EXCO Resources Inc., Dallas, has filed petitions for a court-supervised reorganization under Chapter 11 of the US Bankruptcy Code in the Southern District of Texas and is in discussions with its creditors regarding the terms of a financial restructuring plan. The company will explore alternatives, including a sale of assets under Section 363 of the bankruptcy code.
In its quarterly report dated Nov. 7, 2017, EXCO said its liquidity was “significantly constrained.” As of Sept. 30, 2017, the company’s liquidity was $105.8 million and the principal amount of its outstanding debt was $1.4 billion.
Despite having taken actions to mitigate the impact of a sustained downturn in commodity prices and uncertainty in the energy market, said EXCO chief executive officer Harold L. Hickey, “we continue to face increasing liquidity pressures as we navigate the competitive environment.”
One such action was the April 2017 agreement to sell Eagle Ford assets to privately held Venado Oil & Gas LLC, Austin, for $300 million (OGJ Online, Apr. 11, 2017).
With court approval, EXCO intends to use $250 million in debtor-in-possession financing from existing lenders including Fairfax Financial Holdings Ltd. and its affiliates; Bluescape Resources Co. LLC and its affiliates, including Cove Key Management; and JPMorgan Chase Bank NA, and certain of its affiliates, to refinance its existing Reserve-Based Credit Agreement and support day-to-day operations.
EXCO Resources has principal operations in Texas, North Louisiana, and the Appalachia region.