EXCO Resources, Inc. Announces Acquisition of Natural Gas Properties in East Texas

2008-07-15 11:16:00

DALLAS–(EMWNews)–EXCO Resources, Inc. (NYSE:XCO) today announced it has closed an

acquisition of producing oil and natural gas properties, acreage and

other assets in Gregg, Rusk, and Upshur Counties, Texas for

approximately $252 million from private sellers, subject to customary

post-closing purchase price adjustments. EXCOs

average working interest in the properties is approximately 94% with an

average net revenue interest of 72%. EXCOs

estimate of net proved reserves acquired is 109 Bcfe and estimated total

net reserves (proved, probable and possible) exceed 370 Bcfe exclusive

of Bossier/Haynesville shale potential, discussed below, all based on

NYMEX strip pricing at the contract effective date of March 1, 2008.

The assets include producing properties with more than 15 Mmcfe per day

of net production from 83 producing wells and approximately 11,000 gross

acres. Also included in the assets is a 50 mile gathering system with

compressors, a dehydration unit and a refrigeration plant. EXCO

estimates that there are more than 500 additional drilling locations in

the Cotton Valley and Travis Peak formations, of which 92 are proved.

EXCO will operate the field and estimates a capital budget of $20

million to drill 9 wells during the remainder of 2008. The current

primary productive formations in the field are the Upper Cotton Valley,

Pettet and Travis Peak. A majority of the acquired leasehold covers

rights to all depths, including the Bossier/Haynesville shale. In prior

years, two vertical wells were drilled into the Bossier/Haynesville

shale on this acreage and logged pay potential in these horizons. Recent

industry activity in the vicinity of the acquired acreage has confirmed

the presence of shale potential. EXCO plans to drill at least one

vertical well in 2008 to further delineate potential of the

Bossier/Haynesville, and EXCO estimates that there could be more than

100 potential shale locations across the acquired acreage.

The acquisition of these properties will be financed with a $300 million

Senior Unsecured Term Loan due December 15, 2008, at our unrestricted

subsidiary, EXCO Operating Company, LP, formerly known as EXCO Partners

Operating Partnership, LP.

EXCO Resources, Inc. is a public oil and natural gas acquisition,

exploitation, development and production company headquartered in

Dallas, Texas with principal operations in Texas, Louisiana, Oklahoma,

Ohio, Pennsylvania, and West Virginia.

Additional information about EXCO Resources, Inc. may be obtained by

contacting EXCOs Chairman, Douglas H. Miller,

or its President, Stephen F. Smith, at EXCOs

headquarters, 12377 Merit Drive, Suite 1700, Dallas, TX 75251, telephone

number (214) 368-2084, or by visiting our website at www.excoresources.com.

Our SEC filings and press releases can be found under the Investor

Relations tab.

This release may contain forward-looking statements relating to

future financial results or business expectations. Business plans

may change as circumstances warrant. Actual results may differ

materially from those predicted as a result of factors over which EXCO

has no control. Such factors include, but are not limited to: acquisitions,

recruiting and new business solicitation efforts, estimates of reserves,

commodity price changes, the extent to which EXCO is successful in

integrating recently acquired businesses, regulatory changes and general

economic conditions. These risk factors and additional

information are included in EXCOs reports on

file with the Securities and Exchange Commission.

The SEC has generally permitted oil and natural gas companies, in

filings made with the SEC, to disclose only proved reserves that a

company has demonstrated by actual production or conclusive formation

tests to be economically and legally producible under existing economic

and operating conditions. We use the terms probable,

possible, or unproved

to describe volumes of reserves potentially recoverable through

additional drilling or recovery techniques that the SECs

guidelines prohibit us from including in filings with the SEC. These

estimates are by their nature more speculative than estimates of proved

reserves and accordingly are subject to substantially greater risk of

being actually realized by the company. While we believe our

calculation of unproved drillsites and estimations of unproved reserves

have been appropriately risked and are reasonable, such calculations and

estimates have not been reviewed by third party engineers or appraisers.

Investors are urged to consider closely the disclosure in our Annual

Report on Form 10-K for the year ended December 31, 2007 available on

our website at www.excoresources.com

under the Investor Relations tab or by calling us at (214) 368-2084.

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

F. Smith, 214-368-2084
President
http://www.excoresources.com

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