EXCO Resources, Inc. Announces Acquisition of Marcellus Shale Properties from Chief Oil & Gas

EXCO Resources, Inc. today announced the acquisition of properties prospective for the Marcellus shale from Chief Oil & Gas LLC and related parties (“Chief”) for approximately $459.4 million, after preliminary purchase price adjustments at the closing. The parties agreed to close the transaction into an escrow account pending receipt of a waiver from a third party, which is expected to be obtained by January 14, 2011. The transaction has an effective date of July 1, 2010.
The assets are located within the area of mutual interest established by the existing Appalachian joint venture with BG Group, plc (LSE: BG.L) (“BG Group”). BG Group has the right to purchase 50% of this acquisition. Assuming BG Group elects to participate, the development of these assets would be governed by our Appalachian joint venture. The purchase price was financed with borrowings under EXCO’s credit agreement.
The assets include producing properties with current gross production of approximately 40 Mmcf per day (16 Mmcf per day net) from 15 producing wells, 11 wells currently awaiting completion and over 50,000 net acres prospective for the Marcellus shale located primarily in Lycoming and Sullivan Counties in Northeastern Pennsylvania.
Source: Press release