EXCO RESOURCES, INC. (NYSE:XCO) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry into a Material Definitive Agreement.
On April7, 2017, EXCO Operating Company, LP, a Delaware limited
partnership (EOC), and EXCO Land Company, LLC, a Delaware
limited liability company (EXCO Land and together with
EOC, the Sellers), both wholly owned subsidiaries of EXCO
Resources Inc. (EXCO), entered into that certain Purchase
and Sale Agreement (the PSA) with VOG Palo Verde LP, a
Delaware limited partnership and subsidiary of Venado Oil and
Gas, LLC (the Buyer). The PSA has an economic effective
date of January1, 2017 (the Effective Time). to the terms
of the PSA, the Buyer will purchase from the Sellers certain
producing and non-producing oil, gas and mineral leases and wells
located in Dimmit, Frio, La Salle and Zavala Counties and surface
acreage located in Zavala County (collectively, the
Properties). The purchase of the Properties, provided that
all conditions to closing have been met, is expected to close on
June1, 2017 (the Closing).
Purchase Price; Adjustments to Purchase Price; Deposit.
The purchase price of the Properties is $300 million, subject to
customary adjustments (a)that are intended to provide the Buyer
with the economic benefits and costs associated with the
ownership of the Properties during the period from the Effective
Time to the Closing and (b)to the extent that assets are excluded
from the transaction or adjustments are made to the applicable
allocated values, in each case, based upon title defects,
environmental defects, casualty losses or failure to obtain
waivers of certain consents or preferential purchase rights.
Concurrently with the execution of the PSA, the Buyer made a
deposit of 10% of the purchase price (the Deposit) with a
third party escrow agent.
Representations and Warranties; Covenants. The PSA
contains customary representations and warranties and covenants
by the Sellers and the Buyer.
Indemnities. The PSA contains customary indemnities by
the Sellers and the Buyer, which in the case of the indemnities
by Sellers are subject to customary thresholds, deductibles and
other limitations. At the Closing, $10 million of the Deposit
will be retained in escrow to secure Sellers indemnity
obligations during the 12 month period following the Closing.
Title and Environmental Matters. With limited
exceptions, the Buyers exclusive remedy for title and
environmental matters is through a customary title and
environmental defect mechanism, which includes customary
thresholds and deductibles. The Buyer will have until May19,
2017, to conduct its diligence of title and environmental matters
relating to the Properties. Sellers will have a 90 day period
following the Closing to cure any title defects. If the Sellers
exercise their rights to cure a title defect, then at Closing the
Buyer will not pay the value allocated to the affected assets to
the Sellers and the Sellers will not deliver an assignment of the
affected assets to Buyer, but instead, such amount and assignment
will be delivered into escrow with a third party escrow agent and
will be released to the Sellers or the Buyer, as applicable, as
the title defect is finally determined and/or cured. If the
parties dispute an environmental defect or a title defect (and,
in the case of a title defect, the Sellers do not exercise their
rights to cure), then at Closing the Buyer will deliver such
disputed amounts into escrow with a third party escrow agent to
be released to the Sellers or the Buyer, as applicable, as the
environmental defect or title defect is finally determined.
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Conditions to the Closing. The PSA contains customary
conditions that must be satisfied before the Sellers and the
Buyer have the obligation to effect the Closing (the
Conditions), including: (a)the accuracy of the Sellers and
the Buyers respective representations and warranties;
(b)compliance by the Sellers and the Buyer with their respective
covenants; (c)the absence of certain suits or actions; and (d)the
Sellers and the Buyers ability to provide closing deliverables.
Termination of Agreement. The PSA can be terminated upon
the occurrence of certain events, including if the Closing has
not occurred on or prior to August1, 2017. If all of the Buyers
Conditions have been met and the Buyer elects not to close, then
the Sellers may terminate the PSA and retain the Deposit as
liquidated damages. If all of the Sellers Conditions have been
met and the Sellers elect not to close, then the Buyer may elect
to either receive the Deposit and seek damages against the
Sellers or seek the specific performance of the Sellers.
Forward Looking Statements
This Form 8-K may contain forward-looking statements relating to
future financial results, business expectations and business
transactions. Business plans may change as circumstances warrant.
In addition, the conditions to closing the transactions
contemplated by the PSA may not be met or the anticipated
benefits from the proposed transaction may not be fully realized.
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: estimates of reserves, commodity
price changes, 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. EXCO undertakes no obligation to publicly
update or revise any forward-looking statements.
Item7.01 RegulationFD Disclosure.
On April10, 2017, EXCO issued a press release, a copy of which is
furnished as Exhibit99.1, announcing the signing of the PSA.
In accordance with General Instruction B.2 of Form 8-K, the
information furnished to Item7.01 (including the information in
Exhibit 99.1) shall not be deemed to be filed for purposes of
Section18 of the Securities Exchange Act of 1934, as amended (the
Exchange Act), or otherwise subject to the liabilities of
that section, nor shall such information be deemed incorporated
by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as shall be expressly set
forth by specific reference in such a filing.
Item9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number |
Description |
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| 99.1 | Press Release, dated April10, 2017 |
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About EXCO RESOURCES, INC. (NYSE:XCO)
EXCO Resources, Inc. (EXCO) is an oil and natural gas company. The Company is engaged in the exploration, exploitation, acquisition, development and production of onshore United States oil and natural gas properties with a focus on shale resource plays. The Company’s principal operations are conducted in certain United States oil and natural gas areas, including Texas, Louisiana and the Appalachia region. The Company holds acreage positions in approximately three shale plays in the United States, including East Texas and North Louisiana, South Texas and Appalachia. In East Texas and North Louisiana, the Company holds approximately 83,800 net acres in the Haynesville and Bossier shales. In South Texas, it holds approximately 65,800 net acres in the Eagle Ford shale. In Appalachia, the Company holds approximately 137,400 net acres prospective in the Marcellus shale. EXCO RESOURCES, INC. (NYSE:XCO) Recent Trading Information
EXCO RESOURCES, INC. (NYSE:XCO) closed its last trading session down -0.013 at 0.537 with 764,630 shares trading hands.