Bloomberg News

Exco Resources Falls as Pipeline Sale Deadline Expires

April 09, 2012

Exco Resources Inc. (XCO:US), the Dallas- based natural-gas producer that rejected a buyout offer last year, fell to its lowest price in more than three years as fuel prices dropped and a negotiating period expired without a sale agreement for one of its pipelines.

Exco declined (XCO:US) 1.4 percent to $6.23 at the close in New York, the lowest since December 2008. Gas prices on the New York Mercantile Exchange rebounded from a 10-year low today, settling at $2.107 per million British thermal units.

Exco said Feb. 3 it was in a 45-day period of exclusive talks with an unidentified private infrastructure fund to sell a third of TGGT Holdings LLC, a pipeline partnership it owns with BG Group Plc. (BG/) Exco estimated the sale price at more than $400 million and will use the proceeds to pay down debt.

“That period expired a while back and they haven’t announced anything,” Michael Hall, an analyst with Robert W. Baird & Co. in Denver, said in an interview today. A delay in the sale may complicate Exco’s ability to finance capital spending this year, said Hall, who rates Exco neutral and doesn’t own the stock.

Exco, which lost $166.7 million, or 78 cents a share, in the fourth quarter, said Feb. 23 it will “significantly reduce” drilling this year because of gas prices. About 97 percent of the company’s reserves are gas.

To contact the reporter on this story: Mike Lee in Dallas at mlee326@bloomberg.net

To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net


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Companies Mentioned

  • XCO
    (EXCO Resources Inc)
    • $4.93 USD
    • -0.06
    • -1.22%
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