EXCO Resources files for Chapter 11, plans to market assets

New York, Jan. 16 – EXCO Resources, Inc. made a Chapter 11 filing on Monday in the U.S. Bankruptcy Court for the Southern District of Texas, according to a news release.

The company said that it is continuing discussions with its creditors about the terms of a financial restructuring plan.

As part of that process, EXCO will explore strategic alternatives including marketing its assets, possibly resulting in the sale of some or all of the assets.

“Like many other companies in our industry, EXCO’s financial position has been negatively impacted by the sustained downturn in commodity prices and uncertainty in the energy market,” said Harold L. Hickey, EXCO’s chief executive officer and president, in the news release.

“Despite having taken actions to mitigate the impact of these factors, including renegotiating certain commercial contracts, reducing costs, restructuring our balance sheet and divesting assets, we continue to face increasing liquidity pressures as we navigate the competitive environment.”

EXCO has received a commitment for a $250 million debtor-in-possessing facility from some of its existing lenders including Fairfax Financial Holdings Ltd., Bluescape Resources Co. LLC and affiliates including Cove Key Management and JPMorgan Chase Bank, NA.

Proceeds from the DIP facility will be used to refinance the company’s existing reserve-based credit agreement and to support its operations.

PJT Partners LP is financial adviser and Alvarez & Marsal North America, LLC is restructuring adviser. Kirkland & Ellis LLP is legal adviser.

The company listed assets of $829,095,000 and debts of $1,355,377,000 in its Chapter 11 filing.

Wilmington Savings Fund Society FSB as trustee for the company’s 7½% senior notes due 2018 is the largest unsecured creditor with a claim of $131,576,000 and is also second largest with a claim of $70,169,000 in its role as trustee for the company’s 8½% senior notes due 2022. Azure ETG LLC is the third largest unsecured creditor with a claim for trade debt of $28,698,314, BHP Billiton Petroleum Properties LP is fourth with trade debt of $10,001,897, FTS International Services LLC is fifth with trade debt of $7,631,198, Goodrich Petroleum Co. LLC is sixth with trade debt of $4,586,270, Louisiana Midstream Gas Services LLC is seventh with trade debt of $4,035,577, BP America Production Co. is eighth with trade debt of $2,555,702, Chesapeake Energy Marketing LLC is ninth with trade debt of $2,455,392 and Indigo Minerals LLC is 10th with a trade claim of $2,204,413.

It said Energy Strategic Advisory Services LLC owns 29.56% of its equity, Fairfax Financial Holdings Ltd. 16.1%, WL Ross & Co. LLC 12.5% and Oaktree Capital Management Funds 8.29%.

The Chapter 11 case number is 18-30155.

In December the company failed to make the interest payment on its 1.75 lien term loans, entered into a forbearance agreement with some of its bank debt lenders and noteholders and obtained a commitment for DIP financing and later missed a payment on its second-lien term loan.

EXCO is a Dallas-based oil and gas exploration and production company operating in Texas, North Louisiana and Appalachia.

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