Harbinger, Exco form oil and gas joint venture
NEW YORK (AP) — Holding company Harbinger Group Inc. and oil and gas company Exco Resources Inc. said Monday that they are creating a private oil and gas joint venture that will buy and operate Exco properties in Texas and Louisiana.
Exco is receiving $597.5 million for its assets and will have a 25.5 percent stake in the partnership. Harbinger is paying $372.5 million in cash and gets a 74.5 percent stake. The rest of Exco's payment comes from a $225 million loan.
The deal encompasses areas with about 520 billion cubic feet equivalent of estimated proved reserves, 84 percent of which are natural gas.
Harbinger said it will gain an oil and gas business with strong cash flows, and it expects to benefit as natural gas prices rebound.
Natural gas prices fell to 10-year lows earlier this year, before climbing again in the past few months.
The deal has been approved by the boards of both companies, and is expected to close in early 2013.
In afternoon trading, Harbinger shares rose 34 cents, or 4 percent, to $8.82, while Exco shares rose 18 cents, or 2.2 percent, to $8.46.