Full Description

EXCO Resources, Inc. (EXCO), incorporated in October 1955, is an independent oil and natural gas company engaged in the acquisition, development and exploitation of onshore North American oil and natural gas properties. The Company’s operations are focused in key North American oil and natural gas areas, including East Texas/North Louisiana, Appalachia, Mid-Continent and Permian. As of December 31, 2008, EXCO’s proved reserves were approximately 1.9 trillion cubic feet equivalents (Tcfe), of which 93.6% were natural gas and 74.4% were proved developed reserves. During the year ended December 31, 2007, EXCO produced 144.6 billions of cubic feet equivalent (Bcfe) of oil and natural gas. On February 20, 2008, the Company acquired shallow natural gas properties from EOG Resources, Inc. On March 11, 2008, the Company acquired a 230 mile gathering system in East Texas/North Louisiana. On July 15, 2008, the Company acquired producing oil and natural gas properties, acreage and other assets in Gregg, Rusk and Upshur counties of Texas.

East Texas/North Louisiana

The East Texas area is a part of the Cotton Valley Sand trend, which covers parts of the East Texas Basin and the Northern Louisiana Salt Basin. In the Haynesville/Bossier shale resource play in the East Texas and Northwest Louisiana area, the Company holds approximately 92,000 net leasehold acres. In 2008, the Company drilled nine operated vertical wells and three operated horizontal wells. The Vernon Field, located in Jackson Parish, Louisiana, is its producing field, accounting for approximately one-fourth of its production. At December 31, 2008, the Company had proved reserves of 444.4 Bcfe and 403 gross producing wells. Most of the wells in the field produce from the Lower Cotton Valley and Bossier formations at approximately 12,000 to 15,000 feet.

Within its Cotton Valley Area, EXCO is active in Harrison, Panola, Smith, Rusk, Upshur and Gregg Counties in Texas primarily across six fields: Waskom, Overton, Oak Hill, Minden, Glenwood and White Oak. The Company is also active in Caddo Parish and DeSoto Parish in Louisiana primarily across four fields: Holly, Kingston, Caspiana and Longwood. At December 31, 2008, EXCO had proved reserves of 546.3 Bcfe and 1,408 gross producing wells. EXCO’s natural gas is gathered through its own gathering lines in these fields.

Appalachia

The Appalachian Basin includes portions of the states of Kentucky, Ohio, Pennsylvania, Virginia, West Virginia and Tennessee, and covers an area of over 185,000 square miles. The Company’s total acreage in the Marcellus Shale Resource Play is 395,000 acres. The Northwestern Pennsylvania Area encompasses 21 counties in the state. At December 31, 2008, EXCO had proved reserves of 266.9 Bcfe and 4,563 gross producing wells. The Eastern Ohio Area includes 25 countries in eastern Ohio. At December 31, 2008, EXCO had proved reserves of 85.4 Bcfe and 2,361 gross producing wells. The West Virginia Area includes 29 counties stretching from the northern to the southern areas of the state. At December 31, 2008, the Company had proved reserves of 147.2 Bcfe and 2,287 gross producing wells.

Mid-Continent

EXCO’s Mid-Continent area includes parts of Oklahoma, southwestern Kansas and the Texas Panhandle. The major properties in the Mid-Continent area are located in the Anadarko Shelf and Anadarko Basin of Oklahoma. The Mid-Continent area is characterized by stratigraphic plays with multiple, stacked pay zones and complex geology than in its other operating areas.

EXCO’s Mocane-Laverne Field is located in Beaver, Harper and Ellis counties of Oklahoma. At December 31, 2008, the Company had proved reserves of 99.7 Bcfe and 727 gross producing wells. The Company’s primary drilling targets include the Morrow, Chester and Cherokee formations.

The Golden Trend Area is primarily located in Grady, Garvin and McClain Counties of Oklahoma. At December 31, 2008, EXCO had estimated proved reserves of 151.5 Bcfe and it had 549 gross producing wells. Primary drilling targets include Sycamore, Hunton, Viola, Woodford, Simpson and Pennsylvanian formations.

Permian

The Permian Basin is located in West Texas and the adjoining area of southeastern New Mexico. The Sugg Ranch Field is located primarily in Irion County, Texas. The Company has a total working interest of 97% in the property. At December 31, 2008, the Company had proved reserves of 76.7 Bcfe and 269 gross producing wells.

Rockies

The Rockies Area is located in Wyoming, Montana and Colorado. The Rockies Area holdings consist of approximately 140,000 net acres of leasehold in Wyoming, primarily in the Wind River, Bighorn and Powder River Basins. At December 31, 2008, EXCO had proved reserves of 7.2 Bcfe and 66 gross producing wells.