                      20,725                      42,384             
 Deferred financing costs, net                                                               22,584                      29,622             
 Derivative financial instruments                                                            16,554                      11,034             
 Goodwill                                                                                    218,256                     218,256            
 Other assets                                                                                28                          28                 
 Total assets                                                                         $      2,323,732            $      3,791,587          


                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                              
 EXCO Resources, Inc.                                                                                                                                                                                                                                                                         
 Consolidated balance sheets                                                                                                                                                                                                                                                                  
                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                                                                              
                                                                                                                                                                                                                                        December 31,                December 31,              
 (in thousands, except per share and share data)                                                                                                                                                                                        2012                        2011                      
                                                                                                                                                                                                                                                                                              
 Liabilities and shareholders` equity                                                                                                                                                                                                                                                         
 Current liabilities:                                                                                                                                                                                                                                                                         
 Accounts payable and accrued liabilities                                                                                                                                                                                               $      83,240               $      117,968            
 Revenues and royalties payable                                                                                                                                                                                                                134,066                     148,926            
 Accrued interest payable                                                                                                                                                                                                                      17,029                      17,973             
 Current portion of asset retirement obligations                                                                                                                                                                                               1,200                       732                
 Income taxes payable                                                                                                                                                                                                                          -                           -                  
 Derivative financial instruments                                                                                                                                                                                                              2,396                       1,800              
 Total current liabilities                                                                                                                                                                                                                     237,931                     287,399            
 Long-term debt                                                                                                                                                                                                                                1,848,972                   1,887,828          
 Deferred income taxes                                                                                                                                                                                                                         -                           -                  
 Derivative financial instruments                                                                                                                                                                                                              26,369                      -                  
 Asset retirement obligations and other long-term liabilities                                                                                                                                                                                  61,067                      58,028             
 Commitments and contingencies                                                                                                                                                                                                                 -                           -                  
 Shareholders` equity:                                                                                                                                                                                                                                                                        
 Preferred stock, $0.001 par value; 10,000,000 authorized shares; none issued and outstanding                                                                                                                                                  -                           -                  
 Common stock, $0.001 par value; 350,000,000 authorized shares; 218,126,071 shares issued and 217,586,850 shares outstanding at December 31, 2012; 217,245,504 shares issued and 216,706,283 shares outstanding at December 31, 2011           215                         215                
 Additional paid-in capital                                                                                                                                                                                                                    3,200,067                   3,181,063          
 Accumulated deficit                                                                                                                                                                                                                           (3,043,410  )               (1,615,467  )      
 Treasury stock, at cost; 539,221 shares at December 31, 2012 and December 31, 2011                                                                                                                                                            (7,479      )               (7,479      )      
 Total shareholders` equity                                                                                                                                                                                                                    149,393                     1,558,332          
 Total liabilities and shareholders` equity                                                                                                                                                                                             $      2,323,732            $      3,791,587          


                                                                                                                                                                                  
                                                                                                                                                                                  
 EXCO Resources, Inc.                                                                                                                                                             
 Consolidated statements of operations                                                                                                                                            
                                                                                                                                                                                  
                                                                     Three Months Ended December 31,                          Years Ended December 31,                            
 (in thousands, except per share data)                               2012                           2011                      2012                          2011                  
 Revenues:                                                                                                                                                                        
 Oil and natural gas                                                 $      152,162                 $      178,871            $     546,609                 $     754,201         
 Costs and expenses:                                                                                                                                                              
 Oil and natural gas operating costs                                        18,043                         23,923                   77,127                        84,766          
 Production and ad valorem taxes                                            6,812                          5,175                    27,483                        23,875          
 Gathering and transportation                                               24,692                         27,812                   102,875                       86,881          
 Depletion, depreciation and amortization                                   55,648                         109,123                  303,156                       362,956         
 Write-down of oil and natural gas properties                               324,040                        233,239                  1,346,749                     233,239         
 Accretion of discount on asset retirement obligations                      991                            924                      3,887                         3,652           
 General and administrative                                                 21,624                         28,183                   83,818                        104,618         
 (Gain) loss on divestitures and other operating items                      7,683                          (1,352    )              17,029                        23,819          
 Total costs and expenses                                                   459,533                        427,027                  1,962,124                     923,806         
 Operating income (loss)                                                    (307,371  )                    (248,156  )              (1,415,515  )                 (169,605  )     
 Other income (expense):                                                                                                                                                          
 Interest expense                                                           (18,424   )                    (17,438   )              (73,492     )                 (61,023   )     
 Gain on derivative financial instruments                                   47,787                         88,752                   66,133                        219,730         
 Other income                                                               380                            233                      969                           788             
 Equity income                                                              8,599                          9,957                    28,620                        32,706          
 Total other income (expense)                                               38,342                         81,504                   22,230                        192,201         
 Income (loss) before income taxes                                          (269,029  )                    (166,652  )              (1,393,285  )                 22,596          
 Income tax expense                                                         -                              -                        -                             -               
 Net income (loss)                                                   $      (269,029  )             $      (166,652  )        $     (1,393,285  )           $     22,596          
 Earnings (loss) per common share:                                                                                                                                                
 Basic:                                                                                                                                                                           
 Net income (loss)                                                   $      (1.25     )             $      (0.78     )        $     (6.50       )           $     0.11            
 Weighted average common shares outstanding                                 214,672                        214,137                  214,321                       213,908         
 Diluted:                                                                                                                                                                         
 Net income (loss)                                                   $      (1.25     )             $      (0.78     )        $     (6.50       )           $     0.10            
 Weighted average common and common equivalent shares outstanding           214,672                        214,137                  214,321                       216,705         


                                                                                                                                                      
                                                                                                                                                      
 EXCO Resources, Inc.                                                                                                                                 
 Consolidated statements of cash flows                                                                                                                
                                                                                                                                                      
                                                                                                  Years Ended December 31,                            
 (in thousands)                                                                                   2012                          2011                  
 Operating Activities:                                                                                                                                
 Net income (loss)                                                                                $     (1,393,285  )           $     22,596          
 Adjustments to reconcile net income (loss) to net cash provided by operating activities:                                                             
 Depreciation, depletion and amortization                                                               303,156                       362,956         
 Share-based compensation expense                                                                       8,926                         11,012          
 Accretion of discount on asset retirement obligations                                                  3,887                         3,652           
 Write-down of oil and natural gas properties and other impairment losses on long-lived assets          1,346,749                     240,039         
 Income from equity investments                                                                         (28,620     )                 (32,706   )     
 Non-cash change in fair value of derivatives                                                           135,945                       (84,313   )     
 Deferred income taxes                                                                                  -                             -               
 Amortization of deferred financing costs and discount on the 2018 Notes                                9,788                         9,759           
 (Gain) loss on divestitures and sale of other assets                                                   1,303                         (479      )     
 Effect of changes in:                                                                                                                                
 Accounts receivable                                                                                    112,919                       (79,359   )     
 Other current assets                                                                                   7,090                         (5,961    )     
 Accounts payable and other current liabilities                                                         6,928                         (18,653   )     
 Net cash provided by operating activities                                                              514,786                       428,543         
 Investing Activities:                                                                                                                                
 Additions to oil and natural gas properties, gathering systems and equipment                           (534,175    )                 (984,085  )     
 Property acquisitions                                                                                  (2,748      )                 (753,286  )     
 Equity method investments                                                                              (14,907     )                 (13,829   )     
 Proceeds from disposition of property and equipment                                                    38,045                        449,683         
 Restricted cash                                                                                        85,840                        5,792           
 Net changes in advances (to) from Appalachia JV                                                        851                           (1,707    )     
 Distributions from equity method investments                                                           -                             125,000         
 Deposit on acquisitions                                                                                -                             464,151         
 Other                                                                                                  -                             (1,250    )     
 Net cash used in investing activities                                                                  (427,094    )                 (709,531  )     
 Financing Activities:                                                                                                                                
 Borrowings under the EXCO Resources Credit Agreement                                                   53,000                        706,000         
 Repayments under the EXCO Resources Credit Agreement                                                   (93,000     )                 (407,500  )     
 Proceeds from issuance of common stock                                                                 1,968                         12,063          
 Payment of common stock dividends                                                                      (34,358     )                 (34,238   )     
 Deferred financing costs and other                                                                     (1,655      )                 (7,569    )     
 Net cash provided by (used in) financing activities                                                    (74,045     )                 268,756         
 Net increase (decrease) in cash                                                                        13,647                        (12,232   )     
 Cash at beginning of period                                                                            31,997                        44,229          
 Cash at end of period                                                                            $     45,644                  $     31,997          
                                                                                                                                                      
 Supplemental Cash Flow Information:                                                                                                                  
 Cash interest payments                                                                           $     86,298                  $     78,125          
 Income tax payments                                                                              $     -                       $     1,458           
 Supplemental non-cash investing and financing activities:                                                                                            
 Capitalized share-based compensation                                                             $     7,513                   $     6,406           
 Capitalized interest                                                                             $     23,809                  $     30,083          
 Issuance of common stock for director services                                                   $     597                     $     70              
 Accrued restricted stock dividends                                                               $     300                     $     129             


                                                                                                                                                                     
                                                                                                                                                                     
 EXCO Resources, Inc.                                                                                                                                                
 Consolidated EBITDA                                                                                                                                                 
 And Adjusted EBITDA reconciliations and statement of cash flow data                                                                                                 
 (Unaudited)                                                                                                                                                         
                                                                                                                                                                     
                                                                            Three Months Ended                             Years Ended                               
                                                                            December 31,                                   December 31,                              
 (in thousands)                                                             2012                     2011                  2012                    2011              
 Net income (loss)                                                          $    (269,029  )         $    (166,652  )      $   (1,393,285  )       $   22,596        
 Interest expense                                                                18,424                   17,438               73,492                  61,023        
 Income tax expense                                                              -                        -                    -                       -             
 Depreciation, depletion and amortization                                        55,648                   109,123              303,156                 362,956       
 EBITDA(1)                                                                       (194,957  )              (40,091   )          (1,016,637  )           446,575       
 Accretion of discount on asset retirement obligations                           991                      924                  3,887                   3,652         
 Non-cash write down of oil and natural gas properties                           324,040                  233,239              1,346,749               233,239       
 Non-recurring other operating items                                             8,200                    118                  17,928                  27,660        
 Equity income                                                                   (8,599    )              (9,957    )          (28,620     )           (32,706   )   
 Non-cash change in fair value of derivative financial instruments               (8,394    )              (36,425   )          135,945                 (84,313   )   
 Share based compensation expense                                                854                      3,475                8,926                   11,012        
 Adjusted EBITDA (1)                                                        $    122,135             $    151,283          $   468,178             $   605,119       
 Interest expense                                                                (18,424   )              (17,438   )          (73,492     )           (61,023   )   
 Income tax expense                                                              -                        -                    -                       -             
 Amortization of deferred financing costs and discount on the 2018 Notes         1,677                    3,441                9,788                   9,759         
 Non-recurring other operating items                                             (8,000    )              474                  (16,625     )           (21,339   )   
 Changes in working capital                                                      2,621                    (64,551   )          126,937                 (103,973  )   
 Net cash provided by operating activities                                  $    100,009             $    73,209           $   514,786             $   428,543       
                                                                                                                                                                     
                                                                            Three Months Ended                             Years Ended                               
                                                                            December 31,                                   December 31,                              
 (in thousands)                                                             2012                     2011                  2012                    2011              
 Statement of cash flow data (unaudited):                                                                                                                            
 Cash flow provided by (used in):                                                                                                                                    
 Operating activities                                                       $    100,009             $    73,209           $   514,786             $   428,543       
 Investing activities                                                            (119,841  )              (263,129  )          (427,094    )           (709,531  )   
 Financing activities                                                            (8,077    )              165,499              (74,045     )           268,756       
 Other financial and operating data:                                                                                                                                 
 EBITDA(1)                                                                       (194,957  )              (40,091   )          (1,016,637  )           446,575       
 Adjusted EBITDA(1)                                                              122,135                  151,283              468,178                 605,119       


(1) Earnings before interest, taxes, depreciation, depletion and amortization,
or "EBITDA" represents net income adjusted to exclude interest expense, income
taxes and depreciation, depletion and amortization. "Adjusted EBITDA" represents
EBITDA adjusted to exclude non-recurring other operating items, accretion of
discount on asset retirement obligations, non-cash changes in the fair value of
derivatives, non-cash write-downs of assets, stock-based compensation and income
or losses from equity method investments. We have presented EBITDA and Adjusted
EBITDA because they are a widely used measure by investors, analysts and rating
agencies for valuations, peer comparisons and investment recommendations. In
addition, these measures are used in covenant calculations required under our
credit agreement and the indenture governing our 7.5% senior notes due September
15, 2018. Compliance with the liquidity and debt incurrence covenants included
in these agreements is considered material to us. Our computations of EBITDA and
Adjusted EBITDA may differ from computations of similarly titled measures of
other companies due to differences in the inclusion or exclusion of items in our
computations as compared to those of others. EBITDA and Adjusted EBITDA are
measures that are not prescribed by generally accepted accounting principles, or
GAAP. EBITDA and Adjusted EBITDA specifically exclude changes in working
capital, capital expenditures and other items that are set forth on a cash flow
statement presentation of a company`s operating, investing and financing
activities. As such, we encourage investors not to use these measures as
substitutes for the determination of net income, net cash provided by operating
activities or other similar GAAP measures.

                                                                                                                                                                        
                                                                                                                                                                        
 TGGT Holdings, LLC                                                                                                                                                     
 EBITDA and Adjusted EBITDA reconciliation                                                                                                                              
 (Unaudited)                                                                                                                                                            
                                                                                                                                                                        
                                                                                       Three Months Ended                         Years Ended                           
                                                                                       December 31,                               December 31,                          
 (in thousands)                                                                        2012                   2011                2012                 2011             
                                                                                                                                                                        
 Equity income (loss)                                                                  $    8,599             $    9,957          $   28,620           $   32,706       
 Amortization of the difference in the historical basis of our contribution to TGGT         (399    )              (399    )          (1,605   )           (1,605   )   
 Equity (gain) loss of other investments                                                    (980    )              457                305                  513          
 EXCO's share of TGGT net income                                                            7,220                  10,015             27,320               31,614       
 BG Group's share of TGGT net income                                                        7,220                  10,015             27,320               31,614       
 TGGT net income                                                                            14,440                 20,030             54,640               63,228       
 Interest expense                                                                           4,295                  2,607              16,208               8,776        
 Margin tax expense                                                                         126                    (482    )          426                  636          
 Depreciation and amortization                                                              8,342                  6,452              32,132               25,453       
 TGGT EBITDA(1)                                                                             27,203                 28,607             103,406              98,093       
 Asset impairments and non-recurring other operating items                                  10,810                 674                54,175               13,967       
 TGGT Adjusted EBITDA(1)                                                               $    38,013            $    29,281         $   157,581          $   112,060      
 EXCO's share of TGGT Adjusted EBITDA (2)                                              $    19,007            $    14,641         $   78,791           $   56,030       


(1) Earnings before interest, taxes, depreciation, depletion and amortization,
or "EBITDA" represents net income adjusted to exclude interest expense, income
taxes and depreciation and amortization. "Adjusted EBITDA" represents EBITDA
adjusted to exclude asset impairments, gains and losses on divestitures and
non-recurring other operating items. We have presented EBITDA and Adjusted
EBITDA because they are a widely used measure by investors, analysts and rating
agencies for valuations, peer comparisons and investment recommendations. Our
computations of EBITDA and Adjusted EBITDA may differ from computations of
similarly titled measures of other companies due to differences in the inclusion
or exclusion of items in our computations as compared to those of others. EBITDA
and Adjusted EBITDA are measures that are not prescribed by generally accepted
accounting principles, or GAAP. EBITDA and Adjusted EBITDA specifically exclude
changes in working capital, capital expenditures and other items that are set
forth on a cash flow statement presentation of a company`s operating, investing
and financing activities. As such, we encourage investors not to use these
measures as substitutes for the determination of net income, net cash provided
by operating activities or other similar GAAP measures.
(2) Represents our 50% equity share in TGGT.

                                                                                                                           
                                                                                                                           
 TGGT Holdings, LLC                                                                                                        
 Computation of adjusted net income                                                                                        
 (Unaudited)                                                                                                               
                                                                                                                           
                                                       Three Months Ended                  Years Ended                     
                                                       December 31,                        December 31,                    
 (in thousands)                                        2012                2011            2012               2011         
 Net income, GAAP                                      $     14,440        $     20,030    $    54,640        $    63,228  
 Adjustments:                                                                                                              
 Loss on asset disposal                                      -                   164            1,640              1,579   
 Asset impairment, net of insurance recoveries               10,810              510            50,771             9,688   
 Other non-cash items                                        -                   -              1,764              2,700   
 Total adjustments                                           10,810              674            54,175             13,967  
 Adjusted net income                                   $     25,250        $     20,704    $    108,815       $    77,195  
                                                                                                                           
 EXCO's 50% share of TGGT's adjusted net income (1)    $     12,625        $     10,352    $    54,408        $    38,598  


(1) TGGT`s net income, computed in accordance with GAAP, includes certain items
not typically included by securities analysts in published estimates of
financial results. This table provides a reconciliation of GAAP net income to a
non-GAAP measure of adjusted net income.

                                                                                                                                                                                        
                                                                                                                                                                                        
 EXCO Resources, Inc.                                                                                                                                                                   
 Summary of operating data                                                                                                                                                              
                                                                                                                                                                                        
                                                                                       Three Months Ended                                Years Ended                                    
                                                                                       December 31,                        %             December 31,                       %           
                                                                                       2012                2011            Change        2012               2011            Change      
 Production:                                                                                                                                                                            
 Oil (Mbbls)                                                                                 160                 188       (15   )%           704                741        (5    )%    
 Natural gas liquids (Mbbls)                                                                 128                 126       2     %            510                505        1     %     
 Natural gas (Mmcf)                                                                          42,160              49,305    (14   )%           182,644            176,700    3     %     
 Total production (Mmcfe) (1)                                                                43,888              51,189    (14   )%           189,928            184,176    3     %     
 Average daily production (Mmcfe)                                                            477                 556       (14   )%           519                505        3     %     
 Average sales price (before cash settlements of derivative financial instruments):                                                                                                     
 Oil (per Bbl)                                                                         $     81.13         $     89.48     (9    )%      $    88.24         $    91.01      (3    )%    
 Natural gas liquids (per Bbl)                                                               41.96               60.96     (31   )%           43.27              58.69      (26   )%    
 Natural gas (per Mcf)                                                                       3.17                3.13      1     %            2.53               3.72       (32   )%    
 Natural gas equivalent (per Mcfe)                                                           3.47                3.49      (1    )%           2.88               4.10       (30   )%    
 Costs and expenses (per Mcfe):                                                                                                                                                         
 Oil and natural gas operating costs                                                   $     0.41          $     0.47      (13   )%      $    0.41          $    0.46       (11   )%    
 Production and ad valorem taxes                                                             0.16                0.10      60    %            0.14               0.13       8     %     
 Gathering and transportation                                                                0.56                0.54      4     %            0.54               0.47       15    %     
 Depletion                                                                                   1.19                2.05      (42   )%           1.52               1.87       (19   )%    
 Depreciation and amortization                                                               0.08                0.08      -                  0.08               0.10       (20   )%    
 General and administrative                                                                  0.49                0.55      (11   )%           0.44               0.57       (23   )%    


(1) Effective with the second quarter 2012, we began reporting NGL volumes
separately and have recast prior period volumes to conform to current period
reporting.

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

Copyright Business Wire 2013

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